If the “Retail Media 1.0” era was primarily about search-driven ecommerce, then Retail Media 2.0 (with credit to Peter Moustakerski) will be about moving up the funnel and across retail channels. Here’s a look at the evolution of Retail Media 2.0.
Retail Media 1.0 has seen unprecedented expansion.
Sponsored product ads have risen rapidly, first on Amazon and then across the landscape, as dozens of emerging retail media networks (RMNs) sought to monetize their ecommerce traffic.
And retail media search is far from done. It still has plenty of runway as the dozens of newer RMN entrants evolve their offerings. But the dawn of a new era is emerging.
Brands are quickly transitioning into the Retail Media 2.0 era.
As RMNs get serious about using first-party data for targeting display, video, and streaming TV ads—often by partnering with third-party publishers and media companies—brand dollars are migrating into these formats. That means retail media will become as much about branding as it is about performance advertising.
Retail media off-site digital ad revenues are hitting an inflection point.
This slice accounted for 12.7% of the US retail media market last year, and it’s gaining momentum.
Retail Media 2.0 will require brands to consider these upper-funnel formats within the context of national media budgets that currently go to places like linear TV, Facebook, and YouTube. Retail media is already starting to give linear TV a run for its money and will likely surpass that ad market in the next few years.
Brands need omnichannel sales data for a complete picture of return on ad spend (ROAS).
As retail media ads move into display, video, and streaming TV, brands will be ready to take advantage of closed-loop measurement that links ad exposure to sales.
RMNs must bring their offline sales data into the equation if they want to encourage more brand investment.
The Retail Media 2.0 era—and its evolution across formats and channels—is already underway. Which brands are ready to take advantage?
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.
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