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Retail Media Networks take Advertising to the Next Level

By May 12, 2023May 24th, 2023No Comments

More and more, retailers are tapping into the high-growth, high-margin business of retail media. Due to this shift, not only are they disrupting the digital advertising industry, but simultaneously transforming the retail landscape.

But what exactly are retail media networks? Traditionally, the term “retail media” referred to in-store advertising placements within brick and mortar retail locations. Today, a retail media platform is a component of a retailer’s website that allows brand marketers and advertisers to buy ad space within that retailer’s digital properties, including their website, app, and in-store digital screens. A retail media network is essentially an advertising business that a retailer sets up in order to allow advertisers to buy advertising space across platforms while using consumer data to connect with the buyer throughout their journey.

According to McKinsey & Company, retail media networks are set to create the biggest paradigm shift in digital advertising since the move to programmatic advertising and the use of automated technology for media buying. In the US alone, the growth of retail media networks could represent as much as $100billion of ad spend in 2026. These networks truly are the next big revenue stream. As online shopping has grown in popularity with consumers, retail media has become more popular with brands. The term retail media refers to the actual advertising placed on a retailer’s media network. Third-party businesses that look to reach relevant audiences will work with a retailer to create ad campaigns for those digital channels.

The role of retail media platforms is to create a streamlined way for advertisers to purchase and serve advertisements to consumers near points of purchase and decision making – such as digital product listings, search result pages, and checkout confirmations. The use of Danavation’s Digital Smart Labels™  as digital signage would be extremely beneficial in this market, and could be used to allow brands to display their ads and logos directly on the shelf – where customers are shopping. In addition to branding opportunities, Digital Smart Labels™ are ideal to expand the retail media network and could allow vendors to buy retail media advertising opportunities and promote their brand, promotions, offers, and vendor partnerships.

So far, large companies have led the way in retail media, creating urgency for companies of all sizes to seize and maximize this opportunity. Some larger companies who have successfully implemented and led this digital advertising switch include, Amazon, Walmart, Walgreens, and Home Depot to name a few. The expansion of retail media goes far beyond brick and mortar, and right into your home.

Forbes highlights that physical retail stores and websites are becoming increasingly crucial as advertising sources for their vendors. Selling marketing space to vendors is a growing revenue stream for retailers and allows them to deepen their relationships with business partners. Ad space sales on websites, in-store displays, mobile applications, and streaming services will continue to grow across more retailers. The most significant growth, however, will come from streaming TV.

“Retail Media is moving aggressively to streaming TV, capturing the attention and budgets of major brands,” stated Andrew Lipsman, Principal Analyst of Insider Intelligence. The three largest U.S. retailers are leaders in optimizing retail media networks. Amazon took advantage earlier on by using its newly acquired Thursday Night Football streaming events to sell advertising space to its vendors and to maximize its marketing efforts. Kroger’s partnership with Roku to sell commercials on the ad-supported CTV becomes even more powerful if the potential merger with Albertsons goes through. Walmart has been working with its vendors on retail media networks for many years and has created its own branded network called Walmart Connect, which made over $2 billion in 2021 revenue. Advertising revenues, excluding website placements, will grow 38% in 2023 to $6.5 billion. “This is the holy grail for advertisers,” said Lipsman.