Retail Media Industry Expected to Reach $100 Billion by 2026
The Retail Media industry is booming, with forecasts suggesting it could reach a value of over $100 billion by 2026. But what does this mean for advertisers and agencies?
Retail Media: A New Frontier for Marketers
Retail Media refers to the practice of retailers allowing other suppliers or products to promote their offerings in their own spaces. This collaboration has existed for years under different names, such as cooperative marketing, trade media, and shopper marketing. However, Retail Media now refers primarily to digital spaces managed through specialized media companies, using advanced digital platforms that mimic the way digital advertising is bought and sold in traditional media.
Beyond Sponsored Banners and Ads
While sponsored banners and ads on apps and websites are often the starting point for a retail media strategy, other practices are also used, such as including sponsored product listings in search engines. This is similar to paid results on Google or Bing, where the first results of a search are "sponsored" products.
Why Retailers are Betting on Retail Media
The fact that large retailers like Amazon are investing in Retail Media demonstrates its profitability. For advertisers, this does not mean a radical change in the way they manage their digital advertising on other media. They can use platforms they are already familiar with to manage their online advertising, bidding for advertising space and obtaining detailed data on the additional sales generated by their ads on Retail Media.
The Path to Retail Media Success
When retailers enter the Retail Media market, they typically begin with manual use of their CMS platforms and other tools, then evolve towards using ad servers and finally opt for programmatic advertising. While there are differences between sectors, comparable levels of benefits can be achieved depending on the maturity of these Retail Media platforms.
Key Elements for Success
To successfully transition to a Retail Media business, Adform identifies three essential elements: Technology, Strategy, and Team. Choosing the right technology infrastructure is crucial, as inadequate optimization can result in revenue drops of up to 50%. Developing a retail media strategy and having the right staff are also essential. Retail media strategies require the involvement of multiple departments, including marketing, legal, and programming.
The Importance of a Well-Defined Strategy
To overcome challenges, a well-defined strategy is essential, with support from management at the highest level. Additionally, having the right staff is crucial, who understand internal politics, creates enthusiasm in teams, and is entrepreneurial enough to create a new business and manage the project.
"Anyone looking to get into the retail media business must understand that the best way to achieve the highest possible return is to show consumers products they might buy, while receiving revenue from advertisers based on performance."
According to Sergio Martín, Country Manager Iberia of Adform, this approach not only produces a higher return than other models but also improves the consumer experience and boosts overall sales.
