The retail media landscape has rapidly transformed from a niche digital advertising avenue to a significant force, challenging even the dominance of platforms like Amazon and Walmart and allowing brands to open up an entirely new revenue stream. According to eMarketer, “worldwide retail media ad spending is on track to increase by nearly $100 billion between 2020 and 2025,” and “its 21% rise this year will outpace growth rates in nearly all other forms of ad spending.”
With this growth, advertisers can reap major returns on ad spend (ROAS), but they also face a fragmented ecosystem where varying formats, technologies and measurement systems make it difficult to create a unified strategy. Enter a retail media boom and a subsequent retail media headache.
This guide offers practical insights into navigating the complexities of this evolving and worthwhile space while ensuring optimal use of retail media spend.
But First, Understanding the Fragmentation
Retail media networks (RMNs) have multiplied as retailers monetize their digital real estate. In short, new RMNs are popping up every single day with varying niches, specialties and user experiences. While this provides new ways for brands to reach consumers, it fragments the landscape.
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Advertisers must now manage campaigns across a variety of platforms, each with its own inventory, technology and measurement system. This introduces challenges around efficiency, data siloing and performance tracking.
Embrace Platform Diversity: Allotting Spend for Big, Upcoming and Niche Marketplaces
While fragmentation presents challenges, it also offers significant advantages. The diversity of platforms allows brands to reach consumers across different shopping environments. For example, a hardware brand can leverage broad platforms like Amazon or Walmart for wide reach while also targeting specific DIY audiences through Home Depot or Lowe’s.
This diversity enables brands to balance scale and precision. Generalized marketplaces reach mass audiences, while specialized platforms allow for tailored targeting. By diversifying spend across platforms, advertisers can achieve more precise, audience-specific engagement while benefiting from the breadth of larger networks.
Standardize Metrics and Measurement
A major challenge in the retail media space is the lack of standardized metrics. Unlike traditional digital platforms, where metrics like clickthrough rates and conversion rates are universally understood, RMNs often use proprietary measurements. This makes cross-platform performance comparison difficult.
To address this, advertisers should establish internal benchmarks, such as ROAS or cost per acquisition (CPA), and apply them consistently across platforms. Consistent metrics also allow advertisers to more easily reallocate budgets toward the most effective platforms. With a unified view of performance, brands can focus resources on the strategies and networks that yield the best return.
Integrate Technology to Manage Complexity
Managing multiple RMNs can be resource-intensive. Each platform has its own buying interface, reporting system and optimization tools, creating operational headaches. To streamline this, advertisers are increasingly turning to technology that integrates various networks into a single interface – platforms that are becoming glaringly crucial for navigating the retail media boom.
Programmatic tools help automate the purchasing process and centralize campaign management across multiple platforms. These technologies save time and reduce human error, allowing advertisers to focus on performance rather than platform-specific operations.
Additionally, these platforms aggregate inventory, provide cross-network analytics and centralize management, helping advertisers simplify their operations while still achieving targeted reach across diverse retail media networks.
Continue to Embrace Data Clean Rooms, Despite Wavering Sentiments on Third-Party Cookie Deprecation
One of the most promising solutions for solving fragmentation in retail media is the use of data clean rooms. Data clean rooms allow retailers and advertisers to collaborate on insights and measurement without exposing sensitive first-party data. Despite wavering sentiments on third-party cookie deprecation (such as Google’s recent backing out of its plans), a Q2 2024 Forrester survey found that 87% of B2C marketers are using a data clean room. These environments are designed to protect consumer privacy while enabling more advanced data analysis and cross-platform insights.
In a fragmented landscape where each RMN operates with its own datasets and metrics, data clean rooms provide a secure way to combine insights across platforms. By integrating data from multiple retail media networks, advertisers can gain a more holistic view of customer behavior and ad performance.
This allows for better cross-platform measurement, more accurate attribution and, ultimately, more informed budget allocation. As retail media fragmentation continues to grow, data clean rooms will be crucial in unifying campaign insights and enabling advertisers to optimize their strategies effectively.
Test, Learn, and Iterate Through the Retail Media Boom
The retail media landscape is evolving, and retailers and advertisers must adopt a test-and-learn approach. Experimenting with different platforms, formats and strategies is key to staying competitive. What works today may change as new platforms emerge and existing networks evolve.
A willingness to iterate is essential. By continually testing and refining campaigns, brands can ensure they stay ahead of the curve and adapt to the changing landscape, ultimately optimizing their retail media strategies. Adopting a test-and-learn mindset means brands can stay competitive in this rapidly evolving digital landscape, ensuring operational efficiency and optimal performance across platforms.