The Increase of Retail Media Networks Requires Standardization

For sellers that aren’t Amazon and Walmart, it might be smart to align on measurement and attribution requirements that combine silos.

The following is a guest post from Aaron Kechley, general manager of media and senior vice president of a method at Inmar Intelligence. Viewpoints are the authors’ own.

Aside from COVID-19, “retail media networks” is perhaps the phrase uttered most by grocery sellers in 2020. Amazon now declares among a couple of growing advertisement services out there, and as the world’s third-largest digital media seller, it’s seriously challenging Google and Facebook’s dominance, mainly since of its customer purchase information. As an unforeseen effect, merchants with their trove of purchase information are unexpectedly finding themselves in an excellent position in the battle over the $129 billion U.S. digital advertisement market.

Seeking to boost traditionally lean earnings margins and more efficiently complete with the similarity Amazon and Walmart, grocery chains, huge box stores, and mass merchandisers are all getting on the retail media bandwagon and developing their own networks. Earlier this year, Walmart announced a self-serve ad website to enable online marketers to buy sponsored item positionings by means of an auction-based market that likewise included in-housing its advertisement sales and analytics work. Now with accelerated e-commerce adoption and cash-rich balance sheets– thanks to pandemic-driven shifts in customer behavior– mid- and long-tail sellers are working to play catch-up on the innovation front and launch their own retail media offerings.

While the increase of retail media might be an advantage for retailers and brand names alike, it appears to be leading to the expansion of lots of siloed single-retailer offerings. This could end up holding the market back, and the fragmentation potentially relaxes the last decade of hard-won development made by media buyers to consolidate buying through a couple of transparent buying platforms (demand-side platforms, or DSPs). The driving inspiration behind this pattern was and remains the promise of increased ROI through automation, control, and performance of media investments distributed across countless publishers.

So how does the retail media market avoid fragmentation that makes purchasers seem like they are going back in time? And how do buyers make sure sellers feel fairly made up for the scarce information and media assets they have?

Taking lessons from the past ten years, merchants would be smart to align on requirements that make it possible for purchasers to use automation innovation and unify measurement and attribution. This is especially true for retailers that are not Walmart, as they may find their collective persistence on single-retailer offerings stymies general need for the retail media category.

At the same time, buyers should recognize that the power of offline retail purchase data is of greatly greater value than the majority of the information that powered the initial programmatic revolution of the previous 10 years; and the seller’s owned-and-operated media is similarly valuable. Failure to relatively compensate sellers under a standardized model will leave them no choice, however, to opt-out and go it alone, leaving the fragmentation problem for purchasers to figure out as best they can.

Like lots of markets that came in the past, interacting to grow the cumulative pie will likely reward all players handsomely and develop more alternatives and more worth overall. On the other hand, if market individuals see only a no amount video game between seller and supplier, expect Amazon and Walmart to run away with the spoils.

Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Facebook buys omnichannel customer service startup Kustomer for reported $1B

Related Posts