Growing Revenue = Right Message + Right Audience + Right Insights
It is evident from the previous series of blogs that retail media networks, services, and advertising platforms are being rapidly used by various B2C advertisers to reach their potential buyers through various ad formats. There is growing need for every advertiser/market is to reach a maximum number of the intended audience to increase the return on ad spend (ROAS). While retail media advertising has gained popularity in the US, only a few retail brands have been able to use its full potential simply because of the lack of expertise to indulge in an end-to-end strategy and insights-based ad operations execution for continuous optimization to reduce spillage and increase ROAS
Key aspects that brands should consider in the retail media advertising space:
Key Features 1 - Customer Privacy: The balance between utilizing the customer’s data to target them with shoppable ads and providing them a seamless and personalized experience without affecting customer privacy is highly crucial for marketers. With 3rd party cookies nearing their extinction, retailers are finding all possible ways to control first-party data to run on-site e-commerce ads (retail media ads) and off-site web ads to gain maximum traction for the advertisers, this will also create challenges like data privacy and poor customer experience.
Offering the right value: Retailers owning retail media networks should build trust amongst the customers by providing superior customer service, real-time support, replacement guarantees, timely delivery, etc., and position their brand in such a way that even the ads that are shown to them are to improve the overall customer and product experience.
Key Features 2 - Ad delivery and reporting: Be it self-service or managed services “We’ve all heard the phrase ‘half the money I spend on advertising is wasted; the trouble is I don't know which half”. Optimizing ad campaigns by targeting the relevant audience concerning demographics and devices is a huge challenge. Programmatic ads are another area of concern that makes it difficult for companies to understand where their ad budgets are spent and where the ads are displayed.
Data science: Data comes from the retailer, brand (brand here refers to retail-media networks), and the media owners (off-site ads). Data science/data analytics have provided many breakthroughs across the business functions, but the marketing/advertising functions have still not utilized their full potential, these reports can provide better insights for ad delivery at scale.
Key Features 3 - Multiple retail-media networks: It started with Amazon and now we have many brands in the retail media space trying to utilize their customer data to generate revenue, the retail media networks operate in silos and don’t have a connected eco-system between networks, hence trying to understand the buyer’s journey in different networks is difficult for retailers and CPGs. Relying on one retail-media network also might reduce the potential of reaching your desired audience, considering the market competitiveness.
Partnership: Choosing the right advertising partner who can handle the end-to-end process of strategy, brand & campaign management, measurement, reporting, promotions, media planning, and buying, and content and creatives creation can solve most of the problems, but most importantly, understand the retail-media platforms that operate in silos and connect the dots through off-site ads as well.
Choosing the right advertising partner for your retail media advertising operations
Right Message: Advertising should enhance the experience rather than detract from it. Retailers must first determine what types of messages and suggestions can inform shoppers, enhance their experience, and drive incremental transactions (e.g., search results suggestions, product videos, shopping lists), and then create a custom experience with optimized ad placements based on shopper history/behaviors, reducing clutter, and increasing response.
A partner who has an in-house team capable of producing content & creatives across various formats with the right marketing sense is key to delivering productive results.
Right Audience: To further tailor the e-commerce experience, retailers must track customer preferences, purchasing history, and click activity, as well as develop systems that directly link media exposure to sales transactions, both on retail media networks and off-site media. Also, to better understand shoppers, combine all cross-division shopper data (break down any silos) and look for possibilities to link to run programmatic ads.
A partner who has the expertise to understand how your audience is segmented in various retail media networks – an omnichannel strategic partner who can run both manual ad ops and programmatic ads on cross-platform bundling can bring the desired results.
Right Insights: As mentioned earlier, mitigating the risk of advertising spillage is one of the major challenges every advertiser face, a bottom-up approach of fixing the analytics, reporting, and insights team will help reduce the spillage drastically. With 3rd party data getting eliminated shortly, the retailer advertisers will have heaving rely on 1st party data, the below image shows how advertisers can improve their ROAS by channelizing the touchpoints across different data streams.
A partner who can understand customer data and build ad strategies around it with the focus on minimizing spillage and improving ROAS can provide value for money.
Source: L.E.K Research
Closing thoughts: Any partnership venture should bring the desired results, especially for the partner who is shedding the money, at the end of the day the ad business is all about bettering the ROAS. A partner who understands the objectives/goals of the retailer and has the capabilities of providing an end-to-end advertising solution can bring faster and more durable results. We at iOPEX have been delivering consistent ad operations and ad ops automation solutions to many fortune 500 companies through digital marketing/advertising, creative and content solutions. For a more in-depth discussion on your retail media strategy, talk to us at email@example.com or contact us
Read other blogs from the series
Blog 1: Retail media networks redefining online advertising spend
Blog 2: Developing trends in the retail media network
Blog 3: What should retail media networks consider as key factors for success?
Blog 5: How to build scalable retail media advertising operations?