The ‘big four’ – Google, Facebook, Amazon and Apple – have long been synonymous with digital advertising for most brands and agencies. One simply didn’t exist without the other.

But costs inside the walled gardens are rising. According to Criteo’s latest research report – ‘Future of Commerce – The Rise of Retail Media on the Open Web’ – senior media agency professionals in the UK reported a 27% rise in their cost per sale through these channels in just one year.1

According to both media agency professionals and their marketer counterparts, audiences on these platforms are becoming harder to understand. It’s a problem compounded by sweeping changes in online privacy and the future of addressable advertising.

But what can marketers do? The most common solution is to increase expenditure – and investment in ‘walled gardens’ such as Facebook and Apple has increased 29% year-on-year – but investing more for diminishing returns is not a long-term solution. Retail media has entered the scene as a much more viable alternative, and it’s quickly becoming a vital element in every marketer’s strategy.

Beyond the wall

Among the key advantages retail media offers marketers is the ability to blend product ads natively with other product listings at the point of sale. More than half of respondents reported this as a distinct advantage over other walled garden campaigns, along with sharper audience targeting (51%), relevance to the actual purchase (58%), and even sales growth (53%).

Retail media’s accomplishments in these areas come from its use of first-party data to drive relevancy. With audience insights drawn from a retailer’s first-party data, retail media can immediately scale advertising campaigns, identifying in-market, new shoppers for advertisers. Advertising on retail sites is also inherently a brand-safe environment, relying on long-established, trusted retailer domains.

Furthermore, the booming advertising businesses of retailers like Boots, Asos and AO demonstrate that advertising and a positive customer experience are by no means mutually exclusive. With brands queuing up to pay for eyeballs, retailers can serve more advertising content by showing relevant products that enhance the shopper experience.

Picking up speed  

With ecommerce on the rise and big ad industry changes on the horizon, marketers need help building, scaling, and activating first-party audiences and media owners need more ways to add value to their inventory and create addressability.

Retail media is a future proof proposition that already has many marketers allocating more budget to the category than just one year ago. In fact, around half of the study’s agency respondents expressed too few retailers currently offer brands mature advertising environments, highlighting the desire to diversify spend across these partners in the immediate future.

To learn about how and why retail media is growing in popularity and what your brand can do to make the most of this moment of change, read our Future of Commerce – The Rise of Retail Media on the Open Web report. 

1‘Future of Commerce’ report commissioned by Criteo, February 2022.

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