To say retail media networks are booming might be an understatement. With retailers recognising the immense potential for revenue generation and increased customer engagement that this channel offers, media agencies are now scrambling to build their retail media offerings to meet demand. This year, Assembly announced that it expects revenues from this fast growing channel to triple over the next year and another major agency recently acquired a B2B e-commerce business to add retail media capabilities to its portfolio.

And they are not wrong – retail media ad revenue is forecast to surpass TV by 2028, accounting for over 15% of total ad revenue. Savvy marketers will make sure no money is left on the table, particularly as we approach the Golden Quarter, where retail media will be a crucial part of many brands’ digital campaigns over the festive season.

Why choose retail media in the first place?

With today’s ever changing advertising landscape, ROI optimisation is always top of mind for every marketer. Retail media networks provides the tools to achieve this:

• Compliant data – retail media networks provide a rich seam of first-party data to offset the demise of third-party cookies and consumer concern about data sharing.

• Point of sale adjacency – retail media enables brands to target consumers as close as possible to the point of purchase, whether online or in-person checkout (because retail media also includes in-store touchpoints).

• Accurate campaign measurement – access to first-party data enables closed-loop measurement of how consumers respond to adverts on and offline.

• Reach – lockdown’s ecommerce rush has become a regular consumer habit. ONS data shows that online contributed to 26.5% of all retail sales in May 2023 compared to 19.7% in February 2020.

Hiding in plain sight

As obvious as it may sound, advertising is at the core of retail media, and one ad format in particular has paved the way to its evolution and success. From in-store labels and vouchers, to digital screens and on-line product recommendations, native has adapted to provide brands with a powerful mix of quality media and performance. It’s not surprising that globally, native non-social ad spend is predicted to grow to $18.5 billion in 2023 from $10.17 billion in 2019.

Native ads blend in with whatever their surroundings are, camouflaging themselves into the look and feel of the original content. This flexible and seamless integration meant the format has escaped increasing consumer frustration with intrusive online advertising. Some 86% of consumers have a positive or neutral view of native ads. In addition, native gets five times more engagement than display ads. This makes it a natural choice for retailers for whom shopper experience is paramount, offline and online.

Yes, because, as mentioned, native has been in the retailers’ tool belt long before it became a digital format. Ever had your attention drawn towards a colourful aisle-end display in a supermarket? These aren’t just there for aesthetic reasons, instead they are marketing opportunities that catch the eye while also blending into the shopping experience.

But native is not just a one trick-pony. Besides its merits as a versatile and quality channel, its increasing sophistication delivers performance at all stages of the funnel from traffic, brand awareness, reach and engagement. Stand-out native formats such as video masthead ads and interactive connected TV pre-rolls further catch the eye as shoppers browse retail sites bringing them closer to the desired action.

Next in the retail media evolution

So, the benefits and how they work are clear, but it’s not all plain sailing for retail media networks. By their very nature, they come with a scale problem. Advertisers can find themselves restricted to only the shoppers of that particular retailer, with a finite pool of ad inventory to select from.

Future-thinking retailers are shaking up this paradigm by going beyond their owned and operated sites and apps, setting their sights on the untapped potential of the open web. Through partnerships with online publishers, these retailers can ensure that user privacy is top of mind when expanding their retail network reach.

The reasoning behind retailer-publisher partnerships is clear: both have deep seams of first-party data gathered through trusted relationships with shoppers and readers. These partnerships enable the safe and secure matching of retailer data with that of publishers for effective targeting at scale. For example, if a brand is trying to target male health enthusiasts in the 40-45 age bracket, an advertiser could find those segments within both a retail network and the readers of a lifestyle magazine, combining both audience profiles to increase reach.

Most importantly, this approach provides a solution for advertisers entering the post-cookie world, offering a way to close the addressability gap while keeping audience privacy front and centre. Through collaborative approaches – in stark contrast to the closed-off nature of data held within walled gardens – such as those between retail media networks and publishers, will advertisers continue to see results when third-party identifiers disappear.

This holiday season retail media is high on marketers’ wish list. Fortunately, the secret to succeed with it is not a secret at all. The power of retail media lies within its very nature: a rich and reliable first-party data environment, born and evolved as an effective native advertising channel, with the potential to expand and stand out thanks to publisher synergies.

• John Stoneman, SVP of global demand at TripleLift, a digital advertising platform at the intersection of creative and media.