Retail media ads are advertisements at or close to the point of sale, whether brick-and-mortar stores or e-commerce websites.
Perion Marketing
08th Oct 2024
Driven by the increase in online shopping, this advertising model helps brands influence customers at the moment of purchase.
Let’s discover what retail media is and how to use it to boost brand exposure.
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Retail websites such as Amazon might be the most well-known, but they are not by any means the only methods. The Interactive Advertising Bureau (IAB) categorizes retail media into five segments, as follows:
CRM
Customer-relations management media ads are popular and effective as they reach directly to the consumer’s inbox. These retail media ads include direct mail, email, coupons, and loyalty programs.
In-store
These retail media ads are offered inside brick-and-mortar stores. For instance, DOOH screens, TVs, ATMs, and point-of-sale screens. This type of ad is usually bought directly from the retailer, but programmatic-buying opportunities are also available.
Digital in-store
This type of retail media involves digital content inside physical stores that enhances the shopping experience and engages customers in real time. Retailers use digital in-store to deliver targeted content at key points in their shopping journey. For example, digital screens, interactive displays, or signs, radio ads, and in-store digital-out-of-home.
On-site
This type of advertising is sold on the retailer’s digital properties. For instance, on retailer websites, such as supermarkets, or online shopping marketplaces like eBay or Amazon. It usually includes campaign optimization and accurate targeting.
Typical formats include sponsored product ads, display banners, email-targeted coupons, and sponsored search results. These formats are usually bought on a cost-per-click (CPC) or cost-per-mille (CPM).
Off-site
This method uses retailer data to buy ad inventory outside of online retailer platforms. For instance, display, video, social, connected TV (CTV), or digital-out-of-home (DOOH).
Off-site retail media is usually bought and managed directly by retailers, or from agencies and platforms.
Leverage retail media and increase conversions with Perion
A retail media network is an advertising system that includes various digital channels offered by a retail company to third-party brands. In this model, retailers enable advertisers to buy ad spots in both channels owned by the retailer and channels owned by third-party media companies.
Retail media networks have increased in recent years. What was once the domain of a few premium companies such as Amazon, Walmart Media Group, and Target, today is a market full of retailers, fulfilment companies, and technology companies competing for the customer’s attention.
Some statistics (Statista Research Department, 2024), that show how the retail media advertising landscape has developed are:
Retail media networks are versatile, offering an array of features for advertisers, from data monetization, to social media buying and addressable TV. The following chart shows the most commonly offered features.
Retail media networks offer several benefits for brands and customers. While they help brands connect with relevant shoppers, they also help shoppers find relevant products.
The versatility of retail media means brands have several options for purchasing retail media ads. Including, but not limited to:
Direct
The brand approaches a retailer/marketplace that owns a retail media network. For example, Amazon.com. Walmart, or Target. This method can include owned property or channels, like a website or application, off-site, such as social, in-store ad space, or even connected TV (CTV) advertising.
Via demand-side platforms
These buy-side platforms provide access to multiple retail properties via programmatic ad exchanges. Multi-retailer buy-side platforms may include digital shopfronts, retail sites or applications, and also connected TV. Examples include Target, Kroger, and Disney+.
Nonretail merchants
Companies that aren’t retailers, such as hotel chains, or travel agencies, can also offer retail media ads through owned property, off-site, or out-of-home.
While on-site retail media offers consumers the comfort of online shopping, retail media broads outside websites and apps. Let’s see some examples:
This approach leverages digital and physical touchpoints within the retail environment to enhance shopper engagement and brand visibility. Let’s review some examples of retail media in stores.
These screens are strategically positioned at the end of store aisles, where they naturally draw customer attention. Endcap screens display dynamic content such as product advertisements, promotional videos, and interactive content. Brands can leverage endcap screens to highlight new products, showcase limited-time offers, or provide informative content about their products.
Self-scan devices are self-service platforms that allow customers to scan products themselves for a quick checkout process. These devices can display targeted ads and promotions related to the products being scanned, encouraging upsells or presenting complementary products.
Point-of-sale ads are displayed at checkout counters and payment terminals where customers make their purchases. These ads can include last-minute offers, cross-sell opportunities or loyalty program promotions.
Some stores leverage cooler screen doors to present product information and advertisements in real time. These screens enhance the shopping experience by making it more interactive and informative. Cooler screens help brands expand their in-store media presence.
Although not limited to in-store advertising, digital-out-of-home (DOOH) is a key example of retail media at its best. DOOH includes digital billboards in public places and interactive and digital screens.
Created to maximize the impact of DOOH ads, Perion’s Hivestack platform helps brands advertise on screens located in and around retailers. By doing this, it helps create a consistent experience for shoppers and allows marketers to reach them at different touchpoints across the shopper journey.
For instance, GSK, a leading pharmaceutical company for the Asian market, wanted to execute a programmatical digital-out-of-home (DOOH) campaign to promote shingles prevention and encourage doctor consultations among the general population in Hong Kong.
