A guide to retail media networks

A retail media network is an advertising infrastructure that comprises a collection of digital channels (e.g., websites, apps) that are offered by a retail company to third-party brands for their various advertising purposes. Purchasing ad space on a retail media network can help brands of all sizes further build their digital marketing strategies.

The retail media landscape is growing.² According to management consulting firm Bain & Company, businesses are expected to increase their ad spend in the retail media space to $25 billion from 2018 to 2023.³

With the growing popularity of online shopping for consumers, retailers are recognizing their digital channels as useful opportunities to help brands reach and engage shoppers. This helps marketers potentially reach more relevant audiences while also providing brands with audience and shopping insights that can help make their retail marketing more effective.

Retail media can help brands advertise in places where consumers are already spending their time. As mentioned earlier, retail media refers to the ads actually placed on a retailer’s media network. Brands purchase these ads across these digital channels to help customers discover and learn about them as they shop. Think of retail media like a “digital shelf.” It can help brands further increase their visibility to shoppers, much like how in-aisle specials, promos, and deals can stand out to shoppers in physical stores.

Additionally, when brands advertise on a retailer’s website or app, the ads can feel more relevant to consumers who are browsing online. And when shoppers engage with a brand’s retail media or purchase their products from an online store, the third-party brand has an opportunity to receive first-party insights that can help them better understand their audiences’ shopping patterns. This information can help brands tailor their products and messaging to better serve shoppers.

As the advertising industry evolves, access to first-party insights is becoming more important for brands. Marketers are seeing how retail media networks can help them better plan, make more informed media buying decisions, and implement more strategic campaigns. Having first-party information is a main reason consumer packaged goods (CPG) brands say they chose to work with retail media networks, according to 2021 research by eMarketer.⁴ And research from McKinsey found that 75% of non-CPG advertisers have plans to increase their investment in retail media networks too.⁵

Although retail media networks may sound complicated, they are straightforward for marketers to understand. Essentially, retailers enable brands to buy advertising across a collection of digital channels (e.g., websites, apps) that include both channels owned by the retailer directly and channels owned by third-party media companies that work with the retailer to offer ad inventory to brands to further market their products beyond a retailer’s owned properties.

If retailers want to further expand a brand’s reach with a wider audience, they may work with media companies to open up ad space inventory for third-party brands or activate their other digital properties as well. Simply put, retail media is the digital counterpart to in-store ads, and they are an important part of advertisers’ marketing strategies in an evolving advertising industry.

A retailer that has a digital store and the ability to sell ad space for brands to purchase can be considered a retail media network. But it’s not as simple as launching a website. Rather, retailers need to invest in the technological infrastructure to support retail media network needs.

Retail media networks have benefits for retailers, brands, and customers. One of the reasons retail media works so well for brands and customers is that the advertising can feel timely and relevant. Below are more examples of how retail media networks can help.

Retail media is becoming a part of some marketers’ advertising playbooks, as more brands look to optimize their ad spend and ensure their campaigns reach relevant audiences. Here are some trends that brands may see as the retail media industry grows: