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Retail media networks are taking the advertising world by storm, leveraging the lessons learned from traditional ad networks to create a more effective and data-driven advertising ecosystem. This article by Umer Paracha, DTC & Retail Growth Marketing Expert, explores how retail media networks are transforming the landscape by addressing the shortcomings of their predecessors.
From Ad Networks to Retail Media Networks: A Paradigm Shift
Ad networks, the backbone of digital advertising since the 90s, have facilitated connections between supply side platforms (SSPs) and demand side platforms (DSPs). They offered scalable solutions for advertisers, providing access to vast publisher inventories with a click of a button. Despite their long-standing presence, ad networks have faced challenges, particularly in areas such as data privacy, ad format innovation, and attribution accuracy.
Key Ad Networks:
- Amazon Publisher Services: Leverages Amazon’s extensive user data.
- Google AdSense: Known for its vast scale and inventory.
- Meta Ads: This network it's particularly effective for social media marketing and brand engagement.
There are dozens more, all offering unique value propositions for different publishers and advertisers alike.
Conversely, rather than focusing on scale across different websites, most retail media growth has come through publishers creating their own walled gardens. Amazon, Walmart, and eBay, for example, focus on quality on their own website. While they offer a more fragmented buying experience, they are offering performance-driven outcomes that ad networks never have been able to boast before. Retail media networks are stealing business from their ad network counterparts as they learn from ad networks' mistakes.
The Evolution: Retail Media Networks
Retail media networks have emerged by capitalizing on the weaknesses of traditional ad networks. Companies like Amazon, Walmart, and eBay have built their own walled gardens, focusing on quality and performance over sheer scale. This shift has led to innovative and effective advertising strategies that outshine the capabilities of traditional ad networks.
Three Lessons Retail Media Networks Have Learned
1# Data is power, guard it!
Ad networks have a history of privacy-invasive practices. Major players like Google and Criteo have been fined worldwide for violating user privacy and also upsetting retailers by sharing data with competitors.
This approach is problematic for retailers due to the intense competition in the industry. Consider Albertsons, Costco, and Walmart all using the same ad network. If data is shared among these retailers, Costco's unique insights could be used by Albertsons for better targeting, diluting Costco's advantage. They lose their competitive edge in attracting advertisers and driving sales.
That's why today's retailers are keeping their data in-house. Whether they build their own solutions or partner with firms that ensure data stays within their network, retailers are no longer willing to compromise their data.
2# Create ad formats that enhance the user experience
Ad networks have lagged in ad format innovation, often sticking with outdated banners and disruptive ads. In contrast, retail media networks are pioneering dynamic, native ad formats that seamlessly integrate into the user experience. From in-store screens to sponsored brands, these innovative formats drive engagement and performance, providing value to both advertisers and consumers.
3# Implement Closed-Loop Attribution to your Network
Retail media networks excel in providing detailed attribution, capturing the entire user journey from the initial ad impression to the final sale. This closed-loop attribution offers advertisers robust reporting and clear insights into ROI, a capability traditional ad networks have struggled to match. By delivering precise performance metrics, retail media networks ensure advertisers see the value in their investments.
Learn more about Topsort’s Halo Attribution model here.
Top retail media ad network examples
Though retail media is exploding, a handful of retail media ad networks today stand out from the crowd because of their differentiation. Notable retail media ad network examples include:
Amazon: The market leader of retail and retail media is untouchable. With their constant innovation, from ad units like sponsored brands to hyper-targeted ad strategies, advertisers can’t stop spending with Amazon Ads.
Walmart: The market runner-up, Walmart remains an Amazon competitor due to their constant expansion. With acquisitions like Vizio, and their dominant in-store presence, Walmart is able to capture their large audience at scale with Walmart Connect.
Poshmark: The social commerce marketplace launched "Promoted Closet" allowing their sellers to boost their entire inventory at once using machine learning. It operates on a cost-per-click model, similar to Etsy and Amazon, and includes an analytics dashboard for tracking performance metrics. The tool, in beta since early 2023, increased sales by 43% for users.
Empowering Retail Media with Topsort
At Topsort, we enable retailers to bring their retail media networks in-house effortlessly with our advanced ad infrastructure solutions. Our platform supports retailers in maintaining data privacy, launching high-performing ad units, and achieving closed-loop attribution, all within a short timeframe.
To learn more about how Topsort can help your business thrive in the evolving landscape of retail media, contact us today.
