The advertising industry has been buzzing about retail media over the last few years with everyone wanting to get in on the action. eMarketer predicts that by 2027, 1-in-5 digital media dollars will be driven by retail media. As the industry has become more invested in its evolution, retail media will continue its growth, especially when it comes to streaming, where ad spend is expected to double by 2027. Furthermore, retail media is expected to make up 26% of all streaming spend by 2028. But, what is needed to get to that point?
At FreeWheel’s recent Premium Programmatic Summit, leaders from Comcast Advertising, Albertsons Media Collective, and Paramount discussed the current state of retail media and what is needed to further expand this medium and capabilities for advertisers looking to tap into what it can offer when it comes to streaming.
The Rapid Growth of Digital Retail Media
While retail media has always existed in one form or another, it has evolved rapidly in the past decade. What initially started as primarily owned and operated by retailers, meaning brands were advertising on-site (online and in-store) when consumers were at the point of purchase. In bringing this to digital, the possibilities of retail media have expanded exponentially. Retailers and brands can now serve up relevant ads while a consumer is searching online for a specific item, reaching them at almost exactly the right time with the right message, helping the chances of a sale.
These tactics, while effective, are focused more on lower-funnel marketing objectives, not overall brand building or awareness. Retailers, and therefore retail media networks, are sitting on a treasure trove of audience data that allows them to understand consumer behavior and intent. While powerful audience data that brands can tap into is the heart of the retail media story, there is so much more opportunity for advertisers when we think about how they can pair that data with upper funnel reach vehicles like streaming.
Streaming’s Potential for Retail Media
Bringing Sight, Sound, and Motion with Precision
There is huge value when it comes to bringing retail media to streaming; it allows brands to leverage the rich retail data and marry the engaging ad elements of TV – sight, sound, and motion – with the advanced targeting techniques of digital. While retailers have always leaned on traditional TV for awareness and mass reach, it lacks precision and performance measurement. The advantage of streaming is that it works in a digital like fashion with precise targeting and measurement capabilities.
But, while retail media has exploded, it is still relatively in its early days as it relates to video. On the retailer side, because the majority come from the search and display world, there has been seemingly slower movement into streaming. Karen Babcock, VP, Strategy & Partnerships, Comcast Advertising, pointed out that a likely reason for this is because, until recently, many retail media networks didn’t have their data organized in a way that streaming could access, and streaming wasn’t as programmatically enabled to take advantage of that data.
Continuing to test and learn when it comes to streaming and retail media will allow us to build products that meet advertisers’ needs. As Xenia Kirilyuk, Senior Product Manager, Albertsons Media Collective said, streaming is an extremely powerful tool that can help fuel retail media’s growth and paves the path to allow advertisers to tell richer stories to consumers and really engage them. By creating easier and more seamless streaming buying experiences for advertisers, we can bring consumers relevant and engaging shopping experiences that are data-driven.
Standardization and Education Are Still Needed
There are two main things to be done to achieve the full potential of retail media and streaming: education and standardization.
On the education side, it will be important to bridge the differences between digital and video and the nuances of buying streaming. This can include pricing, as premium video with the additional engagement factors of full sight, sound, and motion will be priced higher than a traditional display or digital unit.
When it comes to standardization, it will be critical for the industry to develop guidelines for measurement. In fact, new research from the ANA found that 55% of advertisers say the biggest challenge associated with retail media networks is lack of standardization across platforms. Retail media is merchandising, and advertisers need a way to gauge impact and consumer intent and do so in a way that offers consistent methods across platforms.
In doing both of these, the industry will make streaming and video easier to understand so that advertisers can feel more confident in the buying process. By ensuring clients and buyers fully understand how every single one of their ad dollars is working, they can gain the confidence to test and invest in streaming for retail media.
Looking Ahead
Partnership Is the Key to Success for Retail and Streaming
There is still so much opportunity for growth, and much of this is being driven by the partnerships between streaming providers and retailers that are happening across the industry, opening up new, innovative ways for brands to reach consumers. These partnerships make it easier than ever for brands to tap into the full potential of retail media, and we need to ensure they understand how to access the variety of partnerships out there that make sense for their individual ad strategies.
By meeting advertisers where they are in this process, we can help reinvent video for retail and make sure it’s an accessible and powerful solution for buyers looking to engage audiences with relevant experiences.
To hear more on retail media and streaming from industry experts, visit here.
