POV

From coffee to cosmetics, consumer product marketers are increasingly leveraging retail media networks (RMNs) to reach the right shoppers and boost recognition and sales. U.S. marketers invested a whopping $36 billion in digital marketing through RMNs last year alone. eMarketer expects that amount to surge by 31.4% in 2022.

Retail media networks allow brands to target consumers based on past purchases. Marketers can feature their products with special officers, enhanced search results, display ads and other strategies across a wide range of platforms. However, while growing rapidly in share of digital ad spend by CPG companies, these media networks cannot necessarily drive results for every brand or consumer-facing business. 

RMNs are a win-win for retailers and product marketers. Retailers add a rapidly growing and highly profitable revenue stream. Brands leverage retailer’s first-party purchase data without imminent concerns of signal loss, due especially to growing privacy concerns. Don’t underestimate the importance of signal loss as a tailwind helping RMNs grow. CPG marketers cited access to retailer first-party data as the number one motivation to spend with RMNs (62% per Merkle/eMarketer),

It’s no wonder that so many retailers have launched RMNs. In fact, each of the top 10 U.S. retailers has one.

• Albertsons
• Amazon
• Costco
• CVS
• Home Depot
• Kroger
• Lowe’s
• Target
• Walgreens
• Walmart

By turning their sales data into purchase-based audiences, these big retailers enable massive efficiency improvements in digital marketing. But these performance gains are limited to product marketers – primarily those that are trying to sell products through that store. Retail marketers can’t exactly buy ads on a competitive RMN in an attempt to divert store traffic. And when it is a theoretical option (e.g. on Amazon), most simply don’t want to give their money to the competition or help them in any way. Can you imagine Barnes & Noble advertising on Amazon? Or Walgreens on CVS? Neither can they!

Beyond retail media networks, there are other sources of card-based purchase data that can help brands like retailers, airlines, and entertainment subscription services find the best advertising audiences at scale. Those sources can deliver the same kind of precision in their categories that RMNs deliver to CPG and other consumer product companies, without the limitations of reaching and understanding only the shoppers at a single retail chain.

Retailer marketer shopping list

When looking to drive RMN-like performance, retailers need to look beyond demographics, browsing history and other interest proxies. Retail marketers need options that help them:

• Find potential  new customers  based on their past purchases
• Communicate with  previous shoppers  – even those who have not yet signed up for their loyalty program
• Reach  seasonal shoppers  during specific time periods and holidays 
• Message  lapsed buyers  with special promotions

There are two options that fit the bill: Purchase-based audiences and location-based audiences. Purchase-based audiences are created from actual purchases made on credit, debit and/or loyalty cards. Location-based audiences are based on mobile phone geolocation tracking. Both can be activated across any media platform and don’t require cookies (Here’s more detail on cookie-free targeting from our partner, Comscore).

While the best option for your business will vary by industry, purchase-based audiences benefit from a continuing shift from cash to card buying. That means the underlying data set keeps getting larger which improves both reach and accuracy. Location data availability is declining. Additionally, purchase-based audiences mirror RMN activations while location data is a proxy.

Efficient Questions

Whether you are a brand owner, an agency or a demand side platform, the key question to ask yourself is this:  “How do we know the audiences we buy are effective and efficient?”

If you want to drill in, here are some additional questions to consider:

• What type of data is used to create the audience segment?
• How big is the underlying data set?
• How accurate are the audiences we use?

The answers may surprise you and lead to higher ROAS for you and your business.

About Us:

Nick Mangiapane is CMO of Commerce Signals, a company focused on helping marketers grow sales impact and cut waste through purchase-based audiences, campaign measurement and customer insights. Commerce Signals’ products are powered by the largest consumer payments data set available which includes Visa and Mastercard, credit and debit card spending.