The Explosive Growth of Retail Media in the Open Web Advertising Landscape
The dominance of the ‘big four’ – Google, Facebook, Amazon, and Apple – in the realm of digital advertising has been a long-standing norm for brands and agencies.
However, the escalating costs within these closed ecosystems are prompting a shift in strategy, as highlighted in Criteo’s recent research report titled ‘Future of Commerce – The Rise of Retail Media on the Open Web.’
Rising Costs within Walled Gardens:
Criteo’s report reveals a substantial 27% increase in the cost per sale reported by senior media agency professionals in the UK within the ‘big four’ platforms in just one year. This surge in expenses raises concerns about the sustainability of relying solely on these closed environments for advertising efforts.
Challenges within Closed Platforms:
Media agency professionals and marketers alike are grappling with challenges related to understanding audiences within these closed platforms. The complexity is further compounded by evolving online privacy regulations and the uncertain landscape of addressable advertising.
The Quest for Solutions:
To address these challenges, many marketers are resorting to increased expenditure within the existing ‘walled gardens,’ with a 29% year-on-year rise in investment in platforms like Facebook and Apple. However, the efficacy of such an approach is questionable, leading marketers to seek alternative solutions.
Retail Media as a Viable Alternative:
Enter retail media – a rapidly emerging alternative that is swiftly becoming a crucial component of every marketer’s strategy. Retail Media empowers brands, agencies, and retailers to work better together to sell more products. The use of first-party data sets retail media apart, allowing for seamless integration of product ads with other listings at the point of sale. Surveyed professionals highlighted distinct advantages, including sharper audience targeting (51%), relevance to the purchase (58%), and sales growth (53%).
Key Advantages of Retail Media:
Retail media’s success lies in leveraging first-party data to enhance relevancy, enabling immediate scaling of advertising campaigns to identify in-market, new shoppers. The inherently brand-safe environment of advertising on retail sites, associated with established and trusted retailer domains, further strengthens its appeal. Additionally, the ability to blend product ads seamlessly with other listings enhances the overall shopping experience.
The Momentum of Retail Media:
With e-commerce on an upward trajectory and imminent changes in the advertising industry, retail media and retail media networks are positioned as a future-proof proposition. Marketers are increasingly allocating more budget to this category, with around half of the surveyed agency respondents expressing a desire to diversify spend across retail media partners in the immediate future.
As the costs within closed ecosystems continue to rise, and the challenges of audience understanding persist, retail media emerges as a compelling alternative for marketers seeking effective and sustainable advertising solutions in the dynamic landscape of the open web.
Contact Us
VUKA is the trusted media partner to key professionals, policy makers, suppliers and
manufacturers. We provide unparalleled opportunities for industry-wide connection.
