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2023 will be a critical year for RMNs. Find out how you can capture key opportunities.
Retailers stand at a crucial junction.
While uniquely positioned to capture opportunities created by a shift from third-party data toward first-party insight, retail media networks (RMNs) are also challenged to meet unprecedented client demands with untested strategies. Many retailers have not maximized revenue from their ad space, and others are just launching their media businesses. From lacking in-house expertise to lagging tech solutions to support their ad operations, RMNs are trailing their digital media counterparts in many areas. They must go big in 2023 to maintain—or gain—market share.
The retail media share of all digital ad spend is set to top $52 billion in 2023. Planning for this growth can position retailers ahead of the competition to capture greater spending. Here are five predictions for how RMNs will gain a competitive advantage:
- Robust tracking and reporting become the norm
Investment in full-funnel ad strategies grows
RNMs develop more internal expertise for selling inventory
RNMs will seize upselling, crosselling, and bundling opportunities
Increased competition leads to joining forces
Prediction #1: Robust tracking and reporting become the norm
Brands are investing in RNMs at unprecedented rates. With investment comes new expectations.
RNMs will face pressure to prove their impact. Historically, very few networks have provided the kind of data that confirms their value to partners. Some 55% of brand executives say that the inability to quantify ROI has deterred them from making a greater investment in RMNs. Offering access to this data—packaged with insights and analytics—doesn’t just capture attention, it builds trust.
RMNs will need to invest in technologies that help tie ad exposure to purchases through in-store, in-app, and online transaction data. This becomes a critical piece of the reporting and measurement puzzle that breaks down silos between shopper, inventory, and performance data and delivers greater value to end clients.
Prediction #2: Investment in full-funnel ad strategies grows
Until recently, RNMs were positioned squarely at the bottom of the funnel, delivering content that drives purchase decisions. Marketers are rethinking that role. Successful RMNs will shift their focus to full-funnel opportunities that follow the entire customer journey rather than solely driving conversions.
Brand-building and awareness are just as vital as lower-funnel outcomes. In a McKinsey study, advertisers indicated that they looked to RMNs just as much for brand-building as they do to drive purchases. To capture maximum retail dollars, it’s clear that RMNs must expand to deliver end-to-end campaigns that engage their first-party audiences on additional off-site media channels.
As retail media advertising opportunities move up the funnel, there is also an opportunity in off-site channels such as display, video, and CTV. Upper-funnel formats like CTV are “the holy grail for advertisers,” according to Insider Intelligence, making them well worth the effort for RMNs.
Prediction #3: RNMs develop more internal expertise for selling inventory
RMNs are poised to become top players in the digital advertising world. As such, they will be challenged to increase their expertise in their media properties and the unique opportunities they can offer. Supported by more robust data, RMN will augment their internal teams for more direct-sold capabilities as they step into an authoritative role, educating the industry on media-buying opportunities and outcomes instead of outsourcing media planning.
To become consultative sellers, internal teams must have access to real-time data, analytic insights, and accurate forecasting. This requires a greater investment in both personnel and the ad-management technology that supports their work. As the industry demands that RMNs become more advanced, retailers must leverage all tools at their disposal to become true partners in digital advertising, leveraging institutional knowledge and tech solutions to gain incremental revenue.
Prediction #4: RNMs will seize upselling, cross-selling, and bundling opportunities
Most brands—89%—indicate that, overall, they are satisfied with the RNMs they are using.
With positive momentum and the bottom of the funnel already on lock, RMNs have a chance to influence the entire customer journey and mine their existing relationships for larger revenue opportunities.
Not only are more expansive media plans beneficial to brands, but they also allow RMNs to increase their bottom lines. Cross-selling through retargeting, upselling higher-value items, and offering curated bundles represent a win for both parties.
Prediction #5: Increased competition leads to joining forces
Retail media had a breakout year in 2022.
Walmart and Target reported advertising revenue for the first time, both clocking in at $1 billion or more. Instacart started selling inventory. Best Buy, Macy’s, Lowe’s, Nordstrom, Walgreens, and Marriott all stepped up as ad networks. Since any retail business with a first-party identity graph can add a profitable revenue stream as an RMN, it's likely that competition will only proliferate in 2023 beyond traditional retailers.
As the field expands, retailers will be increasingly pressured to join consortiums of RMNs that provide greater visibility into inventories and utilize first-party data effectively. With new conglomerates such as these entering the scene, investments in tech that support selling and reporting can be the saving grace for independent networks.
In fact, it may be the tech that separates the most successful players from the rest in 2023 and beyond. As retailers hustle to secure the technical capabilities and the talent to support expanding their networks into robust ad tech ventures, the right digital transformations will define their futures.
To increase their competitive edge in a growing market, RNMs will sharpen their focus on ROI across the full-funnel ad experience, enabled by more in-house sales teams and technological capabilities. Combining forces with other RMNs will also increase their likelihood of success.
Turn Predictions Into More Revenue
Solutions like Boostr do the heavy lifting on proposal creation, inventory management, data visualization, and more so retailers can focus on customer experience, optimizing profit margins, and becoming consultative, full-funnel sellers. Aligning teams through a single source of truth facilitates enterprise-scale innovation that keeps pace with an ever-evolving industry.
Boostr is the retail media industry’s most comprehensive and accurate digital transformation technology for managing advertising sales and delivery. Boostr offers CRM, OMS, and automated RFP response technologies designed by media professionals to sell more plans at higher margins. Boostr retail clients include Macy’s, Lowe’s, and more. Contact us for a demo today.