What are retail media ads? Retail media advertising first appeared in traditional brick-and-mortar retail settings and has since moved online to fulfill a largely identical function. Initially, companies paid retailers to place signs and promotional items within their stores in an effort to draw customers in and increase sales of the SKUs they carried.

Retail media advertising focuses on consumers who are as close to the conclusion of the buyer’s journey as possible, as opposed to traditional media-based advertising, which tries to catch consumers’ attention in non-retail situations. Shoppers who are in the vicinity of retail advertising placements are demonstrating interest in that product category and have a clear desire to purchase.

The same principles apply to retail media advertising in online environments: marketers pay a platform or marketplace to feature their products, typically consumer goods, at or close to the point of sale. An everyday illustration would be a company like Michellin advertising its tires on the pages of search results for racing goods or spare parts on websites like Amazon or Target.com. Travel and insurance are two sectors that can greatly benefit from using retail media placement. Although not the only way for firms to use retail media advertising, e-commerce websites and apps are one of the most popular examples.

Retail data is a great starting point for customized marketing since it paints a highly personalized image of consumers. The demand for retail media ad inventory will increase along with the expansion of digital marketplaces. Advertisers have fewer capabilities to enhance their sponsored acquisition operations with the release of iOS 14.5 and tighter privacy limitations. As a result, first-party, on-platform data will become more valuable. Additionally, the closed loop of the internet retail industry makes it simpler to link advertising activities to actual purchases.

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