It’s simple isn’t it, brands just want a tangible return from their retail media investment? Of course, return on ad spend and total sales are critical and a key driver for brands investing more budget in their retail media strategy. But it’s more than this. Brands are also prioritising the quality of the retail media network offering and its performance in deciding where to put their retail media spend, according to the findings of a recently launched Epsilon/CitrusAd retail media study of brands and retailers.
The survey, titled ‘The State of Retail Media’, explored the thoughts and attitudes of hundreds of brands and retailers worldwide to find out what brands and retailers can learn from each other.
One key finding from the survey: Brands want a real return on their retail media investment, one that they can see and trust. Reach is important, but in itself it doesn’t provide the transactional evidence brands want, such as total sales and return on ad spend – brands’ top metrics according to the report. Nearly half of the 218 brands surveyed said total sales was one of the most important metrics when measuring the success of their retail media campaigns. The same number said determining the return on their ad spend was crucial. Total reach was ranked third, followed by purchase intent impact and brand lift.
Quality and performance count
For brands determining their retailer-by-retailer media spend, quality and performance of the retailer’s media network were the two most important considerations. Required spend commitments came third, while the scale of a retailer’s available audience was ranked as least important.
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These survey findings highlight that retailers can’t simply rely on their existing relationships with brands or their name alone in retail media; instead, they should prioritise the overall quality and performance when developing or expanding their media network.
Brands also care about the security and compliance of the partners they work with according to the survey, with the risk of data leakage and privacy concerns outweighing the rewards of retail media. Nearly three quarters mentioned the risk of data leakage and questions over privacy as top barriers to retail media network adoption. Retailers should be prepared to address these concerns and discuss them with their brand and technology partners.
Other factors that may hinder or slow retail media adoption were concerns over developing or expanding first-party data, budget considerations and limited staff to scale the required technology and operations. Nearly two thirds also cited issues with disjointed technology solutions.
Brands want transparency and control
Asked about which retail media network capabilities were most important to them, respondents rated transparency on up-to-date campaign performance reports as the most important feature, followed by control over campaign set up and audience selection. The study also found that brands want visibility into the pacing of campaign delivery and the choice to manage and service their own campaigns.
Retailers should therefore make sure they hand as much control to brands as possible, considering how the different pieces of their retail media tech stacks interact with one another and how easy it is for advertisers to navigate all those pieces. After all, the quality of the advertiser experience is a top priority for 70 per cent of surveyed brands.
With brands dedicating more and more budget to retail media, there will be more competition for funding across retail media networks – making it increasingly important for each network to differentiate themselves. The largest percentage of brands currently dedicate between a quarter and a half of their marketing budget to retail media activation – that’s a huge chunk of their overall budget. Some spend even more: For nearly one in five brands, over half of their media budget is allocated to retail media.
As retail media matures further, more funding will create higher demand for inventory and reach. To capture this growing share of spend, retailers will need to think about the reach of their media networks, their inventory and the channels they offer. Those who only offer limited channel strategies will leave money on the table: Only 37 per cent of retailers currently offer off-site programmatic advertising as part of their monetisation strategy.
Most brands expect retail media investment to grow
At present, the funding for retail media comes largely from brands’ marketing budgets, but in the coming years, we can expect to see an expansion of brand, performance and shopper marketing teams – and budgets – to support retail media. Budgets may also be reallocated to newly created, retail media specific buying teams.
Retailers will need to know where the retail media spend is coming from so they can engage with the right contacts and pitch for reallocating funds where appropriate. Some brands’ retail media budgets may be at capacity, but the survey showed that nearly half of brands expect to increase their retail media spend over the next three years. As they look to do more, they will stack up their retail media options against one another more aggressively.
In the future, simply having access to a retailer’s audience won’t be enough anymore. Retail partners will need to tick all the right boxes when it comes to their retail media offerings – or brands will end up taking their business elsewhere.