In case you need a little refresher, retail media networks are advertising platforms established by retailers on their own digital platforms—it’s sort of like in-store advertising, but in digital format. This creates a new revenue stream for retailers, as RMNs enable them to monetize their first-party data through the launch of ad products. Essentially, it’s all about the data, as ad monetization with RMN allows retailers to gather new information on the behavior and interests of their customers, enhance their first-party data strategy, and engage with new audiences by meeting their specific needs. Ever since third-party cookies have started crumbling, RMNs have emerged as the sweet treat that both retailers and advertisers need—and the demand for this solution is rising at an incredibly fast pace. 

The tried and tested RMN trend will continue to accelerate in the new year. Here are four developments that retailers, advertisers and digital marketing services partners alike need to prepare for.

RMNs go global. In short, every retailer around the globe is going to have a retail media network, if they don’t already—it’s simply becoming pure table stakes. What started in North America, with Amazon leading the charge, has been rubbing off on businesses in every other part of the world. I can guarantee that only a year or two from now, even small-scale regional retailers will have an RMN, whether that’s in Italy, Thailand or Argentina. Why? Because once the flame of a business trend has been ignited and fueled by a new, but proven economic paradigm, the fire simply has to spread. That said, it is important to note that all of this may seem like a scenario with no downsides, but there is a potential one: if RMNs are not executed well, retailers and advertisers run the risk of diminished customer experience. For this reason, many brands choose to team up with a partner that’s specialized in this technology. 

Put creative differentiation at the core. Up until very recently, the game of retail media completely revolved around data and mathematics, with people and technology coming in to better execute what is essentially a quantitative effort. As such, RMNs allowed very little space for creativity. Now, however, we are seeing retailers such as Amazon move up the funnel and into the world where creativity truly matters: branding. When it comes to building brand awareness and bringing in new customers, data definitely counts—but it’s the creative that can make a real difference. So, while you still need the smartest people and the savviest technology to handle quantitative details, retail media is more and more a game of bringing in the right creative. Considering there’s so much more opportunity for creative differentiation, the brands that are best able to bridge data with creativity are the ones that will succeed. 

Tailor unified real-time strategies. So far, most brands (and even some of their partners) have been deploying retail media networks per channel, which means that an advertiser’s budget and approach for Amazon may differ from its budget and approach for Walmart. In other words, they have been working in silos and optimizing within the lengths of each different platform. However, this is all about to change. In the near future, I believe brands will view retail media networks as interconnected advertising channels instead of a handful of unrelated platforms. With that, it will become more and more feasible for brands to build a single retail media strategy, which allows them to be more flexible and seamlessly move between different channels. In the same vein, they will start to use unified real-time optimization tactics to capitalize on arbitrage opportunities between various retail media networks. This essentially means that brands will take more of an active daytrading type of approach. While some parts of this process can be automated, many others will still require manual efforts and human intervention in the form of more centralized retail media teams—both at the side of advertisers and their partners. 

Deliver dynamic in-real-life placements. As retail media networks—which are currently completely digital—expand, retailers will start to move ads from their online platforms to their offline spaces. For example, Amazon has announced that it will install more digital signage in its Whole Foods stores across the US and connect their DSP to their in-store screens. This will enable the retailer to use first-party data to dynamically serve ads in a previously analog framework and programmatically target consumers, thereby transforming the century-old concept of paid POS into an extension of digital advertising. 

In short, dynamic IRL placements can help retailers and advertisers enhance their targeting. However, one issue with this approach is that it’s still based on backward-looking data. Simply put, ad placements are currently based on average demographic numbers. This means that a retailer doesn’t actually know who is in its store in real time. However, with Amazon’s Just Walk Out technology, where cameras and sensors follow customers throughout their entire in-store journey, retailers and advertisers will be able to gather aggregated data of everyone who’s in a particular store in real time. This technology may already be in use in Amazon Go stores, but I believe it will take a few more years before it can scale, especially considering its significant privacy concerns—so I’ll save this prediction for another time.

Teamwork to make the RMN dream work. 

