A new trend in advertising is set to rewrite the rule books in 2025. Will you ride this wave – and, more importantly, should you?

We’re talking about the revolutionary changes in Retail Media Networks (RMN). An RMN allows third-party companies to buy ads on that retailer’s normal advertising channels, channels that previously were used only for the retailer itself. The granddaddy of RMNs is Amazon, which evolved from being a mammoth retailer of everything from books to bicycles to building materials to making hundreds of millions of dollars by allowing third-party advertisers on their site.

So, what’s changing? Hundreds of large bricks-and-mortar retailers are jumping in the RMN pool, launching a new generation of RMN strategy. By definition, bricks-and-mortar retail chains have a ton of physical real estate where shoppers spend time and money:

  • Shelves
  • Checkout terminals
  • TV screens on the walls
  • Surround-sound speaker systems
  • Gas pump screens
  • Demonstration areas
  • Parking lots
  • In-store displays
  • Open-floor aisles

Over the past 10 years, these retailers also have developed robust websites to sell products directly to consumers, in lieu of in-store visits. 

By opening up both channels to other companies – even service providers – these retailers have realized an enormous new revenue stream. By integrating online advertising with in-store consumer behavior, this multi-channel arena and the technology to integrate data in real time has opened a new world of opportunity for all companies looking for smarter ways to reach and convert customers. Consider:

  • What if you could run ads to customers’ smartphones during/after their visit, with products or services related to their purchases?
  • What if you could get products featured on big retailers’ websites, building brand recognition before customers enter the store? 
  • What if a customer who saw your ad on their smartphone heard a corresponding promo for your product as they walk down the aisle where you product is shelved?
  • What if you could market to customers across multiple channels, measure the campaign’s effectiveness, and adapt your strategy to optimize ROI? 

Retail media networks make all these scenarios not just possible, but practical.

Taking Advantage of a Mountain of Data

Big box retailers sit atop vast mountains of data their customers freely give them – “clues” about tastes, purchasing habits, and shopping methods. Who can estimate the value of real-time insight and adaptive messaging, while customers freely exchange personal information and transact sales on smartphone technology?

Imagine a customer who logs into Lowes.com a few weeks before the 4th of July, to see if the local store carries a particular brand of grass seed. Instead of buying the seed from the website, they visit the store four days later. While shopping, they also buy hedge trimmers, heavy-duty garbage bags, and tools for pulling weeds. It’s obvious: this customer plans to improve their lawn, likely so that they can entertain guests on the holiday.

RMNs offer the chance for other companies – perhaps a landscape design firm, or a fence builder – to advertise on Lowe’s RMN, reaching their ideal customers at the ideal time.

Tech giants like Facebook, Amazon and Google have leveraged customer data for years, and most digital marketers have used these platforms to market their products and services. But this new breed of RMNs offers distinct advantages:

  1. RMNs provide in-person marketing opportunities no digital platform can, such as in-store demos and sampling.
  2. RMNs offer a targeted customer base, closely aligned with your product or service
  3. RMNs offer greater transparency than big tech companies. The tech giants typically hide their data from advertisers, making it difficult for small merchants to study consumer behavior. But retailers usually share behavioral data with advertisers, so they can optimize their campaigns and duplicate results in other related channels.

For instance, a landscaping company could advertise according to the behavior of Lowe’s customers, and then attempt to duplicate or simulate it with Home Depot customers. If you know that Lowe’s and Home Depot customers shop with similar habits and timelines, you can calculate the optimal time to run ads, and decide which ads to send them. 

Here’s another advantage: buying ads on a retail media network can be like an “audition” to get your product placed in the store. If it performs well on Walmart.com, for example, you have a better chance of getting your product on a Walmart store shelf.

Then, there are the ethical implications of leveraging data. The tech giants are often in hot water over what they do with their data. Facebook came under fire a few years ago for selling customer data to third parties, particularly because users didn’t always understand the risks of sharing personal information on a social platform. 

Retail media networks are more transaction-oriented. Even if a customer is “just looking,” consent is clear-cut when a buyer engages directly with a seller. With RMNs, you can reach your target audience with more socially acceptable forms of leveraged data.

How to Seize the Moment with Retail Media Networks

If you decide to look closer at a particular RMN, determine if your target customers genuinely shop there for products that “tie in” with your business. For example, if you sell insurance, you can probably run ads to customers as they interact with franchise retail “power partners:” financial advisors, mortgage brokers, and auto dealerships. While the per-ad cost might be higher, the ROI will likely be better than running ads to the general public while they shop at Kroger, CVS, or Sam’s Club.

Second, offer a product in context. Just because a customer shops at Costco, for example, doesn’t mean they’re interested in ads from a pressure washing company. On the other hand, if Costco has a subset of customers who consistently buy goods to maintain their home’s exterior … RMN technology might enable you to target those Costco shoppers specifically. If not, it might be better to target customers through Lowe’s and Home Depot’s RMNs, where there’s zero doubt that customers rent pressure washers and purchase related items.

Unless you’re a digital marketing expert or have a dedicated team, we recommend managed services from the retailer. While the cost will be higher and the flexibility lower, you will still get optimal results by leaving the nuts and bolts of running ads to professionals, if you are not experienced in this area.

Finally, don’t put all your eggs in one basket with retail media networks. Your target customers will still buy directly from manufacturers and other sources. You should purchase RMN ads as one part of your overall marketing strategy. If other, traditional forms of advertising work for your business … by all means, keep doing them.

Tarkenton pays close attention to the latest trends in business and technology, with an eye for how our partner companies can leverage results for profitable growth. If your business could benefit from the retail media network wave, contact us to schedule a complimentary, no-obligation consultation.

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There’s one thing that any business needs to really be a business: a customer! There has to be someone who is willing to pay you money in exchange for your product or service. And they can’t do that unless they know about you. That’s where marketing comes in.

I’ve been in and around the world of marketing my whole professional life. I worked at an ad agency during an offseason; I started a company to sell ads on airline ticket jackets; and of course I’ve needed to know how to market all the products and services from my own companies.

One fundamental of marketing is to go where your customer already is. What’s great about this article from our Paid Media Director is that it shows how companies are still finding innovative ways to do just that. Don’t miss out on these opportunities!

 

 

Fran Tarkenton