Why Advertisers Like Retail Media
The following is an excerpt from our recent report, Retail Media on CTV 2024, that I wrote with Mike Shields. The report is a free download thanks to sponsors LG Ad Solutions and Magnite.
Direct Access to Purchase Data and Consumer Behavior
Retail Media offers companies unprecedented direct access to first-party data, providing them with a deep and data-driven understanding of consumer behavior and purchase patterns. By leveraging data from their own ecommerce platforms, retailers can offer brands highly detailed insights into what products customers are browsing, adding to their carts, and then, ultimately purchasing or not purchasing. This data goes beyond the age/gender demographic information traditionally available for TV commercials, enabling brands to build precise consumer profiles and adjust their marketing strategies based on real-time shopping habits and preferences.
For example, a Retail Media platform might provide a brand with insights into which products are frequently bought together or how often a specific promotion leads to a purchase. This level of granularity allows for more effective campaign strategies, as brands can target consumers based on their actual purchasing intent rather than relying solely on inferred data. This direct access to purchase data makes Retail Media a powerful tool for brands looking to maximize their marketing ROI by reaching consumers at the exact moment they are ready to buy.
Enhanced Targeting Capabilities
One of the standout features of Retail Media is its ability to deliver highly precise audience targeting. Using the rich first-party data they collect, Retail Media Networks can segment audiences with remarkable accuracy, ensuring that ads are served to the right consumers at the right time. This precision is particularly valuable in an era where generic mass marketing campaigns are increasingly giving way to personalized, targeted advertising.
A Boon For Companies Without First-Party Data
Retail media is particularly valuable to Consumer Packaged Goods (CPG) and similar companies that do not traditionally sell directly to consumers. These companies lack the sort of first-party data available to, say, auto makers, where consumers are buying directly from the dealer, or to the growing list of DTC companies.
Without data from their retail partners, many of these brands are flying blind, relying on third-party data and probabilistic projections.
Attribution and Measurement Advantages
A critical advantage of Retail Media is its ability to provide clear and accurate attribution, a feature that is particularly valuable for CPG and similar brands as well. Retail Media platforms track the entire customer journey, from the first interaction with an ad to the final purchase, offering brands a clear view of which marketing efforts are driving sales. This level of transparency in attribution is rare in other advertising channels, where the path from ad exposure to purchase is often fragmented and difficult to track.
For CPG and similar brands, retail media attribution is crucial because it allows them to justify their marketing spend by directly linking ads to sales outcomes. This data-driven approach not only helps brands optimize their future campaigns but also provides valuable insights into consumer behavior, allowing them to refine their overall marketing strategies. In an increasingly data-conscious world, the ability to measure the impact of every advertising dollar spent is a compelling reason why companies are flocking to Retail Media.
