In recent years, the marketing landscape has undergone a significant transformation with the emergence of retail media networks, heralding what many consider to be the third wave of digital advertising. As we delve deeper into this phenomenon, it becomes clear that retail media networks are not just a fleeting trend but a substantial shift that is reshaping how brands engage with consumers and measure the effectiveness of their advertising efforts.
The Rise of Retail Media Networks
Retail media networks are rapidly asserting themselves as a dominant force in digital advertising. GroupM, one of the world’s leading media buyers, anticipates that by 2028, RMNs will eclipse traditional TV advertising in terms of spending. This shift indicates the broader changes in consumer behaviour and technological advancements favouring more direct, measurable, and data-driven advertising approaches.
Ken Mandel, Regional Managing Director of GrabAds and Brand Insights also cites McKinsey’s latest findings, stating that RMNs are a $100B global business on a hyper-growth trajectory. Notably, RMNs are growing even faster in Southeast Asia than globally, with expected growth to hit $4.7B by 2030 based on a GrabAds and Kantar report entitled ‘Unleash Your Full Potential with Retail Media Networks.’ Additionally, the Kantar Media Reactions Report 2022 finds that RMNs can perform up to seven times better than other channels due to superior ad equity, meaning consumers are more receptive to ads on RMNs than ads on other channels.
What Are Retail Media Networks?
At their core, retail media networks are platforms that leverage first-party transaction data, extensive audience reach, and precise attribution metrics. This combination allows advertisers to directly link their spending on ads to tangible sales outcomes, providing a clear measure of return on investment (ROI). These platforms are designed to offer advertisers unprecedented insights into consumer behaviour, enabling them to target their messages more effectively than ever before—imagine having a crystal ball that actually works!
Key Components of Effective Retail Media Networks
To understand the success of retail media networks, it is essential to consider their fundamental components:
– First-Party Data: The use of first-party data is crucial for targeting and tracking consumer behaviours, preferences, and purchasing patterns.
– Sizable Audience Reach: The ability to reach a large and relevant audience ensures that advertising efforts are wide-reaching and targeted to the right consumers.
– Attribution: The capability to directly correlate advertising spending with sales results is perhaps the most significant advantage, allowing for fine-tuned marketing strategies. It’s like hitting the marketing jackpot!
From Art to Science: The Evolution of Marketing Strategies
The transition from traditional marketing art to a more scientific, data-driven approach has been significant. Retail media networks embody this shift, utilising advanced analytics and AI to enhance decision-making and strategy development. This evolution marks a pivotal change in how marketing strategies are crafted, moving away from intuition-based approaches to those grounded in robust data analysis. After all, why guess when you can know?
Consumer Behaviour and Retail Media
Today’s consumers demand convenience and relevance in their shopping experiences. Retail media networks cater to these expectations by providing contextually relevant advertisements that are aligned with the consumers’ immediate shopping needs. According to the Grab Food and Delivery Report 2023, platforms like Grab have noted that about 66% of consumers do not have a pre-defined purchase intention when they log in, which presents a unique opportunity for brands to influence decisions at the point of sale. Furthermore, the same report states that 91% of consumers have used the Grab app to discover new restaurants or stores, highlighting the platform’s power as a brand-building tool.
While retail media networks are predominantly performance-driven, they also play a crucial role in brand building. They support full-funnel marketing strategies, from raising brand awareness at the top of the funnel to driving conversions at the bottom. This dual capability makes retail media networks an invaluable tool for marketers aiming to achieve a range of marketing objectives. It’s akin to enjoying the best of both worlds — savouring the cake with the added sweetness of enhanced returns on investment.
Looking Ahead: Future Prospects and Challenges
As the landscape continues to evolve, brands must stay agile and adapt to fully leverage retail media networks, embracing new technologies and innovative strategies to stay competitive.
In a recent discussion at the CEO & CMO Summit by MMA Global, Ken Mandel and Rohit Dadwal, CEO of MMA Global APAC, outlined key strategies for maximising RMNs in Vietnam and Southeast Asia:
- Choose the Right Partner: The RMN landscape in SEA is diverse, with each platform offering unique strengths. Select partners with large, engaged audiences, a flexible ecosystem, and an omnichannel presence for extensive reach.
- Go Full Funnel: Treat RMNs as a full-funnel solution to drive both brand building and performance, ensuring optimal returns.
- Start Today: Move beyond the misconception that RMNs are just for CPGs. McKinsey’s analysis indicates over 75% of non-CPG advertisers plan to increase their RMN spend. Consider allocating at least 10% of your budget to RMNs to tap into this effective channel.
Integrating retail media networks into marketing strategies offers businesses a compelling way to enhance brand visibility and drive sales performance through data-driven insights. As we look towards a future where these networks increasingly dominate digital advertising, the importance of understanding and utilising these platforms cannot be emphasised enough. Brands that can effectively harness the power of retail media will likely find themselves at the forefront of the digital advertising revolution, reaping significant rewards in terms of customer engagement and ROI. And who wouldn’t want to be a part of that winning team?
(With Rohit Dadwal, CEO, MMA Global APAC and Global Head of SMARTIES Worldwide)
