The retail media boom started several years ago, and it’s here to stay. But how does it affect publishers’ revenue in the niche in 2023?
Back in 2021, when the global online retail media advertising revolution was yet starting off, the leading experts were getting into numerous heated discussions, on whether it could be the next big thing in the online ad industry, or just another fluke.
On the one hand, the newly-unlocked opportunities to access premium, consented first-party data, hence improving audience addressability to a colossal extent seemed like an inevitably ‘gold mine’ for brands, and consequently, retail media publishers. On the other hand, however, the entire niche apparently lacked possibilities to scale & enhance the measurement and attribution across third-party retailers, which were only stepping into the new field in their attempt to win over the share of the lucrative “retail media pie”.
The Bright Future of Retail Media Is Now, Isn’t It?
Well, now that two years have passed, it looks like the optimists were eventually right. In particular, according to eMarketer, the volume of retail media ad spend in the USA surpassed 40,000,000,000 USD in 2022. More importantly, this amount is likely to grow even further, i.e. up to 80,000,000,000 USD by 2026 (per Statista). This leaves little doubt about the huge potential that the retail ad market can unleash for digital businesses on the ad Supply side.
However, the recessive economic environment of 2023 puts additional pressure on online publishers to step up and introduce their efficient solutions to currently existing issues in the niche.
Overcoming Challenges & Tweaking Publishers’ Revenue Strategies in 2023
One of the major challenges in retail media advertising in 2023 still lies in building the publishers’ precise first-party data sets, preferably in the data clean room environment, in spite of the looming third-party cookie deprecation, – the event, which finally has the so-to-speak “death date” in the second half of 2024. This task seems even more daunting, given the necessity to ensure the compliance of newly-used ID alternatives with the ever-changing privacy regulations.
On the bright side, however, as the survey results demonstrate, online customers are ready (and willing enough) to share their Personal Data elements with a publisher, in case this allows receiving both the personalized editorial content, and the ad messages, highly tailored to their needs and preferences.
Pro tip! A potentially efficient strategy for retail media publishers is their transparent communication with their customers, regarding the processing and use of their Personal Data, as well as the rigorous check of their video ad server tech vendor, in order to ensure precise ad targeting and careful brand safety checks on each of the integrated ad placements.
Another pressing point is publishers’ need to do their part in making sure the integrated paid media assets brings maximum conversion results, or simply put, digital and offline sales, in view of the tightened brands’ budgets and the continuously growing competition on the market.
Pro tip! Quite predictably, the primary advice for retail media publishers is to explore and experiment with available ad formats, including the InPage and InBanner video ads, which tend to generate more audience engagement, without taking a toll on users’ experience with the main website content. Another practical recommendation is to test out the integration of Sticky video ad units (e.g. Flexible Sticky, which implies the video player remains in its Sticky mode only during the display of advertising creatives, then closes upon their completion).
Perspectives for 2024
With Q3 & Q4 2023 still ahead of us, the future of retail media advertising remains just as bright, in spite of some visible clouds on the horizon.
As for the key prerequisites of its further evolution, according to expert speakers at OMR Festival 2023, these include building and improving the “coveted” omnichannel experience, while also closing the measurement loop with connected attribution.