2024 Predictions: Retail Media Networks
Dear business professionals,
In recent years, retailers have been utilizing retail media networks (RMNs) to attract advertisers and enhance the customer experience with their favourite brands and products. These networks offer access to valuable first-party data, making them a lucrative option for advertisers. However, in order for RMNs to reach their full potential, they need to mature.
Luckily, 2023 saw significant strides in the maturation of RMNs, and this trend is expected to continue in 2024 as more advertisers test and integrate these networks into their media strategies. Here are some key directions that RMNs will take in the coming year.
Standardization is Key for RMN Maturity
Last year, the Interactive Advertising Bureau (IAB) released RMN guidelines for public comment, aiming to establish a standard way of comparing different networks. This move will promote more meaningful discussions about the value that advertisers gain from these networks. As metrics become more standardized, we can expect to see an increase in ad spending on RMNs.
According to Forrester's Q3 2023 B2C Marketing CMO Pulse Survey, half of CMOs stated that "rationalizing retail media with other media investments" is one of their biggest challenges with retail media. As standardization spreads, advertisers will be able to compare performance between different RMNs and measure the effectiveness of RMN campaigns against other marketing channels.
More RMN Use Cases to Choose From
As RMNs continue to mature, advertisers will have a growing number of use cases to choose from. Forrester has classified RMNs as an "emerging" technology, meaning that while we can expect growth, there will also be some growing pains. Currently, there are four core use cases for RMNs: first-party audience targeting, onsite activation, offsite activation, and near-real-time reporting. However, as standardization increases and RMNs gain more acceptance, we can expect to see a wider range of extended uses.
Some of the extended use cases identified by Forrester include data clean room environments for data collaborations, multitouch attribution, forecasting and scenario planning, incrementality measurement, and creative asset management. This expanded menu of uses will provide advertisers with more options for utilizing RMNs to their full potential.
Offsite RMN Channels will Rise as Cookies Crumble
The phasing out of third-party cookies will make retailers' first-party data even more valuable to advertisers. As a result, we can expect to see a growing interest in using this data for offsite campaigns, including connected TV (CTV).
According to Frost Prioleau, CEO of programmatic advertising company Simpli.fi, "retail media will continue its strong growth as retailers leverage their first-party data to build out ad networks and data businesses." He also predicts that much of this growth will be driven by "offsite" advertising, where retailers' data is used to target ads on the open web and/or CTV devices.
Sherry Smith, executive managing director at commerce media platform Criteo, also believes that the phase-out of third-party cookies will have a significant impact on the retail media landscape, stating that "retail media will emerge as the cornerstone of effective omnichannel advertising, reshaping the narrative of commerce media as the trusted frontier for brands."
In-Store Media Fills the Omnichannel Gap
While offsite media expands the reach and application of RMNs, this does not mean that advertisers will abandon in-store opportunities. In fact, retailers looking for a competitive edge will invest in improving the in-store experience and making ads more relevant for in-person shoppers. For example, The Home Depot is piloting video screens in some locations to provide a more engaging in-store experience for customers.
According to Smith, "expect meteoric growth in in-store retail media as retailers bridge the omnichannel gap between online and in-store experiences." She believes that retailers will continue to get smarter with their in-store screens, and brands will start bringing their CTV campaigns to retail and other out-of-home locations. This shift will be critical for advertisers to reach consumers with targeted multi-screen experiences.
In conclusion, the maturation of retail media networks will continue in 2024, with standardization, a wider range of use cases, and the rise of offsite and in-store opportunities being key factors. As technology-savvy business professionals, it is important to stay informed about these trends and consider incorporating RMNs into your media strategy for maximum impact. Keep an eye on the evolving landscape of retail media, and stay ahead of the game in the ever-changing world of advertising.
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Originally reported by Martech: https://martech.org/2024-predictions-retail-media-networks/
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