Retail Media Networks Explained: Everything Brands & Retailers Should Know

Retail media networks (RMNs) are quickly becoming a must-have tool for retailers and brands alike. They offer retailers a way to monetize their digital spaces and first-party data while giving advertisers highly targeted access to consumers when they're actively shopping.

As RMNs evolve, they continue to provide exciting opportunities for increasing revenue and personalizing customer experiences. In this article, we'll explore what retail media networks are, how they work, and the benefits and challenges for retailers and advertisers.

What is a Retail Media Network?

A retail media network is a platform that enables retailers to sell advertising space across their digital properties (websites, mobile apps, email newsletters, and even in-store displays) and third-party sites.

What sets retail media networks apart is their access to rich first-party customer data. Purchase history, browsing behavior, demographic information, and other key data points can be used to match consumers with relevant offers based on their needs and preferences.

Which Retailers Have a Retail Media Network?

The retail media market is booming, with both online-only players and brick-and-mortar stores launching their own advertising offerings. From digital marketplaces and department stores to category specialists in areas like grocery and beauty, here is a sample of retailers that have launched their own RMNs.

Retail media intelligence platform, Mimbi, offers a regularly updated list of RMNs to help you stay on top of the ever-expanding landscape.

Key Components of a Retail Media Network

Retail media networks are complex ecosystems that offer brands various ways to engage with shoppers through highly targeted advertising.

Brands can purchase retail media ads through two main channels:

• The retailer's own media network, often via a self-serve platform where they manage their ad spend, targeting, and creative.
• Programmatic exchanges that connect multiple retail media networks, giving brands broader reach and more efficient ad buying.

Below, we explore the key components that make up a successful retail media network and how brands can leverage them to maximize their advertising efforts:

Digital Advertising Formats

1. On-site ads are served within a retailer's platform or website

Sponsored products/search: Listings within search results for relevant products

• Real-World Example: Walmart Connect's sponsored product ads boost product visibility, consideration and conversion within relevant search results and on browse, category, item, and pre-checkout pages.

Sponsored brands: Banner ads within search results

• Real-World Example: Amazon's sponsored brand ads grab customers' attention with prominently placed, rich display and video creatives within the Amazon store.

Display ads: Banner ads that appear across the retailer's website

• Real-World Example: CVS Media Exchange allows advertisers to place programmatic display ads across their site to reach customers throughout their shopping journey.

2. Off-site ads leverage retailer data to deliver ad placements on third-party sites

Types: Web, app, display, audio, digital video, digital out-of-home (DOOH), in-game, social media, and connected TV (CTV)

• Real-World Example: Home Depot's Orange Apron Media allows advertisers to reach high-intent audiences through retargeted ads on social media and other off-site channels.

3. In-store digital advertising refers to targeted ads in brick-and-mortar stores

Types: Product displays, video screens, location-based push notifications, and smart shopping carts

• Real-World Example: Hy-Vee Red Media uses in-store digital displays to help advertisers reach and engage customers throughout itsretail locations.

Measurement

Closed-loop attribution in retail media connects ads directly to sales, showing which campaigns led to purchases. It helps brands see what's working, so they can get the most out of their ad spend.

However, with so many retailers creating their own first-party data ecosystems or "walled gardens," aligning on how to measure success is a growing challenge within the fragmented retail media landscape.

Common baseline metrics such as impressions, viewable impressions, clicks, and click-through rate (CTR) can help brands compare RMNs. While these basic metrics provide value, the most critical KPIs remain focused on transactions.

Optimization

By analyzing customer data, retailers can identify specific segments and tailor their advertising efforts accordingly. Competitive retail media networks often incorporate advanced analytics tools, such as AI and machine learning, to optimize ad targeting and performance.

These tools improve the customer experience by offering more personalized recommendations. Additionally, they can automate behind-the-scenes work like managing ad campaigns, helping to save advertisers and retailers time and effort.

Advantages of Retail Media Networks

Retail media networks offer a range of advantages for all stakeholders-retailers, advertisers, and consumers alike. From boosting revenue to enhancing personalized experiences, RMNs are transforming the way brands connect with shoppers.

Benefits for Retailers:

• Increased Revenue: Retailers can run ads across their website and in stores to open up a new, high-margin revenue stream.
• New Revenue Stream: RMNs offer retailers a fresh way to diversify income, lessening their dependence on traditional sales channels.
• Customer Engagement: Retailers can enhance customer engagement by delivering personalized offers that keep shoppers coming back.

