In 2021, the world's leading top 40 FMCG companies alone collectively generated a revenue of $1 trillion. The Fast Moving Consumer Goods (FMCG) sector is a highly competitive one, with new brands competing for market share every day. This includes small businesses offering unique products and DTC brands across FMCG categories.
FMCG brands that have consistently kept pace with digital trends, made early investments in expanding their digital footprint, and built a digital-first marketing strategy have a competitive edge.
However, brands are consistently looking to leverage first-party data and engage with consumers where they are active. These needs have given rise to an emerging trend - the shift by FMCG brands from advertising on digital publications to retail media ad networks.
This shift comes with multiple advantages over generic programmatic or digital advertising with an online publication. According to a report by BCG, retail media at networks are a $100 million opportunity.
Retail Media Ad Networks Explained
Today, the top online retailers are much more than a space where consumers can purchase a wide range of FMCG products online.
Online retailers are capitalizing on the opportunity to monetize web traffic by building their own ad network within their platforms.
Brand partners can leverage the digital advertising inventory on the platform, engage with consumers, and drive traffic to their products. They can curate creative campaigns and increase brand recall among consumers in competitive markets.
Advertising inventory can include a mix of video marketing, banners, search ads, advertorials, and web interstitials.
Top Retail Media Ad Networks
In the first quarter of 2021, Amazon held 89% of the retail media advertising market share. This was followed by Walmart at 6% and Instacart at 5%.
Today, other online retailers building their retail media ad networks include Roundel, Home Depot, Wayfair, Walgreen, and CVS. Retailers with brick-and-mortar stores are offering additional value by enabling brands to advertise and engage in their physical stores.
Advantages of Retail Media Ad Networks:
Engaging in Real-Time
One of the top advantages of advertising with retail media ad networks, as opposed to online media publishers, is that partner brands get access to a captive audience with a purchasing mindset. Either they are keen to make a purchase immediately or are looking to browse with an aim to purchase some time in the future.
Online retailer platform algorithms work in such a way that relevant ads are displayed based on what consumers are already looking for, from pet products to fashion accessories.
This is different from a demand-side platform which is an interface that connects advertisers with ad exchanges and supply-side platforms and enables them to manage and optimize their programmatic ad inventory.
Access to Real-Time Data
Retail media ad networks are churning out tons of first-party data every day. This includes basic consumer data such as names, phone, emails, locations, and addresses, as well as consumer behaviors and emerging trends.
This data is highly valuable as it offers tangible insights into consumers' real-time needs, aspirations, and interests.
By advertising through retail media ad networks, FMCG brands access high-quality, relevant data for their target audiences, besides driving consumers to their products. This enables brands to bring real-time targeting to their approach based on shopper behavior.
Powering Brand Discovery
If leveraged well, retail media ad networks enable consumers to discover and experience new brands and products and engage with a brand more creatively.
FMCG brands can launch a full-blown campaign that builds consumer love and brand recall and boosts sales. Consumers can instantly make a purchase based on their experience.
Retail media ad networks, as well as FMCG brand partners, are getting more creative and innovative with the aim of enriching consumer delight and engagement and nudging them to purchase.
Strengthening the Tech Stack
Brands are looking to replicate the hassle-free operating experience delivered by demand-side platforms with their retail media ad network partners.
While investing in building an impressive and pleasing front-end experience, retailers are also investing in building a robust back-end operating interface for brands to be able to optimize their ROMI (Return on Marketing Investment). Tech plays an important role in delivering a strong operating model.
Being able to update campaigns in real-time, capture data effectively, and access analytics and reporting enables thousands of brands to respond quickly to changing consumer behavior.
Retail media ad networks must ensure that brand partners experience an easy onboarding process and continue to leverage their networks with ease.
Continuous Innovation with Ad Channels
FMCG brands are continuously looking for fresh channels to tell their story within a competitive budget, while retail media ad networks are constantly innovating and evolving to offer more value to their brand partners.
Retail media ad networks that offer a wide spectrum of channels and ease of management to mix and match, build campaigns fast, and offer newer channel options have a competitive edge.
The visual attractiveness of campaigns, as well as the ability to optimize aspects like videos, images, reviews, and other tools, play a key role in the success of campaigns.
Other Domains Building Retail Ad Networks
A segment that is also following the major online retailers in building retail media ad networks is grocery. Every online grocery retailer housing thousands of products fighting for a higher market share - from confectionary ingredients to vegetables and canned products.
Partner brands find retail media ad networks built by online grocers to be a lucrative option for commerce advertising. This trend is expected to grow in other segments, too, such as home improvement, fashion, and home furnishing.
The digital advertising scene is a fast-evolving one, especially for FMCG brands. They are consistently looking for new ways to reach and better engage with consumers.
While retail media ad networks are just about scratching the surface, FMCG brands, as well as online retailers, are fighting for the market share of consumers and advertisers. Those who offer a seamless experience, higher return on investment, and more innovation will capture the FMCG advertising market.