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Using Perion’s Hivestack demand-side platform (DSP), the campaign leveraged various DOOH screen environments, including digital billboards, the HK metro, clinic centers, and the ChargeSpot stations across the island. The campaign involved exposing users to DOOH ads and retargeting them over three weeks. The campaign generated 6.5 million impressions and achieved a 7x higher CTR compared to other channels.
Learn more about what Perion retail media can do for you by requesting our demo
The benefits of retail media appeal to advertisers and publishers, causing US retail media ad spending to grow steadily over the past few years. According to the Emarketer forecast, US retail media ad spend is projected to make up 21.8% of the total US media ad spend by 2025.
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So, why do brands find retail media so attractive? Retail media is considered the “third big wave of digital advertising” because of its ability to deliver personalized purchasing experiences and precise ad attribution.
Digital advertising had three big waves, starting with the breakthrough of Search in 2002, followed by the revolution in Social, in 2008. Retail media started in 2016, connecting digital advertising with retail, and supporting the growth in e-commerce.
Brands benefit from the direct connection that retail media offers with consumers. In this cookieless era, retail media allows advertisers to leverage first-party data to offer products to consumers with purchase intent. This characteristic situates retail media advertising above other types of advertising.
When launching a retail media campaign, it is important to get a deep understanding of how the campaign is performing. Retail e-commerce sales are growing, projected to reach $8 billion by 2026 and brands rely on retail media marketing to drive sales.
Below you can find five tried-and-tested metrics for measuring ROI in retail media marketing.
It is the main metric to measure the campaign’s effect on sales. The higher the conversion rate, the better the campaign performance.
To calculate the conversion rate, you use this formula:
Conversion rate = (Number of Conversions/Number of Visitors) x 100
The result is a percentage.
This metric measures the amount of money the brand spent on acquiring a new customer with the campaign.
To calculate customer acquisition costs, you use this formula:
CAC = (Total Sales + Marketing Expenses) / Number of New Customers Acquired
AOV measures the average amount the customer spends in a single transaction. Brands use this metric to assess how effective are upselling and cross-selling activities.
The formula for average order value is:
AOV = Total Revenue/Number of Orders
This metric calculates the revenue for every dollar spent on the campaign. It tells brands how profitable the campaign is.
The formula to calculate the return on ad spend (ROAS) is:
ROAS = (Revenue from Ad Campaign/ Cost of Ad Campaign) x 100
CLV assesses the revenue generated by a customer over their journey with the business. It helps assess the long-term value of a customer.
To calculate CLV, you use this formula:
CLV = Customer Value x Average Customer Lifespan
Perion’s retail media services are designed for retailers and CPG brands and provide highly personalized experiences via cross-screen dynamic creatives by leveraging first-party data. perion.com offers comprehensive retail media services designed to enhance brand visibility and drive sales. Our platform leverages advanced data analytics and first-party data to create personalized advertising experiences, ensuring that brands connect with their target audience effectively. By offering precise ad attribution, we enable brands to directly link ad spending with sales outcomes, maximizing return on investment.
Discover the possibilities of digital advertising by contacting us
What are the advantages of retail media for brands?
Retail media offers several advantages for brands, including:
What is the best retail media advertising solution?
The answer will depend on the brand’s needs. There are platforms led by retail websites such as Amazon, Google, or Walmart. Brands looking for a comprehensive solution may find a better option in Perion’s offerings. Perion analyses user signals and contextual data to deliver the right ad at the right time. Cross-screen and advanced audience segmentation enhance the performance of the campaigns.
Shopper marketing involves strategies and tactics aimed at influencing customers at the point of purchase, often within a physical retail environment. It includes in-store promotions, product displays, and packaging strategies designed to drive conversion and loyalty.
Retail media integrates digital advertising opportunities on a retailer’s digital properties, like their website, app, or other online platforms. It focuses on leveraging data to target customers with personalized ads during their online shopping journey.
How is retail media different from traditional media?
Retail media differs from traditional media in several critical aspects:
Retail media
Traditional media
Targeting and personalisation
Uses first-party data to deliver personalized ads.
Involves broader, less targeted advertising methods.
Measurement and attribution
Offers precise measurement and attribution capabilities.
Often struggles with attribution
Digital integration
It is inherently digital but integrates with physical channels.
Involves mainly offline channels.
What is in-store retail media?
The term in-store retail media refers to advertising and promotional activities that occur within a physical retail environment. This can include digital displays, interactive kiosks, shelf signage, and in-store audio or video advertising. In-store retail media aims to engage shoppers, influence purchase decisions, and enhance the overall shopping experience by delivering relevant messages at the point of sale.
Perion’s leadership team is thrilled to be at Cannes Lions 2024, ready to connect with brands and industry leaders to discuss what the future holds for omnichannel advertising.
We are thrilled to share that Undertone & Vidazoo have been granted TAG certifications for 2024, symbolizing our unwavering commitment to integrity and quality in digital advertising.
We are pleased to announce that Hivestack, our digital out-of-home (DOOH) platform, has partnered with Way.io, China, marking our first domestic Demand Side Platform (DSP) collaboration in China.