The health restrictions linked to the COVID-19 crisis have greatly accelerated the growth of e-commerce and in its wake, the development of retail media (+42% of investments between 2020 and 2021 according to Oliver Wyman).
All the big distributors are getting into it and are starting to promote their retail media offers, trying to attract advertisers to their solutions with promises that seem very attractive.
How can brands better communicate on these new channels (marketplaces, e-commerce, etc.), optimize their media investments and, by extension, their product sales?
Retail media, new sales opportunities for brands and distributors
Retail media corresponds to the new advertising formats available from online distributors – food (Carrefour, Amazon, Cdiscount, etc.) or specialized (Joué Club, Fnac-Darty, etc.) – allowing brands to position themselves in environments favorable to the act of purchase by benefiting from consumer segments qualified by their purchasing behavior: products purchased, frequency, average basket, etc.
For distributors, retail media provides additional revenue (via hyper-targeted advertising and access to customer data) and allows them to better serve the return on investment of their partner brands.
Distributors who have reached a critical volume of traffic and can deploy their own sales force, choose to develop their own technologies to monetize inventory (eg Carrefour Links, Amazon Advertising, Infinity Ads, etc.). Others opt for third-party solutions like Criteo.
A promising but still nascent media channel for advertisers
That said, retail media is still an embryonic ecosystem both from a technological point of view and from the point of view of brand adoption, and this poses several challenges:
- The strategic choices of budget allocation are made complex with the appearance of new platforms and new functionalities on each of the offers. Brands still often lack methodology in their decision-making.
The platforms are still not very ergonomic and offer few automated solutions. The operational management of campaigns therefore remains very time-consuming and is currently a hindrance to the internalization of the management of media campaigns.
Reading and interpreting the results requires advanced skills with the emergence of new KPIs, such as the New To Brand (NTB) metric on Amazon, new attribution methods, and few benchmarks to rely on. For example, a campaign generating a ROAS (Return On Ad Spend) of 20 may be perceived as a clear success, while it masks a reality that may be quite different: the product in question could have been sold without media coverage, and the budget shifted to a more complex category for sale.
The availability of data in the interfaces is still only partial, and it is often necessary to go through the APIs to obtain additional insights, which brands rarely do independently. This is the case, for example, of Amazon Marketing Cloud, a veritable gold mine of insights made available by Amazon, which is still largely under-exploited by brands.
Need for support for greater added value
To make the best decisions and maximize the use of retail media technologies, brands must rely on rigorous methodologies and multi-market place expertise. It’s a question of knowing both how to master media techniques, but also how to set up advanced data use cases that generate insights, in order to:
- Select the product mix to publicize
Distribute budgets optimally on the different platforms
Understand the economic models of each platform: distribution of media and data costs, technical costs, etc.
Understand how attribution models work to better understand the ROI of campaigns
The promise of retail media is becoming essential in the mixed media strategy of brands. However, brands must consider the need to carefully select their partners and the preferred use cases to generate new sources of growth, optimize the user experience and improve the return on investment.
In addition, retail media is currently in full evolution. The market has not yet structured itself around standard and unified proposals.