Five Profitable Tips for Optimizing Your Retail Media Strategy
And we’ll remember retail media.
In the past year, brands ranging from Walmart to Cdiscount to Home Depot launched retail media networks, as the industry woke up to the revenue – and profit – potential of monetizing their online real estate.
Retail media is advertising that uses a retailer’s highly valuable, proprietary customer data to target ad campaigns on the retailer’s website. From sponsored product listings to banner ads to app notifications, retail media allows brands to take advantage of their existing digital properties and audiences — turning brands and suppliers into advertisers, and turning website space into highly profitable advertising inventory.
Why everyone’s talking about retail media
While retail media has captured widespread media attention in the past year, the strategy and technology has existed for much longer. The largest players in eCommerce and retail — including Amazon, Target and Kroger — have relied on retail media strategies to add revenue from partners and suppliers since 2012.
However, two trends converged in 2022 to make retail media an obvious opportunity across verticals and industries: macroeconomic pressures and changing data regulations.
Following years of economic growth, retailers suddenly faced headwinds in 2022. Leading brands needed to find new revenue streams and increase profitability, and retail media offered a fast, straightforward solution, allowing retailers to monetize their website space and traffic. As Constance Fouquet, Chief Digital Officer, IT & B2B at Maisons du Monde shared during the launch of their Mirakl Ads-powered retail media strategy:
"Retail media is the logical next step to enhance the growth and profitability of our eCommerce business… This project is a performance driver for the business, while also helping us to generate more value for our customers, sellers, and advertisers."
Advertisers also faced new challenges in marketing to potential customers. Existing digital advertising strategies relied heavily on third-party customer data and cookies to target specific audiences and segments. But new data privacy rules – and Google’s much anticipated 3rd party cookie deprecation – made many of these existing approaches obsolete. The first-party data collected by retailers on their eCommerce sites represented an ideal solution — a privacy-compliant way for advertisers to reach highly relevant, motivated shoppers.
Businesses that run their own marketplace saw a particularly strong opportunity with retail media. Marketplace and dropship businesses have consistently outpaced eCommerce growth, reaching 6X the rate of overall eCommerce growth in 2022. At the same time, third-party sellers are logical, ready-made customers for retail media: they want to be more visible to buyers, and they’re happy to pay for top placement. French consumer goods retailer Cdiscount reported that advertising revenue from sellers grew at a 75% CAGR over the last 6 years – while revenue from first-party brands grew by just 16%.
Contact the Mirakl Ads team to learn how you can monetize your eCommerce traffic with a retail media solution optimized for eCommerce and marketplaces.
Five must-haves for a successful retail media strategy
It’s not too late to take advantage of the retail media opportunity, but the first-mover advantage is disappearing fast. It’s the fastest-growing digital advertising channel in 2023, and is on track to reach $175 billion by 2028, surpassing revenue from TV advertising in the next five years.
So how can newcomers optimize their retail media strategy – without overwhelming shoppers with irrelevant ads or negatively impacting the customer experience? These best practices can put retailers on the fast track to success, establishing a new, highly profitable revenue stream that adds value for shoppers.
1. Concentrate on a clean, seamless user experience
Your retail media inventory should integrate seamlessly into your website, both in terms of appearance and content. Layouts of product listings should remain consistent with website UX even when they include sponsored placements, and the sponsored products should match other products on the page in terms of price, quality, and appearance. In other words, protect your customer experience by ensuring that sponsored products are both logical and unobtrusive.
Retail media placements should always feel like a seamless part of your site
2. Deliver a quality advertising opportunity
Are you setting your advertisers up for success? Deliver the best possible return on investment by featuring sponsored products in areas with high traffic and visibility. Sponsored products should be given premium positions “above the fold” on category pages.
3. Protect the user experience through relevance and personalization
Relevance and context are key to a successful retail media strategy. If shoppers are looking for low-cost costume jewelry, it doesn’t make sense to promote expensive, fine jewelry necklaces in the same search results. Likewise, while beer and wine belong to the same category, that doesn’t mean sponsored ads for Guinness should appear when browsing for Cabernet. An AI-powered auction engine, like the one offered by Mirakl Ads, is essential here, personalizing ad placements with both customer data and contextual signals, so that ads are always relevant.
Guinness is no substitute for Cabernet – Use Mirakl Ads’ AI-powered auction engine to avoid irrelevant sponsored products
4. Invest in advertiser management
Investing in the advertiser experience is crucial to drive adoption and maintain satisfaction, which means selecting a retail media platform that meets not only your needs, but theirs. To ensure high adoption rates, your retail media solution should be professional and intuitive to use, eliminate barriers to entry, and demonstrate the immediate potential for ROI.
This is especially critical for marketplace businesses, which have a ready-made audience of sellers primed to be the first advertisers. A marketplace-ready retail media solution needs to offer easy integrations with marketplace technology, allow sellers to re-invest sales revenue in advertising, and take into account marketplace-specific dynamics like buy boxes.
Mirakl Ads’ professional, intuitive platform ensures publishers and advertisers get actionable insights on performance
5. Mix self service and managed service
When retailers launch their retail media networks, they need to choose how they manage the relationship with advertisers. A self-service approach supports greater scale and makes it easier to monetize the “long tail” of advertisers, but it offers less control over commercialization. A managed-service approach, run by either the retailer’s in-house team or external resources, is better for managing key accounts, but can be resource-intensive. The most profitable strategy melds both approaches: managed service for the most important accounts, self service for the long tail.
Launch your retail media strategy with Mirakl Ads
It has never been easier for marketplace and dropshipping operators to unlock a new, highly profitable revenue stream with retail media.
But the right retail media technology is essential to success. You need a solution that enables a personalized, relevant experience and match how your business operates, whether you’re offering first-party assortment, third-party products, or both.
Take a deep dive into best practices with Mirakl’s recent master class, Building an optimal retail media strategy to monetize your eCommerce traffic, and discover how Mirakl Ads gives you the tools to power sustainable eCommerce growth.
Interested in learning more about Mirakl Ads’ seamless, profitable retail media platform with relevant & personalized sponsored products, display advertising, and other formats? Let's talk.