Co-op marketing has long been a cornerstone for brands attempting to reach new customers. In fact, over $70 billion was spent globally on co-op advertising in 2021 alone. However, the arrival of data-driven insights and constantly increasing online targeting accuracy have revolutionised this game.
While online retail media platforms like Walmart and Alibaba are now providing unparalleled customer acquisition insights, smaller retailers and advertisers remain sluggish in making the most of this changing landscape – out of the $70 billion mentioned before, only 20% was spent on online retail media advertising. So, how can retailers and advertisers take advantage of this massive $42 billion opportunity?
In 2017, Amazon’s revenue from advertising was roughly $4 billion. In 2021, this figure had risen to about $31 billion, making Amazon a bigger advertising platform than YouTube. Selling ads online has become far more profitable than selling goods, and large-scale retail digital media networks have already begun encouraging businesses to shift their marketing spends. To do the same, they are offering unique and detailed consumer insights, data patterns, and pricing models. As an advertiser or retailer, there is ample space for you to provide the same services while the market is still in a dynamic state. However, as is the case with all online platforms today, moving rapidly is key.
Co-op, having far been an offline industry, restricted to boards in stores and newspaper ads, has finally gone online. So, what can your company offer that makes online retail media your next big revenue opportunity?
A portion of most organisations' marketing budget is already dedicated to social media advertising, aimed at leveraging the insights provided by platforms like Meta and Twitter. However, privacy law changes have restricted the ability of these platforms to share meaningful information. Meta itself released a statement saying that these privacy changes cost Facebook $10 billion in advertising revenue in 2021 alone.
Retail media platforms are an exception to these changing regulations. By closing sales on the same platform as retail media advertisements, retail networks can leverage artificial intelligence and machine learning to a greater extent. This allows advertisers and retailers to offer an advertising option that truly drives conversions with relevant messages and instant personalisation.
The closed-loop marketing system offered by top retail media networks provides another indisputable advantage. It reduces consumer friction points by providing immediate purchase opportunities, thus boosting conversions. While this has always been an advantage with traditional co-op marketing, today’s data analytics tools bring this age-old tactic to the 21st century.
Online retail media data provides further access to transactional data, buying power insights, and consumer behaviour inputs. It allows retail stores and brands to have more personalised conversations with customers and measure marketing actions to a single SKU.
An increasing number of competitors in the retail marketplaces has made it essential for your offerings to stand out amongst the crowds. Combined with a decreasing attention span in consumers, purchase decisions will be based on shopping experiences that offer fewer friction points.
Personalised advertisements and recommendations play a vital role in smoothening this consumer journey. When retailers and advertisers utilise the vast amount of data they possess to curate and highlight certain selections, it allows them to stand out against competitors who fail to offer the same. Besides, consumers are certain to favour platforms that already understand their preferences.
Strategic retail advertising is therefore an opportunity to not just generate revenue through advertisements, but also create a more rewarding and smoother shopping experience for your consumers.
As third-party digital insights decrease with changing privacy policies, there is an increasing risk of ineffective targeting due to a lack of actionable insights. First-party data available with retail media platforms is helping brands effectively target advertisements across the vast expanse of the internet.
In fact, the insights being provided are of immense use even for offline marketing campaigns. With a fleshed-out consumer journey and detailed behavioural insights, pain points can be addressed offline as well as online, ensuring a comprehensive marketing effort. This makes retail platforms with advertising insights an invaluable part of any organisation’s marketing strategy.
The advantages of optimising retail platforms for advertising are rapidly increasing. The biggest motivator is, of course, the ample opportunity for profit. Giant platforms like Amazon, Walmart, and Alibaba have already shown the potential here. However, there is also the chance to be an essential part of every brand’s advertising and marketing strategy. The increase in investment in retail media advertising is inevitable. The only question you must ask yourself is - has your platform prepared itself to make the most of the retail media revolution?
Looking for ways to leverage your first party data and traffic to earn additional revenue? Our AI ML powered retail media tech, Monetize, helps you enable every advertiser to run ads on your platform to achieve their marketing goals and ensure higher yields for you. To learn more, contact us today.
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