By Yves-Michel Gabay, managing director, Gamned! MEA
Retail media has been an experimental playground for a while, and this year it evolved into a strategic advertising channel for most brands. In the first quarter of 2022, the spend on digital retail media advertising in the United States was 44 per cent higher when compared with last year. At a global level, this spend has increased by 38 per cent during the same period, states a study by Statista.
The MENA region currently lacks a strong ecosystem and hence the figures are lower here. However, with the extent of innovation we see here, we have no doubts that retail media will turn into a source of growth for the advertising market.
Retail media works as a great ally for brand awareness and optimised sales for advertisers such as retailers. It equips them with a new lever to monetise their most essential data, transactional data. Retail media is a constant source of innovation. However, it can be challenging to understand and implement formats and methodologies.
Understand the primary potential of retail media
The world is at a pragmatic turning point in advertising, and retail media clearly offers a lot of potential. As a method of targeted advertising that focuses directly on the consumer’s purchasing path, retail media campaigns have two intentions:
For the brand: To work on powerful brand awareness and brand image throughout the consumer journey and boost sales by capitalising on the available ultra-captive transactional data.
For the retailer: To benefit from a significant additional revenue source, thanks to audience- and customer-data monetisation.
Retail media is not a new concept if you consider point of sale (POS) tools or promotional highlights at a physical store. The field of retail media is now expanding into digital. Online retail media allows brands to mark their presence throughout the acquisition funnel including internet users’ first searches – thanks to digital advertisements in search and programmatic advertising. The relevance of retail media is amplified by the multitude of choices available throughout the conversion path and activation levers. However, developing the strategies can turn into a complex task.
Figure out the other benefits
The primary purpose of a retail media strategy is to maximise the performance of a brand’s digital campaign by effectively associating with the retailer’s assets. Owned media – including advertising efforts on e-commerce, social networks, newsletters and every other means of communication that belongs to the retailer – is essential and profitable for retailers.
It is strongly recommended to improve the effectiveness of this strategy by adding paid media that includes retargeting, display and video, search engine advertising (SEA), social media, etc. and capitalising on consumer data monetisation via an audience extension. This enables a brand to go beyond its limitations and intervene at any desired stage of the conversion funnel. Finally, consumer data can also benefit brands that want to understand customer behaviour better or measure a campaign’s impact. At present, these surveys and learnings are essential for advertisers, and retailers must find ways to analyse and monetise their consumers data. Retail media providers that power the future cannot afford to ignore this additional measurement and understanding element.
Build or outsource
Retailers have two options: they can either internalise the skills and technologies required to implement a retail media strategy or build an external partnership. The former seems to be the most adopted solution currently. The solution makes sense for distribution giants with the financial means and a sufficient volume of potential advertisers to make this approach justifiable and profitable in the short term. This internalisation ultimately means creating an advertising sales house and can even go as far as setting up a self-served platform for brands and agencies. For instance, retail media platform CitrusAd and Majid Al Futtaim (MAF) have come together to enable Carrefour franchisees to provide brands and suppliers with insights and relevant first-party data. However, in 2022, outsourcing appears to be more popular. While outsourcing, we encourage retailers to choose partners based on their expertise, ability to segment and activate data, work across different web environments and innovate with customised or optimised creative technologies. Retail media is a dynamic and evolving industry, but it is still at a nascent stage in this part of the world.
What does the future look like in the region?
Consider the recent MAF announcement and also how retail media is taking off in the US and Europe. Regional retailers are beginning to understand the value they can extract from customer data that they hold exclusively and will monetise it soon. They will partner with data management platform (DMP) suppliers, demand-side platforms (DSPs) and trading desks to put in place self-served platforms which are easier to scale-up. They can also push tried-and-tested live-shopping technologies and add to these the social segment the retail media currently lacks.