The last two years saw an unprecedented growth (over 50% both years) in retail media ad networks, both in numbers and revenues. The accelerated growth was driven by the changing advertising landscape, evolving consumer journeys, and an exponential adoption of online commerce.
Given the momentum, 2022 will see more retailers and eCommerce players joining the party. eMarketer has pegged the growth of retail media revenue at 31% and estimates that by 2023, marketers may spend as much as 20% of their digital advertising budgets on retail networks.
Next year will also push retailers and eCommerce players towards innovations in the ecosystem to better equip the advertisers to succeed on their platforms.
Here is what we (and industry experts) think will be the significant changes and trends to watch out for in 2022 -
Shift from Performance to Branding
Branding budgets come with lower liability than performance (or action-led campaigns) budgets, so they are most sought after in the advertising industry. 2022 can see marketer dollars moving up the funnel from product search ads to branding and discovery campaigns. With more ad types (display, video, carousel, & CTV) joining the retailers’' arsenal, marketers will eventually see value in brand ads to cover the entire consumer buying journey on the retailers' platform.
Better Attribution & Measurement
Retailers (with offline presence) invest in technologies that improve offline attribution, which has been a significant bottleneck. In a recent move, Walmart partnered with The Trade Desk to give marketers visibility into the impact of digital exposure on in-store sales, thus completing the online-offline loop. This move will also encourage other retailers to build on their technology stack.
ConnectedTV to enhance retail media capabilities
The inclusion of CTV inventories in the retail media ecosystem will boost advertisers' confidence in success with retail media. This will accelerate the influx of brand budgets into the ecosystem driven by closed-loop attribution. The CTV players are open to monetizing their inventories, and plugging them with retailers' first-party data will be the icing on the cake.
The space sees some meaningful partnerships like Amazon's exclusive broadcast rights for NFL Thursday Night Football, Walmart's recent tie-up with The Trade Desk, and Kroger and Shopify partnering with Roku.
Retailers’ first-party data will continue to be in demand
While in 2020, CPG brands were looking to "build stronger partnerships with the retailer," this year, most CPG marketers were keen to "gain access to retailers' first-party data". 2020 wouldn't be any different from this year, and the retiring 3rd party cookies will only make the first-party data indispensable.
The retailers who have not yet aggregated and segmented their customer data need to hurry up and make these segments dynamic and easily accessible for targeting.
Ease of Usage & innovation in features will be paramount
In a study conducted by Merkle as reported in eMarketer, compared to 38% in 2020, 61% of Marketers believe "ease to work with "the retail media networks is the top feature they wanted this year, followed by "innovation in ad solutions" and "managed services options." All three add to the ease of buying media on the retailers' platforms.
Consolidation of retail media networks
Retailers will consolidate their capabilities to create a more robust media ecosystem. In an article published on adexchanger, experts predict that retailers will work with more supply-side and even demand-side partners to fully maximize the demand for their retail ad inventory and customer access.
This will help retailers create more revenue streams through multiple partners specializing in different ad formats and target accounts.
Video to evolve further
Inspired by social media commerce which relies heavily on videos (think Instagram), major retailers partner with technology providers to launch their video commerce capabilities. Walmart tested out a live stream video commerce event with TV personality Rachael Ray to promote their line of dog food and other products. Walmart has seen some excellent results from similar events in the past. Along the same lines, the grocery retailer Albertsons launched shoppable cooking videos live-streamed on its website. The feature will eventually allow brands to stream their videos, thus monetizing the inventory for the retailer.
Amazon had recently increased their pricing for holiday ad packages created for Amazon-produced videos (Livestream ads from) $35k to $85k. This shows how much Amazon is betting on these ad formats, ensuring more than just clicks and impressions to Brands. These ad types also enable advertisers to build their following, generate first-party data and create brand awareness like never before.
In essence, retail media ad networks are at a crucial stage and are set to blow away advertisers with the ecosystem's capabilities.
Whatever has happened in the last two years might be the tip of the iceberg, and the landscape is evolving into something massive.