What Advertisers Really Want from Retail Media: Five Key Insights
In today's competitive retail landscape, more retailers are recognizing the potential of retail media to drive revenue and enhance the shopping experience. Whether you're considering starting a retail media business or aiming to scale your existing one, it's crucial to understand that success in this field hinges on providing your advertisers with transparent, meaningful, and actionable insights.
For example, a pure-player retailer/marketplace offering a solution such as Sponsored Products to its advertisers (Vendors and Sellers alike) will generally report on campaign-specific metrics such as number of impressions, click-through-rate, return on ad spend.
These metrics are relevant and important, but our belief is that what advertisers actually want are actionable insights and nudges that merge these campaign-specific metrics with other retail data sources so that it can provide them with value-driving advice, such as:
- “We predict you can generate x% more product sales if you lower the price of your product with y%, increasing your Return on Ad Spend to z%”
Advertisers deserve to know whether their investments are driving value, and retailers have an obligation to help them become smarter and more effective.
Here are five key insights to guide you on this journey:
1. Laying the data foundation
In the world of retail media, data is the lifeblood of success. To provide meaningful insights, you must collect and analyse data from various sources, both existing ones (e.g. in-store transactions, online behavior, and customer demographics) as well as new ones (e.g. advertising/retail media data from different (and often external) ad tech solutions).
In our experience, the ‘boring’ work of building a solid data infrastructure is a prerequisite for impactful analytics and insights, something that is often overlooked. Retail Media teams who address this challenge head on, and who are willing and able to invest in laying a solid data foundation, create a competitive advantage that will distinguish themselves from the competition.
2. Attribution modeling
One of the biggest challenges for retailers is showing advertisers the real impact of their advertising efforts.
Attribution modeling is the key to this puzzle. By using sophisticated attribution models, which ideally integrates metrics from different retail media solutions (e.g. Sponsored Products, Display Advertising, etc.) and other customer journey touchpoints (both within and outside of the retailer’s realm), retailers can help advertisers understand how each touchpoint in the customer journey contributes to conversions.
This insight empowers advertisers to optimize their campaigns and allocate their budgets effectively. Retailers who can offer detailed attribution reporting will stand out in the marketplace and gain the trust of their advertisers.
3. Providing user-friendly dashboards
Transparency is not just about providing raw data; it's about presenting it in a way that's easily comprehensible and actionable. Retailers should invest in building customised dashboards that cater to the specific needs of their advertisers. These dashboards should showcase the metrics that matter most to the advertisers, such as return on ad spend (ROAS), click-through rates, and conversion rates.
Accessibility is key: user-friendly interfaces and interactive features can make these dashboards more engaging and valuable to advertisers.
4. Building a strong data capability
It’s crucial to Invest in robust data infrastructure, either in-house or through external partnerships, to collect, process, and analyse data effectively.
In our experience, in the early phases, retail media business tend to put more emphasis on building/selling advertising solutions than investing in ‘overhead’ roles such as data scientists and engineers.
Our advice is to adopt a future-looking mindset and invest in these roles early on to avoid later regret: building a strong data capability enhances your ability to deliver reliable, actionable insights to advertisers, establishing your trustworthiness and expertise in the retail media space.
5. Continuous improvement and collaboration
The retail media business is dynamic, with constantly changing consumer trends and advertising technologies. Retailers should foster a culture of continuous improvement by keeping their advertising strategies and insights up to date. Regularly sharing updates and insights with advertisers and collaborating on new ideas and approaches will not only build trust but also ensure mutual success. Open and proactive communication is the cornerstone of a successful retail media partnership.
In conclusion, for retailers looking to excel in the retail media landscape, the provision of transparent, meaningful, and actionable insights to advertisers is paramount.
- Laying a solid data foundation
- Adopting advanced attribution models
- Providing user-friendly dashboards
- Building a strong data capability, and
- Fostering collaboration
…retailers can differentiate themselves in the market and help their advertisers achieve better results.
In this mutually beneficial relationship, advertisers gain the knowledge they need to make informed decisions, while retailers grow their retail media business and contribute to the success of their advertising partners.
If you’d like to discuss this further or learn more about how ExploreAI can support your growing retail media business, contact Arjen Heida today at email@example.com for a free consultation.