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Digital Identity Crisis Will Be a Boon for Retail Media Sellers

One of the unique qualities of retail media advertising is the ability to use closed-loop attribution, tying ad engagements to sales. This is possible because the same company is running the ad and selling the product advertised. Brands often look to Amazon and because those sites facilitate closed-loop attribution—and with the ongoing disruptions to digital identity, this tool will likely provide even greater advantages to those who use it.

At the beginning of this year, Google announced it would begin phasing out third-party cookies in Chrome's browser. And over the summer, Apple announced it would also create difficulties for marketers by making the Identifier for Advertisers (IDFA) opt-in. These changes will hamper advertisers' insights into who was exposed to or interacted with ads, as well as their ability to connect data to that of other channels.

Along with "business recovery from COVID-19," measurement/attribution was a top concern for data professionals’ this year, according to May 2020 research from Winterberry Group and the Interactive Advertising Bureau (IAB).

As advertisers struggle to connect the identities of users across channels and match marketing touchpoints up with conversions, ecommerce marketplaces like Amazon, Walmart, and Instacart will be able to make these connections directly within their own platforms. Some players, including Walmart, are hoping to tie in-store sales into the picture as well, and they have the first-party data across digital and traditional channels to do it.

Additionally, these advertising platforms have the ability to target those consumers who are likely to be in-market, thanks to their wealth of browsing and purchase data. As brands increasingly find it hard to obtain actionable signals of consumer intent and activity across channels, it's likely that these ecommerce ad offerings will become more appealing.

eMarketer PRO subscribers can look out for our new estimates of ad spending in the ecommerce channel, which are set to publish in a few weeks.