Benefits for Advertisers:

• Closed-Loop Attribution: Retail media networks tie ad spend directly to purchases, allowing brands to track which ads are driving sales.
• Proximity to the Point of Purchase: Retail media ads often appear within a retail context, reaching shoppers when they're in a buying mindset and more likely to convert.
• First-Party Data Access: Retailers share valuable access to first-party data with advertisers, enabling highly targeted campaigns that drive better results.

Benefits for Consumers:

• Personalized Offers: Consumers benefit from a more tailored shopping experience with ads that are relevant to their preferences.
• Enhanced Customer Experience: Through interactive content and exclusive offers, RMNs make it easier for shoppers to discover new products.
• Loyalty Perks: Consumers can enjoy special deals and loyalty programs, which encourage repeat purchases and deeper brand connections.

Challenges and Considerations

While RMNs offer powerful tools for targeted advertising and new revenue streams, they're also dealing with the following growing pains:

Data Privacy Concerns

According to a study from Deloitte, 74% of US retailers cite data privacy as the biggest concern preventing them from launching an RMN.

With growing attention to data security, retailers must balance leveraging first-party data for targeted advertising with respecting customer privacy.

This is where data clean rooms come into play. Data cleanrooms are secure, controlled environments where retailers and advertisers can share anonymized data.

This allows both parties to collaborate on ad targeting and measurement while protecting individual privacy.

Integration with Existing Systems

Integrating a retail media network can be challenging. Retailers must align systems to ensure data compatibility, all while managing new ad inventory.

Partnering with a technology provider can help to simplify the integration process and drive efficiencies. A good retail media partner should offer expertise in system integration and data management and also provide ongoing support.

Check out our list of the top five qualities to look for in a strong retail media partner.

Lack of Standardization

With each retailer developing its own unique systems, data formats, and advertising requirements, it is difficult to compare campaign performance or streamline ad buying processes across RMNs.

In fact, a study from Turbyne found the average brand to workwith 25media partners over a 90-day period.Forty percent also cited having to execute individual buys across each RMN as one of the top three barriers to increased spending.

While the IAB has published multiple buying guides and established standards in an effort to promote consistency, widespread adoption from brands and retailers remains to be seen.

The Future of Retail Media Networks

US omnichannel retail media ad spending is projected to hit $129 billion in 2028, accounting for a quarter of all US media ad spending. As more retailers tap into the massive retail media opportunity, here are trends to watch in 2024 and beyond.

Emerging Trends

Omnichannel Integration

Retail media networks are becoming key players in omnichannel marketing. As a result, retailers can create seamless, consistent experiences across all touchpoints-whether customers are shopping in-store, online, or on mobile apps. It's about making sure the messaging is aligned and relevant no matter where the customer engages.

Shift Toward Top-Funnel Objectives

Retail media has traditionally served as a lower-funnel tactic. However, RMNs are helping to build brand recognition and loyalty earlier in the customer journey. According to a survey from the ANA, 31% of advertisers rank "new to brand" as their most important KPI (+22% YoY), and brand awareness has jumped to 18%, from just 2% a year ago, signaling a growing shift in focus to brand-building metrics.

Rise of Non-Endemic Advertisers

Non-endemic advertisers-those who don't sell products directly through a retailer-are increasingly using retail media networks because of the valuable customer data and precise targeting they offer. In fact, according to research from Merkle, 53% of brands in the US take advantage of data and media opportunities with retailers where they are non-endemic brands.

Predictions for Growth

• 64% of US retailers plan to implement a retail media network by the end of 2024. 91% of existing RMNs are expected to grow over the next three years.
• Retail media search ad spend will reach $33.86 billion in the US in 2024 and will account for around $6 of every $10 spent on retail media through 2028.
• Off-site retail media ad spending will grow 61.5% year over yearin 2024, reaching $10.64 billion and accounting for 18.5% of total retail media soend.

Elevate Your Retail Media Strategy with Fluent

As retail media networks continue to evolve, expanding their reach will be key for driving consistent revenue growth. This is where Fluent's post-transaction advertising solution comes into play.

By engaging customers after they've completed their purchase, Fluent helps retailers tap into a new revenue opportunity. Post-purchase ads seamlessly complement retail media networks. They leverage first-party data to deliver personalized offers that enhance the overall customer experience and drive repeat purchases.

Watch the video below to see how Fluent is helping retailers unlock loyalty through the power of post-purchase advertising.

Ready to extend the value of your retail media network with post-purchase ads? Contact us today to get started!

Check out more resources to get fluent in:

Commerce Media | Post-Transaction Advertising | Contextual Data

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