Retailers, faced with shrinking profit margins and intensified customer competition, can no longer afford to overlook the advantages of Retail Media Networks as a means to enhance revenue. Currently, digital advertising accounts for 68% of all advertising spending, a figure projected to rise to 75% by 2028. However, this shift in marketing expenditure comes at the expense of retailers, with platforms like Facebook and Google dominating nearly half of the digital ad market. So, in this crowded marketplace, how can retail media networks and the brands employing them ensure their effectiveness?
Today’s Fast-Moving Consumer Goods (FMCG) brands are increasingly reallocating marketing budgets toward digital advertising channels which offer enhanced value, flexibility, and precise consumer targeting. Traditional in-store methods typically involve costly negotiations, intricate planning, and labour-intensive execution. Furthermore, post-pandemic shoppers are now more receptive to digital advertising than ever before.
The growth of retail media networks
When Amazon launched the first retail media networks in 2012, it pioneered a new advertising channel estimated to be worth over $100 billion by 2026. Retail media networks are digital advertising ecosystems owned and operated by retailers, enabling them to display targeted ads to their customers across digital platforms, including websites, mobile apps, and search results.
These networks offer highly precise targeting, leveraging customer profiles, demographics, browsing behaviour, and purchase history. Retail media networks also furnish advertisers with comprehensive insights into ad effectiveness, encompassing not only clicks but actual purchases.
Retail media networks have evolved into vital revenue streams for retailers, boasting substantial profit margins as they capture 100% of advertising revenue. Advertisers are willing to pay a premium for retail media network services due to their precision and effectiveness. Leading retailers with significant online presence, such as Tesco, Asda, and Sainsbury’s, have established their retail media networks, solidifying their positions as key players in the digital advertising landscape. Nevertheless, retail media networks are not exclusive; most FMCGs utilize a blend of trade spend, digital advertising, and RMNs to optimize their campaigns.
Effective data management plays a pivotal role for retail media networks, enabling precise ad targeting based on customer data, purchase history, browsing behaviour, and demographics. Building a comprehensive set of behavioural shopper data stands as a fundamental pillar for success in this domain. The challenge lies in how to collect this data to effectively target consumers and convert them into loyal customers. The solution lies in implementing a closed-loop digital couponing system within retailers, facilitating seamless integration and secure management of mobile coupon campaigns and data within retail media networks, thereby stimulating engagement and sales.
savi’s mobile coupon and digital clearing platforms can seamlessly integrate with existing Retail media networks, enriching digital ads by presenting consumers with opportunities to win, sample, or receive discounts on any product. These mobile coupons can be distributed via QR codes or digital links through any retail media network display, including point of sale, websites, apps, emails, and digital out-of-home advertising.
Maximise advertising on retail media networks
Here are our top five strategies for maximizing the synergy between Retail Media Networks and mobile coupons:
- Elevate the shopper experience by transforming in-store campaigns from passive to interactive with the influence of mobile coupons.
- Attract new loyalty sign-ups by offering rewards; our research indicates that a significant percentage of shoppers would readily sign up for a loyalty app in exchange for a mobile coupon.
- Harness the power of geo-targeting in mobile coupon campaigns to effectively personalize ads for the right audience using social media channels.
- Evaluate the effectiveness of different campaigns in real time and adjust them accordingly; mobile coupon campaigns can be scaled up or down based on performance.
- Leverage basket data to reward loyalty by tailoring offers to the shopping habits of existing customers, presenting ads that encourage them to explore a range of products or sample items suited to their preferences.
In conclusion, Retail Media Networks have reshaped the advertising landscape, offering retailers new revenue streams while furnishing FMCGs with highly targeted advertising opportunities.