Despite the many delays to Google’s deprecation of third-party cookies, there is no denying that a cookie-less future is on the horizon. With this shift in the digital marketing sphere, advertisers look to adapt their targeting strategies and adopt new methods for gathering data. This is where retail media networks could become vital to the future advertising landscape.
Retail media is by no means a new proposition. Traditional point-of-sale advertising in physical stores has long played a part in brands’ marketing strategies, from trolley panels to in-store radio to shelf talkers. However, like much of modern advertising, it has been transformed by advances in digital technology, now offering advertisers the ability to reach consumers across a retailer’s online e-commerce property. With Amazon having launched the first online retail media network in 2012, it has since skyrocketed, reaching a reported $31.2 billion in revenue last year. A host of other big retailers have since followed in Amazon’s footsteps: Sainsburys, Tesco, ASDA, Ocado and Boots, with Morrisons and Deliveroo being some of the latest brands to announce the launch of their retail media propositions.
Online retail media, which comes in various forms from search ads to standard display to sponsored products, has benefits for consumers, retailers and advertisers alike. For retailers, it offers a new and (if Amazon’s success is anything to go by) lucrative revenue stream, particularly for supermarket brands, where profit margins tend to be low. For consumers, it can make for an enhanced shopping experience in the form of highly relevant, personalised ads that feel native to the retailer website. And for advertisers, not only does it give access to valuable first-party purchase data making for smarter targeting opportunities, but it enables them to effectively reach consumers at the bottom of the funnel, when conversion is just a few clicks away. It also allows for the direct attribution of sales to advertising spend, which is crucial at a time when marketing budgets and advertising effectiveness are increasingly scrutinised.
According to McKinsey, retail media networks are growing by more than 10% YOY in the UK and this expansion is only expected to continue. So, with the phasing out of third-party cookies, combined with the current UK recession which will likely mean that brands will need to be savvier with their advertising spend, now is certainly the time to test and learn new retail media strategies and ground marketing plans in robust first-party data, to help future-proof and optimise digital advertising spend.