What is a Retail Media Network ?

May 13, 2024

We get asked this a lot.

Retail media is evolving fast from its trade/shopper roots and continues to take share from digital and traditional media channels.

Its growing in 3 dimensions - instore, onsite and offsite.

Instore media covers things like cardboard point of sale material, digital screens, trolley ads, instore radio etc

Onsite ads are predominantly display ads or sponsored products (that only appear after a customer has entered a search term) and offsite ads might include placements in a loyalty app, on social media, on a third party website or a connected TV channel (eg ITV x, Sky, Channel 4 in the UK).

In all cases these ads are sold by the retailer (or someone acting on their behalf) as they use assets that are either owned or controlled by the retailer (stores, trollies, digital screens) or use the retailer's data to target them (eg offsite ads).

The advertisers are, for the most part, the brands that are sold within the retailer, but increasingly, third party or non endemic ads are being shown as other advertisers realise the benefits of audience reach and targetability that retail media networks enable.

The term, Retail Media Network, describes the entity or organisation, that acts on behalf of the retailer and creates the various propositions (or ad types), sells them, sets up campaigns, organises their execution or adops (eg puts up and takes down the cardboard, ensures the screens are showing the right content at the right time) and provides reporting and insights on what's happened.

RMNs are sometimes housed within separate companies (eg Tesco outsource to dunnhumby, Sainsburys to Necatr360 and Asda to LS Eleven) or can be divisions or business units within the retailer (eg Morrisons Media Group).

The task of printing, setting up, removing and recycling cardboard trolley ads is similar to the task of showing a digital ad for eg Ariel when a customer searches for "washing powder" in the sense that they are both campaigns that require selling, set up and execution, but the execution or adops is clearly very different and tends to be undertaken by specialist service partners.

The task of selling to a brand owner who has a commercial trading relationship with the retailer is very different to the task of selling to the ad agency of an energy company. In the former case, retail media might be one element of an annual trading agreement that also includes other elements such as promotions or space.  In the latter, the relationship is purely transactional, based on its merits relative to other media choices.

In both cases, the advertisers will expect proof that the paid for media was delivered as expected and some analysis regarding its performance and the Retail Media Network must deliver these.

The RMN must be skilled at proposition development and designing ads that fit within the retailers overall marketing and trading strategy and add value to the shopping journey for customers, they must know what tasks they back themselves to deliver in house and which to outsource. They must be skilled in marketing tech and agency procurement, sales, ad ops, data management, CRM, loyalty management, shopper marketing, category management, media planning, and brand building. Very few retailers have the self confidence, skill or financial muscle to do all of these things themselves and so the Network tends to have multiple parties, contracted to provide respective services, within it.  

RMN's are rather like the conductors of an orchestra bringing together an array of specialists and ensuring that the output of the whole is greater than the sum of the parts.

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