By Nicole Kivel, Managing Director, Northern Europe, Criteo
Despite its growth in the digital advertising market, there are still significant barriers to retail media success that often go unnoticed. Much like publishing, building a media business requires a unique audience of a certain scale to satisfy advertiser demands. However real success in the current retail media landscape demands more than just the basics; it requires the right mindset and strategy.
Brands and agencies have recently been focusing more on performance, especially in retail media, where commerce outcomes are easily demonstrable. While it’s encouraging to see increasing budgets in this area, an overemphasis on Return on Ad Spend (ROAS) can lead to incorrect evaluations of campaign results. Key Performance Indicators (KPIs) for success may lie beyond ROAS, focusing more on consideration, new-to-brand, and market share shifts. Retailers need to understand how to report these metrics to access broader funnel budgets and tap into non-ROAS campaigns.
For revenue growth, retailers must be open to as much demand as possible. Many aim to expand by selling media to non-endemic brands, those not directly related to their products. For example, ASOS could host ads from TripAdvisor or Marriott to target young, regularly traveling professionals. Non-endemic advertising presents a significant opportunity for retailers, but attracting these brands requires compelling audience insights and results.
Offline data is becoming increasingly important to data enrichment in many retail sectors, especially grocery. Brands only get half the picture until retailers merge offline and online data. Moreover, when we look at things like the loyalty schemes, grocers have fantastic data sets that hold relevance beyond just on-site monetization. Many retailers are sitting on data that is incredibly compelling to brands in adjacent categories and verticals who want to reach a very specific shopper.
This brings us to an important point, the reach of on-site media is limited by the size of the retailer’s properties. Non-endemic brands want to leverage retailer audiences elsewhere. Offsite retail media enables them to take these insights and apply them to other media channels such as the open web, digital TV, social media and Out-of-Home. Major players like ITV, Channel4, Tesco, and Sainsbury’s have already shown interest in this area through partnerships.
The biggest mistake is to oversimplify this commerce media opportunity. It isn’t just a matter of turning on sponsored products; the right psychological and technological changes must be made for successful scaling. Providing advanced campaign management tools, thinking full-funnel (both offline and online), and properly considering non-endemic brands can all help retailers expand their retail media footprint, reach, and revenue.
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About Criteo
Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects thousands of marketers and media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice.
Web www.criteo.com
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