In 2021, retail media took the marketing and advertising world by storm – eMarketer’s latest forecast predicts advertising spend will reach over $50 Billion by 2023 – and will continue to be a source of innovation and growth for years to come. As we look to the future, we asked our team of retail media experts what their top predictions were for retail media in 2022
At this point in retail media’s evolution, static sponsored product and sponsored search ad placements are table stakes. As more retail media networks emerge, we’re going to see mounting competition to unlock full-funnel brand advertising budgets. Not only will retailers need to prove they can deliver a positive ROI with clear access to customer data, but they’ll need to deliver it in more innovative and engaging advertising formats to resonate with consumers.
This is where video comes in. Video advertising is a win-win-win for retailers, brands and consumers, and in this scenario, we all win (name the reference). Video ads help retailers and brands by compressing the purchase funnel and combining awareness with product education and inspiration, followed by a clear path to purchase the featured item. Video ads also create a better experience for shoppers – 73% of consumers prefer watching a video to reading about a product, and 88% of people want to more videos from brands in 2022.
Retail media video advertising won’t be limited to sponsored video ads that replace static posts. Major retailers, including Walmart, Amazon and Albertsons, have already adopted a live commerce strategy. Expect to see many other retailers embrace the format, too.
Gone are the days of retailers working with one retail media network partner. There is going to be a shift from retailers working with a single supply-side platform to integrating with any number of retail media networks, solution providers and/or retail DSPs (demand-side platforms) to fully maximize the demand for their retail ad inventory and customer access.
Target has already demonstrated this by bringing in demand for their Target Product Ads through both Criteo and Citrus. Expanding these partner relationships will also make it simpler for retailers to venture into new ad formats, like video, in-app advertising, or CTV. But more partnerships mean that retailers will need a solution to better mediate all sources of demand to maximize their desired KPIs and maintain control and full transparency for their business.
This is identical to what has happened in ad tech over the last 10 years. As the programmatic advertising industry became increasingly complex, ad mediation emerged as a hugely beneficial option for publishers. Mediation provided publishers with the ability to seamlessly connect multiple ad networks and allow them to maximize fill rates and increase revenue.
Most consumers aren’t discovering new products on a retailer’s e-commerce site. In a recent study with InMobi Pulse, we found that only 15% of consumers ranked a retailer’s website as their top method of finding new products. Shoppers instead discover new products through social media platforms, influencer recommendations, video content and other more interactive platforms. And the shopper’s ability to quickly compare pricing, shipping speed and availability across multiple retailers has created enormous pressure on retailers’ e-commerce margins and profits.
In addition to discovering new products primarily off a retailer’s site, more shoppers are also completing their purchase through social channels pushing retailers to become glorified fulfillment services and costing them control over the customer experience and customer data.
Retailers are realizing that they need to do more to ensure that their on-site experience more closely aligns with shoppers' preferred online discovery platforms. Retailers will need to create an e-commerce experience that does more than drive sales — they need to bring awareness, inspiration and education too. Retailers, like Amazon, Walmart and Macy’s are doing this by collaborating with influencers on product lines or curated item collections, incorporating live streaming and video into the on-site experience and enhancing discovery with personalized product recommendations. These upgrades to a customer’s online experience are just as monetizable as a sponsored product ad, but massively upgrade what retail media can offer.
Looking to grow the scale and reach of their media networks, retailers will need to venture into off-site media. Many retailers extending their audiences to social or to web banners are missing a huge opportunity to connect with shoppers where they are consuming content — within mobile apps.
Americans spent an average of 4.1 hours a day on mobile devices last year, more time than they spent watching TV (3.1 hours a day), and brands are taking notice. eMarketer estimates that 70% of CPG digital advertising budgets will be dedicated to mobile.
Retailers’ access to first-party data and the ability to tie ad exposure to actual purchases make their audiences extremely valuable to advertisers who are increasingly worried about addressability and proving ROI.
Retailers have long focused on getting funds from the top 10-20% of brands, but they are missing out on a huge pocket of collective revenue. Over the next year, emerging brands will shine alongside the big players in retail media.
Marketers, particularly shopper marketers, are drawn to retail media because of the access to valuable, first-party consumer data. They can target the consumers most likely to purchase their product at the point they are actively browsing a retailer’s site intent on making a purchase, and (with the right retail media partner) they can tie that purchase to media exposure.
To capture budgets from smaller brands with leaner teams and resources, retailers will have to develop solutions like self-serve ad platforms and allow brands to optimize their media for revenue goals instead of clicks or impressions. All marketers want their media spends to make an impact on revenue, but often brands with smaller budgets must prove their spends are moving the needle to unlock more funds.
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