Imagine transforming every digital space — whether a webpage, an app, or within a store — into a powerful advertising platform. Retail Media Networks (RMNs) make this dream a reality, turning multiple opportunities into potential ad space. Their growth is reshaping the advertising industry. According to eMarketer, Retail media will have a compound annual growth rate of 24.1% between 2024 and 2028 and will account for almost a quarter of all US media ad spending in 2028.
Retailers are ramping up their investment in RMNs to enhance their advertising through data-driven strategies. You’ll see a lot of this during events like Black Friday and Cyber Monday, when consumer interest spikes. Brands leverage retailer first-party data within RMNs to precisely time ad placements to coincide with peak consumer search activity. They want shoppers to see their holiday ads when they are most engaged.
Let’s examine how the strategic use of RMNs is setting new standards for digital marketing success.
The Concept of Retail Media Networks
A retail media network allows brands to place ads directly within a retailer’s digital properties. They enhance brand promotion across digital and physical realms by leveraging AI-driven recommendation engines and real-time data analytics. These technologies tailor product ads to consumer behaviors and interests, seamlessly integrating them into the digital shopping experience using detailed first-party data from the retailer.
Unlike traditional social media advertising, which often relies on broader demographic targeting, RMNs use precise, behavior-based data to customize advertising, making every interaction potentially more relevant and effective.
Amazon Advertising may best exemplify this approach. They use first-party data to offer personalized recommendations based on users’ previous Amazon purchases. This personalization enhances the shopping experience for users and effectively meets advertisers’ need for meaningful engagement and increased sales.
Additionally, RMNs improve advertising efficiency. At Kroger, the marketing department found that first party retail data requires 51% fewer ad impressions than third-party data to achieve the same sales. RMNs are a prime vehicle for first party data, making them highly cost-effective. As a result, marketers see RMNs as an effective way to optimize their advertising budgets and improve returns.
Importance of Retail Media Networks
Retailers are using RMNs to turn every online, and several in-store, interactions into an opportunity to engage customers at their peak interest — and they’re meeting with some success. RMNs are rapidly gaining traction, with 64% of executives at US retailers planning to implement a retail media network by the end of 2024.
Consider this: a shopper browses an online store for a new blender. As they search, ads for related products, like smoothie recipe books or special offers on fruit, appear. This isn’t coincidence — it’s smart ad placement, transforming passive browsing into active buying.
The advertising strategy here equates to placing products on the “digital shelf.” In the digital world, visibility equals viability. By ensuring that products appear right where potential buyers are most likely to look, brands improve their chances of conversion. It’s a strategic way for brands to maximize their impact at the exact moment a consumer is ready to buy.
How Retail Media Networks Operate
Retail media networks are transforming how brands connect with consumers. They integrate ads across both digital and physical platforms, expanding reach and enhancing consumer engagement effectively. They accomplish these outcomes by:
- Integrating ads across digital platforms: Ads are not confined to a single site or app; instead, they’re part of an extensive ecosystem that includes various media channels. This wide distribution maximizes visibility and engagement.
- Symbiotic relationships in retail media: The relationship between retailers and brands is mutually beneficial. Retailers provide brands with valuable advertising spaces where shoppers are most engaged, and also provide brands with first-party data to expand reach without relying on third-party data sources. This data provides deep insights into consumer behaviors and preferences, helping brands fine-tune their marketing strategies and ad placements.
Ultimately, retail media networks increase the visibility ads and also aligns them with content that matches consumer interests. This precise use of data sharpens the focus on the target audience. Now, let’s delve deeper into how these strategies translate into tangible benefits for all stakeholders involved.
Benefits of Retail Media Networks
Retail media networks are transforming how we shop and see ads. They’re leveraging what they know about us — the first-party data — to make sure the ads we see are actually interesting and relevant. Instead of sending random ads our way, they’re attempting to smoothly integrate into our shopping experiences. This approach is a more integrated, experience-driven model. Here’s a look at the key advantages for retailers, brands, and consumers:
- Increased revenue for retailers: By monetizing their physical and digital properties through ads, retailers open up new revenue streams.
- Enhanced brand visibility: Brands gain prominent placement with the help of retailer’s first-party data, significantly increasing their brand exposure.
- Deeper consumer engagement: Ads tailored to consumer behaviors and preferences lead to more meaningful interactions, enhancing the shopping experience.
- Strategic data utilization: First-party data allows for hyper-targeted advertising, making promotions more relevant and effective.
