Understanding the Different Retail Media Ad Formats: A Retailer's Guide

Rakshit Singh,
Product Analyst
March 23, 2023
| 4 min read

Introduction

Retail media, on the off-chance you haven’t read enough about already, refers to advertising placements within digital retail environments, such as e-commerce platforms, marketplaces, and retailer websites. It allows brands and advertisers to target consumers while they are shopping and browsing for products. Retail media has become increasingly crucial for retailers and marketplaces as it provides a new revenue stream while enhancing shopping experience by leveraging valuable privacy-friendly data. 

The revenue potential and scope of retail media is significant and expected to grow rapidly in the coming years. In 2023, retail media is expected to reach $97 billion in the US alone, up from an estimated $41 billion in 2022. Global retailers and marketplaces are investing heavily in retail media capabilities and technologies to compete with established players like Google and Facebook, and are expected to have a significant advantage in the years to come. 

When it comes to ad formats specifically, retail media offers rapidly advancing options to retailers and marketplaces - both in terms of reach, as well as capabilities. Here are the most effective ad formats in retail media as it stands today:

Sponsored Product Ads

Sponsored Products are a type of retail media advertising format that allow advertisers to promote their products within e-commerce platforms and marketplaces. These ads appear in search results and on product detail pages, and are designed to help drive sales and increase visibility for specific products. Sponsored Products typically use a pay-per-click (PPC) pricing model, meaning advertisers only pay when a shopper clicks on the ad.

To create a Sponsored Product campaign, advertisers first need to select the products they want to promote and create a campaign within the advertising platform of the e-commerce platform or marketplace. Advertisers can then set a budget, bid on relevant keywords, and create ad creatives, such as images or text, to appear in the Sponsored Product ad unit.

Display Ads

Display Ads are a type of advertising format that typically appear on websites, apps, or other digital platforms as banner or rectangular ads. These ads can include text, images, and rich media elements such as animation or video. Display Ads are designed to build brand awareness and drive traffic to a website or landing page.

To create a Display Ad campaign, advertisers can use a platform such as Google Ads or a third-party monetization platform to design and target their ads. Advertisers can choose from a variety of ad sizes and formats, such as static or animated banner ads or rich media ads that incorporate video or interactive elements. Advertisers can also choose targeting options such as demographics, interests, and geographic location.

Video Ads

Video ads are a type of digital advertising format that involves displaying a video on a website or app. These ads can be in-stream or out-stream, meaning they can be played before, during, or after the video content or in a standalone ad format.

To create a video ad campaign, businesses need to identify their target audience, choose the right video ad format, and create a compelling video that showcases their product or service. It's also important to choose the right pages, screens, and user profiles for their video ads to ensure the success of your campaigns.

Native Ads

Native ads are a type of online advertising that blends in with the content of the website or app they appear on, making them less intrusive and more engaging for the shopper. These ads can be in the form of sponsored content, recommended articles, or product listings.

To create a native ad campaign, businesses need to identify their target audience, choose the right native ad format, and create a compelling ad that matches the style and tone of the website or app. It's also essential to choose the right platforms and channels to display the ads and frequently review campaign analytics.

In-Store Ads

In-store ads are a type of retail media format that businesses can use to promote their products or services to high-intent shoppers while they are inside the store. These ads can be in the form of digital displays, self-checkout counters, self-serve or interactive screens, in-store audio, and point-of-sale devices.

To create an in-store ad campaign, businesses need to identify their target audience, choose the right advertising format, and create a compelling ad that showcases their product or service. It's also important to choose the right location inside the store to display the ads and track the performance of the campaign regularly.

Rich-media Ads

Rich-media ads are a type of digital advertising format that involves using advanced features such as video, audio, and interactive elements to engage shoppers and promote products or services. These ads can be in the form of expandable banners, floating ads, or interactive ads.

To create a rich-media ad campaign, businesses need to identify their target audience, choose the right advertising format, and create a compelling ad that uses advanced targeting features to engage shoppers.

Best practices for using ad formats to launch successful campaigns

  • Targeting the right keywords: This involves identifying the relevant keywords and search terms that your target audience uses when searching for products or services similar to yours. Targeting the right keywords can help you reach your desired audience and increase your ad's visibility.

  • Optimizing product detail pages: This involves ensuring that your product detail pages are well-organized, informative, and easy to navigate. This can improve the shopper experience and increase the likelihood of conversions.

  • Optimizing product selection: This involves selecting the right products to promote based on their relevance, popularity, and profitability. It's important to regularly review and update your product selection to ensure that your ad campaigns are effective.

  • Monitoring performance: This involves regularly tracking the performance of your ad campaigns and making adjustments based on the results. This can help you identify areas for improvement and optimize your campaigns for better results.

  • Testing ad creatives: This involves testing different ad creatives, such as images, headlines, and call-to-actions, to determine which ones are most effective. Testing ad creatives can help you improve your ad's click-through rate and conversion rate.

  • Using negative keywords: This involves excluding keywords that are not relevant to your product or service. Using negative keywords can help you avoid showing your ads to irrelevant audiences and improve the performance of your ad campaigns.

  • Providing a clear call-to-action: This involves providing a clear and compelling call-to-action in your ad, such as "buy now" or "learn more." A clear call-to-action can help increase the likelihood of conversions.

  • Using high-quality visuals and interactive elements: This involves using high-quality images, videos, and interactive elements, such as animations or quizzes, to make your ad more engaging and memorable.

  • Optimizing for mobile devices: This involves ensuring that your ad is optimized for mobile devices, such as smartphones and tablets. This can improve the shopper experience and increase the likelihood of conversions.

  • Targeting specific audiences: This involves targeting specific audiences based on demographics, interests, and behavior. Targeting specific audiences can help you reach your desired audience and improve the performance of your ad campaigns.

Retail media has become a must-have monetization platform for retailers and marketplaces. In today's digital age, the world of advertising is continually evolving, and retail media offers a significant advantage for brands who want to target their customers while shopping. Understanding the different retail media ad formats is crucial for businesses looking to leverage this platform's benefits. The right ad format, paired with an effective strategy, can increase sales, enhance customer experience, and drive brand ROAS as well as retailer ad revenues.

Want to know more?

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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