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  • Writer's pictureRob Lucci

The Evolution of Retail Media Networks

Shopping online concept. Shooping cart on desk.

Right now, retail media networks are the shiny new penny of the advertising world. But they have really been around for decades. We used to call it shopper marketing. Before the internet made e-commerce possible, brands were already collaborating with the retailers that sold their products. Brands and their products supported their grocery store partners with collaborative marketing efforts such as endcap promotions, displays, shopping cart sponsorships, printed coupons, and various printed signage. And these efforts are still happening today.

In recent years, retailers have increasingly moved these shopper marketing budgets toward digital retail media. Running digital campaigns across their e-commerce sites requires a lot less work for the retailers because they don’t have to install and maintain physical displays in their stores across multiple locations. Less work means higher profit margins.

A large portion of the current retail media spend has so far come from the brands that are already selling their products through the retailer. But retailers only have a limited number of brands to which they can sell media inventory as well as a limited supply of media to sell. Because of this, they’re starting to look at opportunities outside of the established model.

Over the next year, we’re likely to see an increasing proportion of retail media spending coming from brands that don’t advertise on the retailer’s e-commerce site at all. A combination of the changes occurring with privacy policies and the fading out of the cookie means it’s getting harder for brands to find and reach their audiences online. With offsite retail media, they can use the retailer’s accurate, first-party consumer data to reach audiences across additional networks that the retailers have partnered with. With this data, brands are effectively advertising on the open web, but through RMNs.

Using these retail methods of advertising, a brand can match up its advertising message with a retailer’s first-party data, to find new potential consumers with similar characteristics to its existing loyal customers. It can then serve personalized advertising to the retailer’s customers, across a range of selected publishers, based on their shopping behaviors and preferences.

As part of this shift to attract new brands and off-site options, there is an increasing use of technology to match brands’ first-party data with the retailers. We have heard a lot of chatter about the amazing power of data, but only a small portion of advertisers are using it. Obtaining and analyzing data is not only complex but also expensive. This year, as data technology continues to improve and brands and agencies learn how to use it more effectively, the expense-to-value ratio will begin to close.

The digitization of all retail media is on its way. Right now, brands can buy digital advertising online, but they will eventually be able to use the same buying models to purchase digital advertising in stores. Whether it’s on the pricing panels that run along supermarket shelves, or the signs that promote special offers, all the physical in-store media that is currently printed will eventually be digital. As this happens, the advertising inventory and the impressions they deliver will be purchased the same way as the digital ads currently on the retailer websites. In-store digital advertising will be displayed on every available space.

In its current form, retail media is still in its initial stages. However, the evolution of this medium is unfolding quickly, and it won’t be long before we see this trend becoming a more common practice for many brands. It may still be a few years before it is more standardized across retailers, but we are certainly witnessing the wave of the future.


About A3 Media

A3 transforms media from an expense into a smart investment. Since 1997, we have successfully helped regional businesses launch new products, expand into new markets and increase sales through media plans that make every dollar spent do more. Our clients include brands such as Yuengling and Ashley Furniture. For more information about how A3 Media can help your digital marketing efforts, please call A3 Media at (610) 631-5500.

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