Over the last year, retail media networks have blown up and blown our minds. The impact of this technology is far-reaching and will only continue to expand in the coming years. Now, it’s up to retailers and advertisers to dive in and start monetizing their first-party data. As for my final piece of advice, make sure to team up with an experienced partner that can help you along the way—this will benefit every party involved. 

Curious to learn more about retail media networks? Get in touch with our team via sales-ecommerce@mediamonks.com.

Typically, brands whose websites aim to provide content rather than serve as an ecommerce platform are well versed in the benefits of ad monetization. After all, it can be the main—if not the only—source of income. But for retail companies whose main business relies on selling their products and services, ad monetization can be relegated to the background.

The truth is that with the right strategy in place, this monetization strategy can bring millions of dollars a year for big retailers. And yet, perceiving it as only a source of additional income is missing out on the other opportunities it presents to brands. Ad monetization can lead to new insights into your customers’ behavior and interests, elevate your first-party data strategy and even engage audiences by giving relevant recommendations that suit their needs. Here are some aspects to factor in as you delineate the optimal strategy. 

First-Party Data Reigns Supreme

The concept of ad monetization is closely tied to automation. When it comes to filling placements—whether in-app or on websites—most brands depend on third-party solutions like demand-side platforms (DSPs) or advertising SDKs. It’s easy to understand why: with little effort from the publisher, they manage everything from real-time bids to supply quality and viewability. The inventory is diverse, and it saves the brand from having to reach individual agreements with different vendors.  

For those reasons, DSPs can be quite profitable. But with increased awareness of the importance of data privacy and the imminent death of the cookie, the benefits of a strategy that relies on one’s first-party data come into sharper focus.

In opting for first-party ad monetizing solutions, brands may find that not only do they provide better results for advertisers but that in return, monetization also helps them learn more about their audience. “Visitors have the option to share with us what they do inside our website—including the ads they clicked on and the ones they chose to ignore,” explains Daniel Diniz, VP of Business Development. “Packed with the right data management platform, brands can draw valuable insights into what they can do to improve each customer’s experience.”

It’s a Win-Win Solution for Publishers and Advertisers

Retailers know—and care for—their consumers better than any external DSP ever will. They are more likely to know what products genuinely interest them, and how to present them without disrupting the experience. For advertisers, this means that establishing direct relationships with them equals higher click and conversion rates. “Applying our insights into what our consumers would be interested in seeing can yield better results for the brands we offer advertising space to,” says Diniz. “While we won’t be sharing the data our consumers trusted us with, they will witness an improvement in performance.”

In that process, it’s only natural for certain advertisers to get better results than others—something that publishers should identify as a source of knowledge. “If the brand you’re promoting is not seeing great results, it may be time to direct your audience to others,” says Diniz. Far from indicating that one’s placement is not valuable, or that ad monetization is not the way to go, a lack of performance simply means your consumers are not that interested in that particular advertiser.

Winning the Fight Against Ad Fatigue

On occasion, retailers worry that monetizing their website will only add to the existing ad fatigue. While this is a real issue, it’s oftentimes caused by the unregulated use of automated tools, as opposed to a personalized, data-driven strategy. As Teixeira explains, “Consumers are in constant pursuit of new recommendations and solutions to their existing needs. When done right, ads don’t have to be a nuisance—quite the opposite. They complement the experience.”

If a consumer is browsing through an ecommerce website, chances are they are already in shopping mode, meaning they are more open to ads—as long as they don’t seem forced. It all boils down to how we’re presenting them. “Showing visitors an ad they’ve seen a million times or a product they bought two days ago will surely leave a negative impression,” adds Teixeira. “Which only reinforces the importance of an ad monetization strategy that’s built on data-driven decision-making. That way, both the publisher and the advertiser can rest assured that the consumer is seeing a reasonable number of ads that match their interests.”

While there are no magic solutions when it comes to ad monetization, one thing is certain: having a dedicated team capable of creating data processing models and acting upon their findings will benefit all parties. There’s a lot to be gained from monetizing one’s website, as long as we’re factoring in the consumers’ preferences as well as the brand’s. “There’s no one-size-fits-all approach,” concludes Diniz. “Many opt for a dual model in which they save the premium placements for the advertisers they’ve established direct relationships with and manage the rest through a DSP, and that’s perfectly fine. It all depends on their ultimate goal.”