By any standards, the market for retail media advertising has grown incredibly quickly, says Alexia Nakad, VP Brands, UK and MEA at LiveRamp.

The first-party data amassed by retailers through their long-standing loyalty programmes and sales information has become extremely valuable for brands looking to understand and target their customers more effectively and efficiently.

Retail media can work well for all the parties involved. Retailers benefit from additional revenue; brands gain access to digital and physical point-of-sale ad inventory, insights and closed-loop measurement capabilities that would otherwise be beyond their reach. Additionally, customers benefit from campaigns and offers that are more aligned with their preferences. Most of the world’s largest retailers have now established their own media networks to capitalise on the opportunity, with the UK presenting a particularly lucrative market. 

Beyond ROAS to full-funnel marketing performance

Retail media is a rapidly evolving space, and many brands are still refining their strategies. However, to date, retail media has often been seen as a tool for driving ‘bottom-of-the-funnel’ outcomes.

This is mainly because retail media provides advertisers with an opportunity to reach consumers while they are in ‘buying mode’ and located in a retail environment, be it in-store or digital. This, combined with the closed-loop measurement that retail media network (RMN) operators can provide, has led to retail media being viewed primarily as a performance media tool, i.e. one designed to help drive immediate, measurable return on ad spend (ROAS). 

At a time when marketing budgets are under increasing pressure to deliver ROAS, this is understandable. However, it is equally important for marketers to recognise that the opportunity is broader and there is real potential of retail media to drive performance across the whole funnel. Indeed, retail media can support much more strategic business goals, such as brand awareness, customer loyalty and planning, which all drive valuable outcomes and longer-term value for marketers.

Successfully leveraging retail media as a full-funnel channel, however, can require marketers to overcome several challenges.

Shifting focus to extract real value from RMNs

Brands eager to extract real value from retail media should look beyond ROAS considerations.

While ‘conversion’ will remain an essential metric for brands, they should also broaden their focus to include a wider set of KPIs, such as brand uplift, customer sentiment and salience that can additionally influence business outcomes, such as customer lifetime value, category market share and repeat purchases. These metrics help provide a more cohesive story around brand and business outcomes.

Evolving your brands’ strategy towards retail media presents a valuable opportunity to enhance both structural alignment and operational efficiency. Often, the teams responsible for allocating and monitoring brand marketing budgets and retail media budgets are at arm’s length from each other and operating across multiple complex media networks.

By fostering closer collaboration and creating streamlined processes across retail media networks, brands can unlock greater impact.

Collaboration for long-lasting success

Brands exploring the power of retail media need to consider the full range of insights available from the data made available to them.

A key solution underpinning these brand interactions with RMNs is data clean room technology, which enables data collaboration within the clean room to draw insights, activate and measure marketing spend aligned to top-line business outcomes.

Currently. many brands and retailers collaborate on insights through traditional trade marketing agreements, however, with the rise of RMNs and the enablement opportunities through technology, such as data clean-rooms, they now possess the ability to enhance these insight initiatives.

Data collaboration helps facilitate the evolution of partnerships between brands and retailers, including smarter media and audience planning with access to more data powered through clean-rooms as well as greater agility with data updated more frequently, driving faster, better decisions.

While access to more data is highly compelling for many brands, it is important to recognise that retailers are partners and ensuring long-term strategic alignment and trust is core to ensuring mutual success.

Therefore, achieving successful full-funnel commerce media outcomes requires clear objectives, a test-and-learn approach and a partnership mindset to help evolve and refine the strategy.

Understanding the customer journey

Modern marketers should shift their focus towards collaboration and partnerships with RMN, seeking out alliances with those capable of providing robust datasets to inform and underpin their campaigns.

This strategic shift is a direct response to the evolving challenges marketers face in understanding the entire customer journey. Partnerships have become crucial as they empower brands with transparent full-funnel metrics and foster a culture of data-driven planning and decision-making.

By embracing this collaborative approach, marketers can uncover new ways to enhance their insight into the customer experience and set the stage for long-term success through investment in retail media. As we embrace a new era of data responsibility, data partnerships stand as the bridge to a brighter and more collaborative future for both brands and retailers alike.