More people are shopping online than ever before and this shift in consumer behavior is changing the way brands promote their products. In 2021 for the first time ever digital advertising accounted for well over half of global ad spend.

While brands have become accustomed to targeting audiences as they browse social media or research products on Google now is the time to take advantage of retail media networks and connect with consumers as they shop.

What is Retail Media?

The ads that are featured on a retail website app or marketplace are known as retail media. And the retailers that host these ads are retail media networks. The major benefit of retail media networks is that they allow brands to advertise their products as consumers shop. Because it is near the point of sale and your audience is actively seeking out products they're more likely to convert.

Your ad could appear when someone types a relevant search term into Amazon or as shoppers browse a particular product category on their favorite supermarket site. This is the eCommerce equivalent of in-store advertising and it can help brands capture audiences at the most influential point in the digital consumer journey.

Retail media networks open up digital spaces that were previously off-limits to brands. Amazon led the way by introducing its sponsored ads. Now other online retailers are following in their footsteps.

The advantages of Retail Media Networks

Retail media networks have far-reaching consequences for all eCommerce stakeholders.

For online retailers it provides a new revenue stream which is huge when you consider that CPG profit margins have been decreasing. For the end consumer it means lower and more consistent prices because stores want to avoid sudden price hikes that could negatively impact traffic and ad revenue. These highly targeted ads tend to be more relevant and less annoying too.

Retail media is also changing the way shoppers and brands interact. While it will take some time for brands to get used to it is worth the investment because of all the unique advantages retail media offers them. These include:

1. In-depth data

Because sales take place on their platforms each retail media network can collect first-party data on buyer behavior. This is more reliable than the data coming through third-party cookies. And with all internet browsers moving to phase out the use of third-party cookies it's futureproof too.

The data collected varies a lot but if the retail media network you choose has a loyalty program it may have access to in-depth and insightful information about shoppers that will allow you to target and customize your ads for maximum impact.

According to data from eMarketer this is the main reason CPG brands chose to work with retail media networks in 2021. A massive 62% of respondents cited it as their motivation. Although it's not just CPG brands that are taking advantage of retail media networks. According to recent research from McKinsey 75% of non-CPG advertisers plan to increase their spending in this area.

2. Next level personalization

Retail media allows you to customize your message to increase sales improve ROI and provide a seamless customer experience. But you can go even further by personalizing your offers to appeal to different audience segments.

As an example of the high-quality targeting available let's look at US supermarket Kroger. Loyalty cards are used with 96% of transactions on its retail site so brands can target shoppers based on everything from household size to personal preferences like their favorited flavors. Many retail media networks even enable brands to send their customers enticing offers coupons and highly relevant email promotions.

This level of personalization makes it easy for brands to attract new customers and introduce current users to new products.

3. Perfectly timed ads

Retail media allows you to get your message to consumers who are in shopping mode. They are on a retail website ready to buy a product so there's no better time to promote your brand. Conversions are just one click away.

When executed effectively retail media ads are distinctive and prominently placed so they're a great way to stand out and gain prominence on the digital shelf.

4. Clear conversion tracking

Because ad impressions and sales take place on the same platform you can accurately track the impact of your ads.

This provides clear ROI insights and allows you to invest more in the strategies that boost your bottom line the most. With the likes of Facebook and Google there isn't the same level of accountability because the consumer journey can't always be tracked to the point of sale.

With research showing that 74% of brands now have dedicated budgets for retail media networks there is no doubt that the above benefits have won businesses over.