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What is a Retail Media Network and Why is it Important? | Amazon Ads
Guide

# A guide to retail media networks

Retail media networks are a type of advertising platform that allows retailers to sell ad space on their digital channels to third-party brands. This can help brands reach a captive audience and build their digital marketing strategies.

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As online shopping has grown in popularity with consumers, retail media has become more popular with brands. The term retail media refers to the actual advertising placed on a retailer’s media network. Third-party businesses that look to reach relevant audiences will work with a retailer to create ad campaigns for those digital channels.

Currently, retail media networks are gaining traction in the advertising world.1 It’s an important category for the growth of programmatic advertising, but there’s a lot marketers that still don’t know about the retail media landscape nor about buying media in this space. In this guide, you’ll learn the basics about retail media networks, why they’re important, and how they can help you grow your business.

## What is a retail media network?

A retail media network is an advertising infrastructure that comprises a collection of digital channels (e.g., websites, apps) that are offered by a retail company to third-party brands for their various advertising purposes. Purchasing ad space on a retail media network can help brands of all sizes further build their digital marketing strategies.

The retail media landscape is growing.2 According to management consulting firm Bain & Company, businesses are expected to increase their ad spend in the retail media space to $25 billion from 2018 to 2023.3

With the growing popularity of online shopping for consumers, retailers are recognizing their digital channels as useful opportunities to help brands reach and engage shoppers. This helps marketers potentially reach more relevant audiences while also providing brands with audience and shopping insights that can help make their retail marketing more effective.

## Why is retail media important?

Retail media can help brands advertise in places where consumers are already spending their time. As mentioned earlier, retail media refers to the ads actually placed on a retailer’s media network. Brands purchase these ads across these digital channels to help customers discover and learn about them as they shop. Think of retail media like a “digital shelf.” It can help brands further increase their visibility to shoppers, much like how in-aisle specials, promos, and deals can stand out to shoppers in physical stores.

Additionally, when brands advertise on a retailer’s website or app, the ads can feel more relevant to consumers who are browsing online. And when shoppers engage with a brand’s retail media or purchase their products from an online store, the third-party brand has an opportunity to receive first-party insights that can help them better understand their audiences’ shopping patterns. This information can help brands tailor their products and messaging to better serve shoppers.

As the advertising industry evolves, access to first-party insights is becoming more important for brands. Marketers are seeing how retail media networks can help them better plan, make more informed media buying decisions, and implement more strategic campaigns. Having first-party information is a main reason consumer packaged goods (CPG) brands say they chose to work with retail media networks, according to 2021 research by eMarketer.4 And research from McKinsey found that 75% of non-CPG advertisers have plans to increase their investment in retail media networks too.5

## How do retail media networks work?

Although retail media networks may sound complicated, they are straightforward for marketers to understand. Essentially, retailers enable brands to buy advertising across a collection of digital channels (e.g., websites, apps) that include both channels owned by the retailer directly and channels owned by third-party media companies that work with the retailer to offer ad inventory to brands to further market their products beyond a retailer’s owned properties.

If retailers want to further expand a brand’s reach with a wider audience, they may work with media companies to open up ad space inventory for third-party brands or activate their other digital properties as well. Simply put, retail media is the digital counterpart to in-store ads, and they are an important part of advertisers’ marketing strategies in an evolving advertising industry.

## What is an example of retail media?

A retailer that has a digital store and the ability to sell ad space for brands to purchase can be considered a retail media network. But it’s not as simple as launching a website. Rather, retailers need to invest in the technological infrastructure to support retail media network needs.

## Benefits of retail media networks

Retail media networks have benefits for retailers, brands, and customers. One of the reasons retail media works so well for brands and customers is that the advertising can feel timely and relevant. Below are more examples of how retail media networks can help.

Brand relevant 

### 1. Brands can reach relevant shoppers

One of the biggest benefits of retail media networks is that they can help brands better connect with relevant shoppers. Since shoppers are generally in the mindset to buy when they’re visiting a digital store, seeing a brand’s advertisement on a retailer’s website can help that brand stay top of mind for consumers as they shop. Another benefit of using retail media networks is access to first-party insights rather than third-party insights, which can help better inform the brand’s marketing campaigns. Beyond insights, retail media networks can also help brands better link their ad spend to conversion. The journey between when customers engage with digital ads to when they make a purchase can help brands better understand the connection between ad spend and product sales, which can help them analyze their return on investment and make more strategic business decisions like increasing inventory, allocating resources, or increasing ad budget.

Sponsored products 

### 2. Customers can find products they need

As shoppers browse for specific products, they may come across sponsored ads from a brand that relate to what they’re looking for on a retailer’s website. These ad placements can help shoppers discover a new brand or inspire them to try a new product.

## Trends in retail media networks

Retail media is becoming a part of some marketers’ advertising playbooks, as more brands look to optimize their ad spend and ensure their campaigns reach relevant audiences. Here are some trends that brands may see as the retail media industry grows:

- More brands will start experimenting with retail media: In 2021, more than 23,000 businesses have spent more than $3 billion on retail media, according to MediaRadar.6
- Retail media will allow brands to diversify their digital marketing strategies: As the advertising industry grows and changes, marketers want reliable insights to help inform their advertising campaigns and build more durable marketing strategies.
- First-party insights can help brands build more relevant campaigns: Additionally, first-party insights can help brands better tailor ads for shopping audiences. This helps shoppers feel like the ads they are seeing are relevant, and it helps brands be more strategic about how they are spending their ad dollars.

Although the landscape of retail media is still relatively new, as it matures it will become a helpful and insightful form of digital advertising for brands.

1 “The evolution of retail media,” AdExchanger, US, 2022

2-3 “Retail Media Networks,” Bain & Company, US, 2022

4 “Retail media networks hit their stride in 2021,” eMarketer, US, 2021

5 “The rise of commerce media: The opportunity for CPGs,” McKinsey, US, 2021

6 “The State of Retail Media: What to Know and Why Advertisers Are So Excited,” MediaRadar, US, 2021