Retail Media Networks (RMNs)
Retail media networks (RMNs) are a powerful and evolving component of the digital marketing ecosystem. They enable retailers to monetise their digital properties and data by offering advertising opportunities to brands and suppliers.
What is a retail media network?
A retail media network (RMN) is an advertising infrastructure owned and operated by a retailer that publishes advertisements across digital channels. Purchasing ad space on an RMN can help brands of all sizes develop digital marketing strategies.
Brands purchase these ads across digital channels, such as websites, mobile apps, streaming services, email channels, stores or partner assets like social networks and digital billboards.
Retail media networks may be owned by digital-first operations (Amazon), marketplaces (eBay), mass merchandisers (Costco Wholesale), grocers (The Kroger Co.), department stores (Macy’s), category specialists (The Home Depot) or delivery services that support retailers (Instacart).
RMNs aim to help customers discover and learn about the retailer as they shop. Think of retail media like a ‘digital shelf’. It can help brands further increase their visibility to shoppers – in-aisle specials, promos and deals can stand out to shoppers in physical stores.
How retail media networks work
Retailers enable brands to buy advertising across a collection of digital channels (e.g., websites, apps) that include both channels owned by the retailer directly and channels owned by third-party media companies. These companies work with the retailer to offer ad inventory to brands to market their products beyond a retailer’s owned properties.
Suppose retailers want to expand a brand’s reach with a wider audience. In that case, they may work with media companies to open ad space inventory for third-party brands or activate their other digital properties.
There are a few key components of RMNs:
- First-party data: Retailers possess valuable first-party data, including purchase history, browsing behaviour and customer demographics. This data allows for precise targeting and personalisation of ads.
- Advertising channels: RMNs encompass digital touchpoints, including on-site ads, in-store digital displays and off-site ads.
- Ad formats: Sponsored product ads, display banners, video ads, native ads and search ads
Benefits of retail media networks
Retail media networks offer several benefits for retailers and advertisers alike. For retailers, RMNs can offer new revenue streams, allowing them to monetise their digital real estate and first-party data by selling advertising space to brands. They also enhance the customer experience by leveraging data to deliver relevant ads and personalising recommendations.
When brands advertise on a retailer’s website or app, the ads can feel more relevant to consumers browsing online. When shoppers engage with a brand’s retail media or purchase their products from an online store, the third-party brand can receive first-party insights that can help them better understand their audience’s shopping patterns.
As shoppers browse for specific products, they may come across sponsored ads from a brand that relate to what they’re looking for on a retailer’s website. These ad placements can help shoppers discover a new brand or inspire them to try a new product, which can help retailers increase sales.
RMNs also offer several benefits for advertisers. Retail media networks bring advertisers closer to the point of sale, meaning ads may be more likely to convert. Advertisers have access to and can leverage the retailer's first-party data to target ads based on customer behaviour, preferences and purchase history.
Ads are shown to shoppers who are already engaged and have high purchase intent, leading to better conversion rates. Lastly, RMNs provide detailed analytics and reporting, allowing advertisers to track performance and return on investment (ROI).
Trends in retail media networks
Retail media networks are evolving rapidly, driven by technological advancements and consumer behaviour shifts. Here are some key trends in this space:
Integration with e-commerce platforms
Retail media networks are increasingly integrating with e-commerce platforms to create seamless shopping experiences. This integration allows personalised advertising to guide consumers directly from ad exposure to purchase. By leveraging first-party data from e-commerce sites, retailers can deliver highly targeted and relevant ads, improving conversion rates and customer satisfaction.
Advanced data analytics and AI
The use of advanced data analytics and artificial intelligence (AI) is transforming retail media networks. Predictive analytics and machine learning enable retailers to anticipate consumer behaviour and optimise ad placements. Real-time insights allow advertisers to adjust strategies quickly, maximising ROI and ensuring that marketing efforts are effective and efficient.
Personalised advertising
Personalised advertising has become a cornerstone of retail media networks. By utilising detailed customer profiles and segmentation, retailers can deliver ads that resonate with individual shoppers' preferences and habits. Dynamic creative optimisation further enhances personalisation by automatically generating and adjusting ad content based on user behaviour and engagement, leading to higher engagement and conversion rates.
Omnichannel strategies
Omnichannel strategies are critical for retail media networks. They ensure that messaging and branding are consistent across all customer touchpoints, including online, in-store and mobile. By integrating data from various channels, retailers can create a unified customer journey that improves the shopping experience and fosters stronger customer loyalty.
Expansion of retail media networks
Partnerships and collaborations between retailers, brands and advertisers drive the expansion of retail media networks. These alliances extend the reach of media networks and offer more comprehensive advertising solutions. Additionally, integrating with third-party platforms and ad networks enhances capabilities and provides advertisers with broader audience access.
Programmatic advertising
Programmatic advertising automates the buying and placement of ads, improving targeting precision and operational efficiency. A key aspect of programmatic advertising is real-time bidding, which dynamically places ads based on current market conditions and user behaviour, ensuring that ads reach the right audience at the right time.
Augmented reality (AR) and virtual reality (VR)
AR and VR enable interactive ads and virtual shopping experiences that captivate consumers, drive engagement and enhance the likelihood of conversions. By providing a more engaging customer experience, AR and VR help retailers stand out in a crowded marketplace.
Increased focus on measurement and attribution
Retail media networks emphasise measurement and attribution more to understand the impact of different marketing touchpoints. Multi-touch attribution models help retailers track the customer journey across various channels and determine the effectiveness of their advertising efforts. Key performance indicators such as return on ad spend (ROAS), conversion rates, and customer lifetime value (CLV) are critical for evaluating success.
Retail media networks represent a significant opportunity for both retailers and brands. By leveraging first-party data and providing targeted advertising solutions, RMNs can enhance customer experiences, drive sales and generate new revenue streams.
We support brands to leverage digital retail solutions so they can launch and scale their own retail media networks and unlock new revenue streams. By offering strategic and digital expertise, we help retailers overcome common obstacles so they can capitalise on this growing opportunity. Whether brands choose to buy or build their RMN platform, we act as a strategic partner to help them achieve success.
Further reading
Check out these resources to learn more about retail media networks and its role in people-centric innovation.
