Why wouldn’t it be? Trading advertising space (or time) in e-retailing properties offers brands the advantage of, on the one hand, showing their messages the closest possible to the point/moment of sale and, on the other, to do so in a property that offers targeting based on purchase profiles, not general preferences or even intent. Conversely, it presents retailers with a significant new revenue stream, indeed one that delivers much higher margins that their standard sales operations. It’s no wonder then that Retail Media is growing exponentially – forecasts for 2023 estimate that it will become a 50 billion dollar market. This year digital ad spend may not be the usual high growth story (mostly due to macroeconomic causes) however, in the expected redistribution of spend across channels, Retail Media is certain to be a stand out winner.

For retailers, it also appears a relatively straightforward opportunity, especially on the sales side – after all, they have had historic trade marketing agreements with a plethora of brands that are present in their physical stores and shelves. What’s more, even if the new retail media budgets come out of offline trade marketing (rather than, to the dismay of publishers and platforms, existing digital display spend), retailers would just be pre-emptively cannibalizing a current revenue stream with a much more potent and forward looking source of income. They also have the sales force to do all this, albeit one that will need high-intensity training to ramp up their game. Finally, they also possess plenty of options if they do not want to go it alone – they could work with a third party (known as “Retail Media Network”) or, indeed, they could form alliances with other retailers, though judging how publishers have fared in this chronic prospect, one should be cautious, if not highly skeptical.

And yet challenges abound – though some are simpler than others: for instance, open programmatic marketplaces are to be avoided, not due to lower CPMs but more because of the occasional questionable profile of brands displayed, that may result in image issues. Retailers should steer away also from the ‘clutter’ temptation: more ad placements per page not only translate into lower average CPMs but they impact negatively users’ CX – it would indeed be a pity if, to gain a few dollars more, retailers end up losing customers whose LTV (lifetime value) certainly exceeds marginal ad sales. And they should be extremely diligent when it comes to privacy and data collection – losing trust can have severe consequences, let alone the fact that winning it back is the toughest of endeavors.

Broadening the issue of data into tech and tools, retailers must address inevitably the issue of strategic partners – given the size of the opportunity, they are certainly going to be inundated by offers and pitches for their business. They should first take a step back – and not only to update their list of choice criteria, which should certainly include fee levels, effectiveness of integration for 1st party data-driven targeting, measurement and reporting as well as 2nd party data deals potential and, ultimately, personalization. They should start with bringing in existing partners to their e-commerce operation that know their business (and their customers) well and, crucially, are not involved in advertising – i.e. they don’t have skin in the game. A neutral and engaged current partner can act as an advisor for the complicated decisions to be made and as a facilitator for the first steps, limited or drastic as they may be. Let’s talk.

ATCOM: From Digital to Purpose