As we head into 2023, the big topic for consumer-packaged goods (CPG) brands is retail media networks and how they are going to affect budget allocations.
Retail media is an area of advertising that is just beginning to realize its potential: After two banner years in 2021 and 2022, US digital retail media ad spending is expected to continue its meteoric ascent into 2023, growing 25.8% to $51.36 billion—accounting for more than 18% of total digital ad spend. Dozens of retail media networks have come onto the market in recent years, with virtually every leading digital marketplace, mass merchandiser, national grocery chain, category-specific retailer, and delivery provider getting into the game.
Here are three considerations CPG advertisers should make as they leverage retail media networks:
Interest in retail media is driven by the promise that brand advertisers can access their troves of first-party shopper data to better target and measure ad campaigns, all while placing messages closer to the point of sale. The question, then, is how you can utilize that valuable consensual data to better engage consumers so you can build out your own zero and first-party data collection strategies? This is a critical piece of the advertising puzzle in the cookieless
One of the big problems facing CPG brands right now is how to finance each network. Think about ways you can create mutually beneficial programs with your partners across brand, product, and sales so that funding can come from each group as opposed to straight out of the marketing budget. Another option: shifting ad dollars from channels on which you would normally do direct buys.
Evaluating whether and how to use a retail media network should depend on your brand’s needs. Do you simply need coverage at the point of sale? Are you looking to create a comprehensive omnichannel experience using the network’s audience data across display and social? What level of analysis into ROAS, SKU-level sale data, and digital shelf optimization do you need? Identifying the solutions that will create holistic campaigns across multiple channels and retailers will enable your dollars to stretch further.
Want to learn about some of the macro trends affecting digital marketing more generally? Check out our 2023 Trends Report to stay ahead of the curve as you plan for the year ahead.