The retail media landscape is rapidly expanding, with new entrants from airlines to payment platforms keen to leverage their first-party data assets to capture market share.
In April 2024, JPMorgan’s Chase Bank introduced Chase Media Solutions, which allows brands to engage with consumers based on their interests and shopping habits. In return, Chase customers receive personalised offers and cashback opportunities with familiar and new brands. Brands can use Chase’s transaction data to target customers based on their purchase history, whether new, lapsed, or loyal. They can also use customers’ data to understand incremental spending on both in-store and online purchases.
At Cannes Lions 2024, United Airlines launched Kinective Media, an in-flight advertising platform that targets consumers during their travels by utilising the airline's extensive video network. By leveraging United's first-party data, the platform will create anonymised audience segments accessible through the airline’s mobile app, inflight entertainment screens, and other touchpoints. Brands and agencies like Norwegian Cruise Line, Macy’s, Chase United Co-Brand Credit Cards, TelevisaUnivision, IHG Hotels & Resorts, and Dentsu have partnered with United to use the new network.
United Airlines, PayPal, and Expedia have also all developed their own retail media networks (RMN). These new entrants to RMN join global ones like Target’s Roundel and Walmart Connect, and in Asia Pacific, Deliveroo, Grab, FairPrice and Carousell.
So, is there a risk of oversaturation in the market, and what are the pressing concerns for RMNs today? Campaign explores.
The growth of RMNs in APAC
Despite the influx of companies entering the retail media space, experts believe the industry is far from reaching market saturation since it is still in its nascent stages, particularly in APAC.
Troy Townsend, CEO of Zitcha, believes that FMCG brands have ample room for growth and innovation. He notes that Asia's current retail media landscape is still in the foundational period and presents more opportunities than constraints.
Townsend tells Campaign the increase in retail players only emphasises the need for a diverse retailer supply to help brands strategically allocate their spending across various RMNs.
“Brands that strategically use first-party data to innovate with ad formats, build strong partnerships, focus on the customer experience, and continuously optimise their performance will stand out and thrive in this rapidly accelerating sector,” explains Townsend.
“This presents a huge opportunity to drive incremental revenues for retailers and brands.”
Agreeing with Townsend, Rachel Powney, chief marketing officer of Multilocal, adds that having more competition presents an opportunity for brands to deepen their connection with consumers and enhance the overall consumer experience.
Powney explains that with access to vast amounts of data, brands can deliver more relevant, personalised advertising messages to their audiences.
“Companies like United Airlines, for example, can leverage their first-party data to create a highly profitable model by providing consumers with real-time offers throughout their journey—from home to the airport, on the plane, and upon arrival at their destination,” says Powney.
“Similarly, PayPal can drive significant brand opportunities by utilising its first-party data to send targeted advertising messages based on purchase behaviour and intent. When used correctly, consumers are more likely to respond positively to the advertising messages, finding them relevant and valuable.”
For APAC in particular, the retail media market is not yet at a stage where fragmentation is an issue, as retailers focus on building and refining their networks—emphasising privacy, compliance, and the establishment of walled gardens. Some have also yet to begin building RMNs focused on creating secure and compliant ecosystems that protect consumer data while delivering targeted advertising solutions.
Ken Mandel, regional managing director and head of GrabAds and brand insights at Grab, points out that today, brands and agencies have more options and advertising channels. He explains three essential ingredients characterising RMNs: A sizable frequent audience, first-party data, and closed-loop attribution—as not all RMNs are created equal.
Mandel explains that different RMNs serve brands at different purchase stages of the customer journey, providing various touchpoints across the entire marketing funnel. For example, GrabAds’ recent study with Kantar revealed four main categories: social media, ecommerce, large retailers, and super apps.
“While the term ‘retail’ might be somewhat confusing, the truth is that platforms do not necessarily need to be retailers to be RMNs,” says Mandel.
“Rather than thinking about streamlining and consolidating across platforms, brands should experiment with RMNs and consider how they can leverage the unique capabilities of different RMN platforms to achieve full-funnel business objectives.”
Ensuring privacy and compliance with regulations
A more pressing matter for retailers at the moment than saturation is balancing creating meaningful, memorable, and manageable experiences with privacy-safe solutions. As third-party cookies and identifiers are phased out, RMNs are prioritising investing in privacy-centric approaches.
With consumers increasingly concerned about privacy, brands must ensure transparency and comply with regulations designed to protect them.
Making opt-out and opt-in procedures visible, easy to access, and straightforward is crucial, as consumers do not want to deal with lengthy contracts and legal jargon. Success in retail media hinges on honesty about data usage and offering consumers the choice to opt-out.
Providing value in exchange for data is essential, as more people are likely to opt in and stay opted in if they perceive a benefit. Therefore, a solid incentivisation strategy is critical.
Townsend notes that every RMN considers compliance, privacy, and customer experience as retailers take this very seriously, and customers' knowledge about retailers is paramount to their business success.
