Retail media advertising has evolved into the third major wave of digital advertising, following search and social media. This trend is gaining momentum in Southeast Asia, especially in Indonesia, driven by the rapid embrace of digital technologies and shifts in consumer behavior. Major players like Grab, Gojek, Tokopedia, Carousell, and Lazada are leading this growth.
Retail Media Networks (RMNs) are advertising platforms run by retail companies that allow brands to place targeted ads on their website, apps, and digital inventories. These networks leverage its first-party data to deliver personalized advertising to enhance ad relevance and drive sales.
Retailers are harnessing their customer data to deliver precise and effective advertisements, benefiting from the rise of e-commerce and social commerce. Additionally, artificial intelligence (AI) and machine learning are enhancing the efficiency and impact of RMNs.
The growing popularity of RMNs has significantly increased advertising in this sector. A recent study by GrabAds and Kantar forecasts that advertising spending on RMNs in Southeast Asia is expected to reach $4.7 billion by 2030.[1]
Chart I: GrabAds & Kantar Study. 2023. Forecasted figures derived from a combination of several sources, including ad spend reports from large advertisers in the region, available e-commerce and digital ad spend forecasted market sizes from Statista
In Indonesia, RMN ad spending is projected to surge by 219% from 2023 to 2030, with a CAGR of 13.41% (See Chart I). This figure is 1.9 times higher than the projected global growth, highlighting RMN’s growing significance as a premier advertising platform for brands and marketers in Indonesia.
Building a Successful RMN Approach[2]
To effectively leverage the potential of RMNs, brands need to develop a comprehensivestrategy that encompasses people, processes, and technology.
This holistic approach ensures that all aspects of the organization are aligned and optimized to maximize the benefits of RMNs. These following key areas are essential for building a successful RMN approach:
- People
What resources are required for a brand to make the most of RMNs?
- The prioritization towards level and sophistication of investment should help brands to shape their staffing decision.
For example, how much of the work could be performed by existing (or new) agency partners versus what should be managed in-house.
- One of the key factors to consider is to determine who will be responsible for managing the technology necessary to execute RMN campaigns –in-house resources, agency resources, RMN resources or some combination therein.
- Process
How can brands collaborate with the right stakeholders to drive success?
- As organizations seek to broaden the potential scope and impact of their RMN investment, it’s critical that relevant stakeholders across shopper/trade marketing, retail relationship management and corporate marketing collaborate.
- It is also important to consider processes that enable collaboration between internal and external partners (e.g. Agencies, RMNs).
- Technology
What is the right technology model for managing retail media investments?
- Organizations need to determine whether they plan to utilize existing media management technologies or look for new ones.
- This should be based on an assessment of current tech capabilities relative to the organization and brand needs and aspirations for retail media investment over time.
The Effectiveness of A Well-Executed RMN[3]
Gojek, a leading retailer in Indonesia, collaborated with the local brand Dua Belibis to launch a compelling promotional campaign through GoMart, one of Gojek Ads Network’s products. The campaign aimed to captivate the target audience’s attention by offering a special promotion of up to 50% off on Dua Belibis products through in-app shopping at a top convenience retail store in Indonesia.
Recognizing the significance of a multi-channel approach in the digital space to boost awareness and interest, the campaign was strategically positioned across several prime locations within the GoMart app. This included the GoMart homepage banner, the retail merchant page banner, and the retail merchant popular product page. These in-app advertisements, part of Gojek’s Retail Media Network, provided significant visibility and engagement opportunities, giving the campaign a competitive edge.
Fig. I: How Dua Belibis spices up its sales funnel with GoMart and Gojek Ads Network campaigns, Gojek Ads Network, 2024.
The campaign yielded remarkable results, achieving a 789% increase in sales, an 8x increase in total items sold, and a 94% Return on Advertising Spend (RoAS). The collaboration between Gojek and Dua Belibis successfully harnessed the power of strategic in-app advertising and promotions, leading to substantial growth in sales and enhanced brand visibility.
This case study highlights the effectiveness of utilizing a Retail Media Network to drive consumer engagement and revenue growth. By strategically placing advertisements within their app, Gojek was able to create a highly targeted and impactful campaign that significantly boosted sales and brand awareness for Dua Belibis. This demonstrates the potential of Retail Media Networks as powerful tools for brands to connect with their audience in a meaningful and results-driven manner.
Next Steps For Brands Tapping on RMNs
Successfully leveraging RMNs requires a strategic approach guided by best practice. Without a clear plan, brands may struggle to fully realize the potential benefits of RMNs. Here are some guidelines to avoid common pitfalls and optimize your brand’s RMN performance.
- Assess your brand’s readiness
Start by evaluating your organization’s current state, with a deep dive into the effectiveness of your existing media mix and approach. It is crucial to understand the value that RMNs can offer in both the short and long term. Developing a strategic roadmap based on this assessment will help to achieve the desired value from RMNs.
- Develop a best-fit Service/Management Model
Establish an appropriate service/management RMN model for your business needs. What aspects should be handled internally, what should be outsourced, who are the partners to work with? It is important to conduct a cost-benefit analysis between hiring in-house teams compared to working with an agency partner, as this will inform your chosen model.
- Review ROI of your Agency and Media Spend
Consider engaging an independent third-party to conduct a thorough audit of your agency and media investments. Regular performance assessments that evaluate the efficiency and effectiveness of your retail media expenditures compared to agency commitments, will support your teams in ensuring the effective utilization of resources and optimization of RMN strategy.
[1] Retail Media Network (RMN) spending in Southeast Asia is projected to reach USD 4.7 billion by 2030. In Indonesia, RMN ad spending is expected to surge by 219% from 2023 to 2030, reflecting a growth rate of 13.41%. This growth is 1.9 times higher than the global growth projection, which is only 73%. See more: Mixco.id “Dinilai Tujuh Kali Lebih Efektif, Belanja Iklan Retail Media Network akan Tembus USD 47 Miliar di 2030”, May 2, 2024.
[2] R3, “Retail Media Networks – An R3 Primer Report”, September 25, 2023.
[3] Gojek Ads Network, “How Dua Belibis spices up its sales funnel with GoMart and Gojek Ads Network campaigns”, February 24, 2024.