- Better insights for all parties: Both retailers and brands benefit from improved insights into consumer habits, which can guide future strategies and product offerings.
Given these many advantages, it’s easy to see why retail media advertising is creating a more dynamic and interconnected retail ecosystem.
Retail Media Networks Case Studies
Leading retailers like Home Depot and Walmart are deploying advanced Retail Media Networks to enhance the shopping experience and create tangible business results. Let’s explore how these networks are redefining customer interactions and setting new standards in retail advertising.
Home Depot RMN Excels at Ad Spend Return
Home Depot recently launched Orange Apron Media, a Retail Media Network designed to enhance the customer experience through strategically integrated advertising. By enabling suppliers to feature relevant ads for endemic products during the customer’s research and decision-making phases, the network streamlines the purchasing process. The key is personalized, timely information.
Scotts Miracle-Gro exemplifies this strategy in action. Scotts leveraged Orange Apron Media to broadcast their commercials in high-visibility slots during the peak lawn care season. By tapping into Home Depot’s expanded store media offerings, including connected TV (CTV) and streaming platforms, Scotts boosted its brand visibility and garnered valuable insights from Home Depot’s first-party data and retailer-specific analytics. Scotts’ strategic use of this RMN allowed them to deepen consumer insights and optimize marketing spend.
Targeted advertising, which leverages retailer’s first-party data for maximum relevance, has proven highly effective. According to Home Depot, the success of Orange Apron Media has more than doubled the return on advertising spend for brands, generated one-and-a-half times the amount of incremental traffic, and boosted conversion rates by 26%.
Walmart’s RMN Integrates Data-Driven Advertising
Walmart Connect, Walmart’s enhanced Retail Media Network, aims to deepen the connection between customers and brands. Using Walmart’s comprehensive first-party shopper data, the network makes sure the retail media ads you see are timely and tailored to match your specific shopping preferences and behaviors. With shopper data, this focused approach ramps up customer engagement, improves conversion rates, and boosts brand promotions.
A notable example of this strategy in action is Clorox’s 2023 Back to School campaign. By integrating both upper-funnel and lower-funnel advertising tactics, Clorox aimed to enhance incrementality throughout the customer journey. Results showed that combining these ad levels effectively doubled the incremental sales compared to marketing campaigns that targeted only lower-funnel ads. With this strategy, Walmart’s RMN optimized Clorox’s advertising spend.
Walmart Connect also leverages advanced store attribution metrics to determine how online product ads influence in-store shopping actions. Armed with data, advertisers can now get a clear view of the omnichannel impact of their efforts. With new metrics now in beta testing — like in-store attributed sales, units sold, and orders — Walmart Connect is on track to revolutionize how advertisers optimize their retail media ad spend. This approach will seamlessly bridge online campaigns with tangible real-world outcomes.
Walmart Connect’s seamless integration of advertisements across online and in-store touch points creates rewarding connections for its customers, brands, and Walmart itself. This integration ties everything together, giving customers a smooth and effective shopping experience. The effectiveness of this strategy is clearly reflected in the numbers; in 2023, Walmart Connect generated approximately $3.4 billion in ad revenue.
Both Home Depot and Walmart demonstrate the transformative power of Retail Media Networks in boosting customer engagement and increasing sales. Their success with these networks is setting new industry standards for retail innovation for both brands and retailers.
Postie’s Impact on Retail Media Networks
The retail media market continues to experience rapid growth, sparking fresh ideas about how advertising options, such as direct mail, might be reintegrated into digital strategies on various ad platforms. Postie is set to play a pivotal role in this ad tech evolution. With most brands focusing heavily on digital advertising, Postie offers an innovative blend with direct mail that could enrich the retail media experience. Their unique approach brings a tangible touch to the predominantly digital realm.
One of the biggest challenges facing online retailers today is standing out amidst the overwhelming noise of digital ads. Here’s where Postie steps in, adding a new layer to the retail media ad spending strategy. By incorporating direct mail into the retail media mix, brands can engage customers through more personalized ads, keeping their message from becoming just another digital skip. This strategic integration could significantly influence how retail media networks operate, making direct mail a compelling component of the retail media landscape.
Unlock the full potential of your marketing strategy with Postie’s cutting-edge technology. Our solutions ensure every campaign is targeted, trackable, and scalable, driving remarkable growth for your brand. Start your journey with Postie today and discover how our expertise in Retail Media Networks can elevate your marketing to new heights.
