Insider Studios
- Retail media has become the third-largest digital marketing channel in the world.
- Three retail media experts discuss the unique advantages and challenges of this evolving market.
- The conversation was part of Insider's event, "A New Era of Retail Media," which took place on Tuesday, September 19.
- Click here to watch a recording of the full event.
Retail media exists at a dense cross section of business factors. With the right combination of first-party data on shoppers, access to exclusive inventory, and engaging ad formats, marketing strategists have grown retail media into the third-largest digital channel in the world. From digital signage and point-of-sale kiosks to ad space on ecommerce sites, retailers are in possession of the prime real estate advertisers are flocking to as social media and internet search lose their potency.
At a recent event hosted by Insider and presented by Snowflake, retail experts shared insights into how retail media is changing the advertising industry. Moderated by Lauren Johnson, senior advertising reporter at Insider, "A New Era of Retail Media" featured Kristi Argyilan, senior vice president at Albertsons Media Collective, Glen Conybeare, executive lead of retail media at IPG Media Brands, and Erin Foxworthy, industry principal of agencies and advertisers at Snowflake Inc.
The panel discussed the key benefits of using retail media channels, how brands can stay ahead of the changes rocking the advertising industry as retail media evolves, and the challenges brands are encountering in the space.
The rise of retail media
Retail media isn't new, but a series of factors in the past few years have sparked a boom in interest from marketers who see it as a fresh channel to reach target audiences. Conybeare said some of the interest could be attributed to the change in shopping habits spurred by the pandemic in 2020, in conjunction with privacy debates and cookie deprecation channels creating a tougher environment for advertisers on social media and search.
"As marketers, we — agencies and brands alike — have become hooked on accountability, on targeting, and that's going away on the open internet in a lot of cases. But within retail media, you can really pinpoint an audience quite accurately and marketers love that. And on top of that, retail media is about as close as you can get to the sale as is possible digitally, and so that level of measurement is really interesting," Conybeare said.
Argyilan added that retail media is quickly gaining in popularity because of opportunities that didn't exist in other channels previously.
"The ability to have higher fidelity, data to build higher-quality audiences, real people doing real things, and then to be able to have the measurement to show that an item moved off the shelf, there's all these different applications to retail media that are coming," she said. "And so the industry is just really taking notice because of the higher-quality data and the ability to truly do closed-loop measurement and prove that something sold."
Hyper-specific data gives retail media a unique advantage over other channels
While traditional marketing channels like TV and internet search are still at the top of list for volume, retail media is expected to gain a large share of the advertiser market in the coming months and years. The panelists agreed that advertisers are very attracted to the closer proximity to consumers and higher-quality data that retail media offers.
"There's just many different areas that don't have the richness of that data, and I think that that's the huge differentiation that retail media can bring," Foxworthy said, also noting that there are a slew of technologies needed to underpin these data streams to maximize the impact of retail media.
Argyilan said the unique opportunity for brands is the higher-quality data found in retail media. "It gives you a better lift because it takes out the margin of error in cookies," she said. "But on top of that, now we're able to live up to the accountability that every marketer is looking for to be able to show that marketing spend actually drives sales."
New content formats provide room to innovate in an evolving marketing channel
The average customer is unlikely to think about the format of the digital ads they see day-to-day. But retail media is providing advertisers with opportunities to get more creative than the standard ad banner featuring a product.
"Retail media and the place where it is right now is that we're still digital banners for the most part, price and item, there isn't a whole lot of really rich content that's being done yet, so I think that there's a lot of room there in terms of what you are referring to in terms of creating richer experiences," Argyilan said.
Argyilan mentioned that with a wider array of mediums at their disposal between online and offline (meaning real life stores) ad channels, advertisers are starting to experiment with different types of content that retailers traditionally haven't invested in before.
"Think of Pinterest content or YouTube cooking instructions, TikTok, etc. ... actually on our own properties as well as on the social platforms," she said. "Retail media networks aren't necessarily known for having big studios and to be able to pump out a lot of content. So at this point, we have to rely on the content that the advertisers bring to the relationship. That's a key component, too."
The challenges ahead lie in defining metrics
Conybeare said the brands he works with are less concerned about the types of content in retail media and more concerned with getting the best data. While he acknowledges that agencies are not "that far away from some really innovative media content," he is primarily focused on getting the metrics right.
"Where is the most effective measurement?" he said. "They can see that there is a sale, but do they know it's an incremental sale? Do they know if they move spend from retailer A to retailer B, and whether that would be a positive move or not? Those are the questions that we're trying to answer right now."
Foxworthy responded that the key to identifying more specific metrics is implementing the right technology and bringing different datasets together to provide a more detailed picture for the brand or client.
"It's not only just the technology and unification of the data, it's also what data collaboration looks like when you're following privacy regulation and consent, and you're building trust with your consumers." Foxworthy said. "There's going to be a world where first-party data is one of the key ways we transact in this industry. And so a lot of the cloud technology, where Snowflake sits, is helping a lot of these things come together."