What Retailers Need To Know About Retail Media

Illustration of retail executives adding personalized product ads to their online store.
Table of Contents
Close button icon
Illustration of retail executives adding personalized product ads to their online store.

Retail Media is on the rise, and not just for Amazon

Praised as a leading conversion rate optimization tool, Retail Media is an antidote for retailers facing inflation and economic uncertainty. 

Brands like Uber are stating they’ll be laser focused on optimizing marketing efficiency and hiring as a “privilege”. Every company — retailers and consumer brands alike — is looking to optimize efficiency, functionality, and messaging on their ecommerce sites.

Enter Retail Media. Retail Media allows brands to bid for product placement on a retailer's website, with a Google Ad-like set up. 

With online shopping increasing year over year, retailers have already adapted to optimizing their websites and digital experiences. 

I’ll call it now, 2022 is the year for optimizing your online store, and not just because of the changing rules around data collection and privacy.

How Retail Media drives value for retailers

Display ads, social ads and in particular, Facebook's success with Audience Network ads has made many advertisers/retailers think about new ways to bring digital advertising to their website. 

The point is, banner ads are nothing new. So it's not a surprise that Retail Media has come to the fore. 

In short, Retail Media is the monetization of a retailer's digital shelf. It gives companies the ability to:

  1. Offer more targeted digital advertisements for an additional revenue stream
    With Retail Media, retailers can offer more targeted advertising with robust attribution to online visitors, beyond just generic remarketing display banners. Successful Retail Media tools can contribute to healthy revenue streams for retailers. Depending on the scale of traffic, Retail Media can contribute anywhere between an additional $5,000 to $10m a month in revenue.
  2. Assist in smarter conversion rate optimization (CRO) and alternative monetization strategies for partner brands.
    Retailers can optimize their partner and brand marketing spend by showing products to an engaged audience and reporting on cost-per-click (CPC), reach, and impressions at an incredibly granular level.
Reasons why retailers choose to pursue retail media networks. Source: eMarketer

Why now?

Retailers have historically relied on third-party platforms and channels to advertise to their customers. While those platforms remain important to their marketing mix, Retail Media has become vital in 2022. Here's why:

The privacy-first marketing personalization problem

Tightening consumer privacy standards—those of both governments and tech companies—has undercut long standing digital marketing tools that rely on third party cookies, making it more difficult for products that rely on personal data to communicate with consumers in personalized ways. 

2022 may be the year of SMS and customer data platform (CDP) solutions - but what happens as this limited access to private data decreases in years to come?

Customer expectation on product relevance is very high

Bombarded with irrelevant and annoying ad formats and repetitive promotions, frustrated shoppers respond with banner blindness, shorter attention spans and the growing use of ad blockers. On the flip side, budget-conscious marketing execs despair as their brands foot mounting bills with no return on ad spend (ROAS).

With mounting addiction to short form content, people want things quicker and more effective (relevant) than ever before. 

Inefficient marketing spend

Google found more than 56% of ad impressions are never seen by consumers, and Proxima estimates $37 billion of worldwide marketing budgets are being wasted on poor digital performance, and that’s just digital.  

It is estimated that within the next five years, digital advertisers will waste up to $100 million a day due to ad fraud.

Colin Lewis, ecommerce consultant and industry expert, recently commented: “With the demise of cookies and their ownership of first party data, there are fewer options in terms of getting the product in front of the actual target customer at an affordable cost. 90% of brands cannot afford big brand, big budget brand campaigns.”

Profitability requirements across retailers

Retailers need to find other ways to monetize their website traffic at a high margin - contributing directly to the bottom line.

Supply chain issues, inflation woes, and demand destruction are all contributing to an added cost overhead for retailers and their bottom line. Walmart and Target are looking to make expensive investments in their own logistics infrastructure to avoid supply chain disruptions in the future. 

After Target's Q1 earnings call, ecommerce consultant Rick Watson pointed out that it's extremely hard for retailers to forecast their inventory positions accurately. Target had unexpected costs from volatile freight spot rates and shipments were either delayed or arrived earlier than expected.

Amazon's dominance in Retail Media is over

Many of the biggest retailers either already have or are building their own Retail Media solutions (e.g. Walmart, Target, Best Buy), and in fact Amazon’s sponsored products business made $26 billion dollars in revenue in 2021 alone. With massive funding, resources, and first party data to fuel the momentum, the big players can afford to build out Retail Media networks on their own, however many mid-market retailers don’t have this luxury.

Amazon's historical dominance in the Retail Media market is falling. Source: eMarketer

Many ecommerce and marketing professionals have already considered this as a source of future revenue - with Forbes showing that 74 percent of brands have dedicated budgets for retail media networks.

Woolworth’s Cartology, for example, has seen major success in implementing Retail Media for Woolies clients, like Chobani. Focusing on driving awareness of their yogurt range, Chobani saw 20.4m impressions, 7.6m reach and 15% of customers that were new to the brand. 

Retail Media platforms like Particular Audience are leveling the playing field for midmarket retailers so that they can compete with the biggest retailers in the world.

How you can get started with Retail Media

Getting started with Retail Media is a process of defining your scope, focus, and capabilities.

As BCG writes in their Retail Media report, you can get started by doing three things:

  1. Set your ambition - focus and scope your media offering.
  2. Determine the type of advertiser, nature of activity and channels that you’ll focus on. 
  3. Clearly communicate retail media’s value to vendors with a product roadmap and specific stories of early success.

Once you complete these three steps, you're on your way to setting up a media personalization flywheel for your customers.


Retail Media is on the rise. 

It allows marketers and advertisers to compete with Amazon-like advertising capabilities and get a new stream of income. Monetizing a website while also providing users with the most relevant experience possible. 

Retail Media is a solution that will be adopted by many, and will further benefit from network effects. The sooner you set up a Retail Media program, the faster you'll see results from this innovative advertising channel.

Rochelle Ritchie is the Head of Marketing of Particular Audience, the Aussie tech platform helping retailers create a more intuitive and personalized shopping experience without the need for personally identifiable information.

Powerful Infrastructure To Launch & Scale Your Digital Marketplace — Chat with us to learn more
Powerful Infrastructure
To Launch & Scale Your Digital Marketplace

Chat with us to learn more