Reported by IAB Canada contributor Paolo Lacuna
According to the 2022 IAB Canada Internet Ad Revenue Survey, Retail Media experienced remarkable growth, increasing 26% to reach an impressive $982 million in 2022. This surge firmly establishes Retail Media as one of the fastest-growing segments in digital marketing in Canada. Its impact on search, display, and video advertising revenues has also been significant and is poised for further expansion as Retail Media Networks (RMN) continue to grow in both supply and innovation.
While Retail Media is hailed as the emerging “new frontier” of digital advertising, positioned as the third wave following the successes of search and social, it is not without its share of challenges. In this dynamic landscape, RMNs must increase their efforts and ride this wave of growth to their advantage.
Capitalize on First-Party Data
Retail Media presents a real solution to the deprecation of the cookie. Retailers possess a wealth of first-party data that offers brands a real opportunity to target the right audience. However, a retailer’s first-party data can be fragmented in quantity and quality. RMNs face the critical task of not only effectively ingesting this data but also activating it for their advertisers.
Diversified Inventory with In-Store Placements
RMNs must recognize that the customer’s path to purchase is multifaceted and ever-changing. Therefore, they must ensure that they provide brands with the opportunity to secure placements across a wide array of storefronts. This encompasses in-store placements where partnerships with Digital Out of Home (DOOH) providers are key.
DOOH enables brands to engage customers at the moment of purchase while in-store, influencing their decisions while actively shopping. This is invaluable for both endemic and non-endemic advertisers.
In this pursuit, RMNs must establish strong partnerships with DOOH vendors to enhance the diversity of inventory available to brands and facilitate an easier path to purchase.
According to a study by eMarketer, RMNs are urged to think and act like digital publishers and must adopt the same standards in digital advertising practices. This includes standardizing ad formats and measurement approaches, as recommended by the IAB.
This call for standardization resonates as a best practice and a solution to a prevalent challenge. A survey of U.S. marketers revealed that the biggest hurdle they face in Retail Marketing is the lack of standardization across platforms. This inhibits marketers` ability to swiftly launch and manage campaigns as they are forced to create several ad formats tailored to the specific requirements of different retailers. This also makes evaluating campaign success problematic when retailers do not adhere to the industry-accepted practices and measurement methods, particularly in viewability and attribution. Brands need to be able to consistently measure the performance of their digital campaigns across categories, and consequently, RMNs and Retailers must meet this requirement.
In response to the challenges, some RMNs are taking proactive steps. For example, The Trade Desk has identified Retail Media as their fastest-growing business segment, and they are actively enhancing their capabilities to harness first-party data from retailers. The Trade Desk partnered with Walmart Connect to evaluate their UID2 post-cookie identity solution within their Demand-Side Platform (DSP) as part of their strategic initiatives. Jeff Clark, Vice President of Product at Walmart Connect, emphasized their commitment to privacy compliance and the protection of customer privacy rights. Their ongoing efforts involve developing privacy-safe identity solutions powered by the scale of Walmart’s first-party customer insights. These solutions empower advertisers to precisely target, engage, and measure the impact of their campaigns across their omnichannel audiences.
To address the pressing need for standardization, the IAB and the Media Rating Council (MRC) have joined forces in a collaborative, cross-industry effort to create measurement guidelines. This significant initiative aims to establish uniform practices that will benefit both RMNs and advertisers. IAB Canada invites all stakeholders to contribute by providing commentary and input on these proposed guidelines by October 13.
Join us on October 3: Business of Digital Retail Media – Powering Purchase
As Retail Media continues its rapid ascent, RMNs and retailers are constantly innovating to meet these challenges by modernizing their technology stacks and solutions. We invite you to dive deeper into the evolving world of Retail Media with us. Book your spot today by clicking here.
Sources and Further Reading:
- 2022 IAB Canada Internet Ad Revenue Survey
- IAB SEA+IN: 99% of Asia Marketers increasing retail media spend says new research report
- Why retail media networks need to start acting like media companies—not retailers
- The Trade Desk’s revenue climbs thanks to retail media, connected TV
- Walmart Connect signs on to test UID2
- IAB/MRC Retail Media Measurement Guidelines