In a competitive landscape, retailers are looking beyond their core business for profits—and digital advertising offers a potential path to growth. Following in the footsteps of Amazon’s fast-growing ad business, retailers like Walmart, Target, eBay and Kroger are getting into the game by monetizing online traffic and exploring ways to use their first-party data for targeted offsite advertising.
Why are retailers looking to develop digital ad businesses?
In the age of price transparency, many retailers are finding topline growth and margins harder to come by. Building out advertising as a secondary revenue stream promises incremental growth coupled with an attractive margin profile that can improve retailers’ financial prospects.
What are the most critical assets needed to develop a viable retail media business?
Companies best positioned to monetize their customer base through advertising will have both quantity and quality of first-party customer data, heavy online traffic volume, an advertising tech stack and an organizational commitment to the business.
What are the advantages and disadvantages of retail media compared with other forms of digital advertising?
Retail businesses hold a theoretical advantage over the Facebooks and Googles of the world because of their first-party customer purchase data. However, by coming late to digital advertising, most retailers currently lack the expertise and technology infrastructure to stand up their own retail media networks.
What are the leading digital advertising formats for retail media?
Sponsored product advertising is currently the most prevalent because it’s high-value for advertisers and easier to monetize for retailers. Brand-building display and video ad formats are now gaining prominence.
Where are online retail media budgets coming from?
Currently, most budgets moving into online retail media come from existing digital ad budgets, but more marketers are considering whether to use funds from shopper marketing budgets.
WHAT’S IN THIS REPORT? This report includes analysis of the emerging space of digital retail media and key players in the market.
KEY STAT: Of US media buyers advertising on ecommerce sites, 90% do so on Amazon, far outpacing second-tier players Walmart, eBay, Target and Kroger.
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