“The best RMNs are being built with customer satisfaction and privacy at their core. If the end customer has an excellent experience, everyone wins: the retailer, the brand, and, most importantly, the customer,” says Townsend. “As retailers prioritise these aspects, they set the stage for sustainable real media growth.”
Retail media becomes 360-degree campaigns
The transformation of RMNs into comprehensive 360-degree campaigns is also changing how brands formulate their marketing strategies. Brands are capitalising on these developments in several ways.
Marketers can now target specific stock-keeping units (SKUs) as RMNs offer insights into a brand's entire product catalogue, enabling more marketing strategies. This approach allows for customised messaging and creative assets for each SKU, enhancing relevance and consumer engagement.
Product presentation within RMN feeds has also evolved. Previously, products were shown against plain white backgrounds, but now brands use creative visuals at the SKU level. This enhances the appeal of product listings and aligns them with the brand's overall creative strategy, improving the customer experience.
Another opportunity within RMNs is leveraging omnichannel products retailers offer. Brands can integrate marketing efforts across offsite channels like Meta and Google and in-store experiences. This integration provides a cohesive customer journey, from online discovery to in-store purchase, benefiting both the brand and the consumer.
With more insights into customer preferences and behaviours, brands can create highly personalised campaigns that extend across all touchpoints, from online ads to in-store displays, ensuring a consistent brand experience.
Real-time data and analytics enable brands to continuously optimise their campaigns. By quickly identifying successful elements and areas for improvement, they can adjust their strategies for maximum effectiveness and ROI.
For example, Grab's data shows that 66% of consumers use the app without a specific store in mind, and 91% have discovered new restaurants or stores through the app. This highlights the potential for upper-funnel brand building and engaging consumers throughout the entire funnel, from discovery to purchase and loyalty, both online and offline.
Another example is Puma. The brand ran an online-to-offline campaign with GrabAds in Singapore. Ad banners informed users of a complimentary Puma gift bag they could redeem at a physical store. This approach achieved an average click-through rate of 1.84% and over 20,000 customers redeeming their bags in-store.
Mitch Waters, senior vice president of client services for APAC at The Trade Desk, notes that one of the most exciting aspects of data is its potential to transcend the confines of retail media.
He says that brands are now leveraging retail data in off-site environments on the open internet, where APAC consumers spend nearly 60% of their online time streaming OTT content, reading news and blogs, listening to podcasts, and gaming online.
However, he says the shift to these environments signifies that retail data is not solely about driving lower-funnel conversions but also about fostering upper-funnel brand awareness. Brands utilise this information to inform broader marketing strategies, integrating trade and overall marketing budgets.
“For example, retail data allows marketers to reach customers much earlier in their shopping journey. Instead of waiting for a customer to enter a store or visit a retailer’s website, retail data can identify customers who are also watching the latest streaming series and target them there,” explains Waters.
“As such, retail data is helping brands reach the right consumers at each step. An advertiser might discover that specific audiences exposed to OTT ads are then retargeted on their mobile devices and likelier to buy products.”
In addition, Waters says retail data allows advertisers to be very intentional about who they're targeting. With years (or even decades) of data and rich ecommerce signals, retailers can create relevant audience segments about customers’ life stages, shopping tendencies and more.
“For example, it can help differentiate between a customer who purchased a baby toy as a gift and one who is expecting a child, allowing advertisers to use that information to tailor ad messaging,” explains Waters.
Evaluating the success of retail media campaigns
According to IAB’s Annual State of Data Report 2024, placing ads on online retail platforms is highly effective because online shoppers already have a shopping mindset.
Nearly nine in 10 (89%) consumers report paying attention to at least one type of retail media ad, and 86% of ecommerce shoppers say they have purchased a product from a retail media ad in the past year.
However, research by IAS reveals that experts perceive RMN advertising to have poor ROI compared to other channels. Media quality solutions, such as viewability measurements, can enhance the ROI of retail media network campaigns.
Industry experts can measure their success by comparing overall ad costs and revenue metrics such as advertising cost of sales and return on ad spend.
IAS conducted an observational study to determine the true impact of viewability measurement on business results for a primary consumer packaged goods (CPG) retailer.
Laura Quigley, senior vice president of sales for APAC at IAS, explains that the platform analysed the effect of viewability on conversions.
Comparing conversions between viewable and non-viewable impressions, IAS discovered that in-view ads increase conversions by 200% compared to those not in view.
“Next, we examined ROI. Analysing impression data from a major CPG brand, we found a significant lift in ROI for viewable impressions: the retailer experienced a $2.25 return for every dollar spent on viewable impressions,” says Quigley.
“Accurately and strategically tracking viewability in retail media is also feasible. By monitoring how viewable ads are, marketers can optimise RMN campaigns to maximise the impact of their ads and ensure they are getting the most value for their investment.”
Therefore, when choosing RMNs, brands must assess all relevant metrics, from ROAS to brand health indicators. A holistic measurement approach provides a comprehensive view of campaign performance and helps identify areas for improvement.