Most people are aware that major platforms like Amazon, Walmart, and Instacart offer paid search placements on their websites. However, what many may not realize is that these platforms are also involved in programmatic advertising, display advertising, social media advertising, and Google Shopping. For PPC marketers, it is important to understand this because these retail media outlets are driving customers to retail sites where they can make purchases from multiple brands in a single transaction. This is particularly true for retailers that offer everyday essential items, as they provide a pathway for regular visits both online and offline.
In a session at SMX Advanced, Elizabeth Marsten, VP of Commerce Strategic Services at marketing firm Tinuiti, shared her insights on the 2023 retail media landscape and the crucial essentials that marketers need to know. Retail media can be understood as a type of paid search, but it differs in that it is divided into two categories: onsite and offsite. Onsite retail media includes sponsored search ads (product ads), display banners, browse and category pages, coupons, and offers. Offsite retail media encompasses programmatic display ads (preferably through curated networks), social media ads, email and newsletter ads, SMS and push notifications, Google Shopping Product Listing Ads (PLAs), and OTT (over-the-top) ads.
How Does Retail Marketing Work?
Retail marketing is built on the foundation of first-party data that companies have been collecting for the past three decades. This data has enabled marketers to gain a better understanding of their customers and their behaviors, ultimately shaping what we now know as retail marketing. Marsten offers the example of Kroger, a grocery retailer, and how much data they have collected from customers who use their loyalty card program. This data, collected over the years through phone number input at checkout stands, has contributed to much more targeted advertising that aligns with customers’ preferences and desires.
Both Google and Microsoft have played significant roles in the digital advertising industry, and their platforms have experienced significant waves of growth over the past few decades. Google Ads, for example, launched around 2002 and took 14 years to reach $30 billion in advertising revenue. Social media platforms like Meta, Twitter, and Reddit started gaining traction in 2008 and achieved $30 billion in advertising revenue in approximately 11 years. The most recent wave began in 2016 with the rise of retail media, and this sector reached the $30 billion revenue mark in just five years. The rapid evolution of retail media can be attributed to the frequent changes and innovations happening in the industry.
The Importance of In-Store Sales in Retail Media
In-store sales still hold significant importance in the realm of retail media, particularly because the dynamics of this sector differ from direct-to-consumer (D2C) websites. Retail media professionals pay close attention to in-store sales, sales at the shelf, and sales at self-checkout points since they provide valuable digital touchpoints for customer engagement. Marsten highlights Walmart as an example, as the company generated $3 billion in advertising revenue last year. With over 4,700 stores in the United States alone, Walmart’s physical presence provides numerous touchpoints for digital capabilities, increasing opportunities for customer engagement.
Retail marketers can utilize Target Roundel as a means of purchasing Google Shopping ads, which appear in Google’s search engine results pages (SERPs). Clicking on these ads directs customers to the target.com experience, ultimately contributing to in-store sales. This approach has proven popular among major retailers like Best Buy and Home Depot. However, it is important to consider certain details, such as the need for the product to be available in-store and limited reporting capabilities during the campaign.
Retail media has established strong connections with Microsoft and Google, both of which offer various platforms and tools to enhance retail marketing efforts. These connections range from hardware products like screens and gaming consoles to activation platforms, automation and research tools, insights platforms, customer data platforms, and more.
- Retail media offers numerous options and capabilities, similar to what is available through Google and Microsoft.
- There is still plenty of opportunity to tie together in-store experiences, given the significant impact of in-store sales.
- Marketers should closely watch the intersection of PPC (Google and Microsoft) and retail media to identify potential overlaps and opportunities.
In today’s evolving landscape, it is vital for PPC marketers to stay informed about the latest trends and strategies in retail media. Bridgewell Marketing offers comprehensive SEO services and expertise to help businesses navigate the complex world of retail marketing. Learn more about our services here.