How retail media makes programmatic advertising better

Today’s shoppers are searching for value, and they’re shifting their habits to find it. Research from a recent 84.51° Consumer Digest found that this year, shoppers plan to spend less on discretionary costs including dining out, outside of home entertainment, clothing and beauty services. Continuing this frugal mindset, they’re also looking to spend more on savings and investments.  

These shifts are providing new opportunities for CPG brands to meet shoppers’ needs and help them achieve their goals. One of the strategies brands are increasingly turning to is to partner with retail media networks to come alongside shoppers with helpful information and offers when they’re at or near the point of purchase. 

Because retail media is powered by reliable shopper data and insights, it provides a better understanding of the customer for more tailored and effective programmatic advertising. And it delivers more value to shoppers because it enables them to receive relevant and timely messaging, offers and discounts across the wide variety of channels they use today.    

What is retail media?

Retail media refers to the digital advertising space brands can buy on retailer websites and apps. With more shoppers purchasing online than ever before, retail media allows brands to move beyond physical stores to boost awareness and visibility on the digital shelf in order to influence purchases. With shopper insights, brands can reach new, relevant audiences and connect with their existing customers in more meaningful ways. 

To serve up these ads, retailers have their own channels. Retail media networks are the platforms that enable brands to serve personalized ads to shoppers based on first-party purchase-based signals.  One of the biggest benefits of retail media networks is that they connect brands and shoppers closer to the point of purchase, which can increase the likelihood of conversion. 

Retail media fueling programmatic advertising

To get those retail media ads in place, marketers are turning to programmatic advertising, which allows brands to buy digital ad space automatically through supply-side platforms. This comes at a time when the ANA Programmatic Media Supply Chain Transparency study is shining a light on programmatic waste. The ANA said advertisers are responsible for more active stewardship of their media investments, balancing their pursuit of low-cost inventory in programmatic media with ad quality. Combining retail data with programmatic media buys empowers brands to strike the right balance.

With Kroger Precision Marketing, our connection with The Trade Desk (TTD), a demand-side platform, allows advertisers to activate KPM audiences directly in their existing TTD seats – using the advertiser’s own inventory supply and rates and giving them more control over their ad campaigns. By using their own inventory supply and rates, advertisers can tailor their advertising strategies to align with their specific goals and audience, leading to more effective and efficient advertising campaigns.

How does retail media work?

Today’s shoppers have a multitude of channels to choose from when they’re making purchasing decisions. To be present in those situations and near the point of sale, there are several different types of retail media that brands can choose from to make sure they’re meeting their audiences in the places and ways they want to be met.  

• Onsite: These ads appear on a retailer’s website or apps and include banner ads, native ads and other digital display formats. A popular example would be the sponsored product ads that appear at the top of retailers' site search results pages.    

• In-store: These ads connect brands to consumers at the point of purchase. They include digital advertising screens, interactive kiosks, audio messaging and more inside brick-and-mortar stores.    

• Offsite: These digital display ads are shown to consumers outside of the retailer's properties. Offsite ads provide an opportunity to connect with consumers while they’re engaged in related activities, such as perusing a recipe on Allrecipes or scrolling social media, which can be particularly powerful for brands.  

Along with this wide variety of retail media offerings, retailer-owned media networks offer an unmatched understanding of their customers. This enables brands to reach shoppers at key moments and create messaging that resonates with them.   

Retail media provides closed-loop measurement for better ROI

Retail media also allows marketers to track and optimize ad performance to better understand the effectiveness of campaigns throughout the entire customer journey–and beyond. This “closed-loop measurement” enables advertisers to attribute conversions or sales to specific ads or campaigns. That helps them understand which ads are driving results and allows for a more reliable indicator of return on investment (ROI).  And because closed-loop measurement involves continuous feedback and data analysis at each stage, the insights gained enable advertisers to optimize their programmatic campaigns in real time, so they can tweak their strategies based on shopper behaviors as well as their own specific goals.  

Retail media offers shoppers true value

Brands are not the only ones reaping the rewards of retail media; these networks provide big wins for shoppers as well. Armed with insights, brands can provide shoppers with valuable offers on items they’re already buying, and discounts that encourage them to explore and sample products that align with their preferences.     Shoppers can conveniently receive these savings through digital links, QR codes and other digital touchpoints they’ve become increasingly comfortable with. Delivering relevant and personalized ads and offers that meet shoppers’ needs provides value and convenience, leading to an enhanced customer experience.  

Retail media on the rise

With so many benefits for both brands and consumers, it's not surprising that retail media advertising is expected to gain momentum. According to a forecast from eMarketer, retail media will be the fastest-growing ad channel across media through 2027, posting growth rates of more than 20% each year. The organization also predicts that by 2027, retail media will nearly tie with social media as the number two ad spending channel, and will be bigger than connected TV, digital audio, and traditional television advertising combined in 2027.   

As the numbers continue to climb, it’s clear that retail media isn’t just a trend. As ecommerce continues to grow, so will the unrivaled addressability and promising performance that retail media delivers. 

Learn more about how retail media delivers performance for CPG brands and value for shoppers.