This is part of a series of articles exploring some of the current trends impacting streaming media companies. In this article, we’re looking at the impact of Retail Media Networks on streaming advertising.
Retail media networks (RMNs) such as Amazon Ads and Walmart Connect are flourishing because of a precious commodity: first-party data. Retailers collect an incredibly detailed amount of information about their customers, including purchase behavior, expanded demographics, and other attributes that influence purchases. This data is used to deliver more relevant messages for their own brand as well as advertiser brands purchasing media from a retailer’s RMN. With the demise of third-party cookies, the value of first-party data has grown considerably, fueling demand for retail media and the underlying data that can be used for advanced targeting and closed-loop attribution. Now, RMNs have expanded beyond their own sites to fortify ads placed across the broader digital ecosystem, including connected TV (CTV).
CTV Is Hot
There’s no question that CTV is hot. According to eMarketer (as reported in MNTN Research), CTV video ads are the third-most popular ad format that U.S. consumer goods advertisers have bought via RMNs. Syncing RMNs with CTV makes it possible for businesses to run video ads on CTV platforms that apply the first-party shopper data provided by the RMN. Here are some examples:
In addition to these partnerships, many retail media networks are also developing their own CTV ad solutions. For example, Walmart Connect is developing a self-service CTV ad platform that will allow advertisers to create and launch CTV campaigns directly.
All told, U.S. retail media network CTV ad spend will total $813 million in 2023, and will grow by nearly seven times to $5.63 billion by the end of 2027, according to eMarketer.
Opportunities and a Major Challenge
RMN advertising on CTV represents significant opportunities for advertisers including the following:
Needless to say, the emergence of retail media networks and the use of first-party data represent meaningful opportunities for advertisers. The real challenge is scaling and automating the use of first-party data across all media types, including linear TV. Most linear systems were not designed to handle multiple currencies, let alone massive first-party data sets. In order to scale the use of first-party data across the broader linear ecosystem, publishers need media planning and order management systems (OMS) that can accommodate census-based data from a variety of sources. This “multi-currency” capability allows publishers to sell and activate campaigns using first-party data in a more scalable and secure way.
A modern OMS (such as Operative.One and AOS) helps publishers and RMNs onboard first-party data in a fully automated way. In addition, it can provide the following benefits:
Bottom line: a modern OMS makes it possible for RMNs and publishers to realize the full value of their first-party data as its applied to CTV, linear, and cross-screen advertising.
The Future: Convergence, Unification, and Automation
Large retailers with both digital and brick-and-mortar operations have significant opportunities to drive growth by unifying their advertising offerings across digital, linear, and brick-and-mortar channels. This involves convergence, unification, and automation throughout the advertising workflow, from planning to execution.
The retail media advertising landscape is evolving rapidly, driven by the power of first-party data and the desire for more targeted and effective advertising. While challenges exist in truly scaling the use of first-party data, the industry is moving towards a more unified, data-driven approach to advertising across all channels and platforms, which presents vast new opportunities for both large and small publishers.
