Rise of retail media networks: Bringing a new level of precision to consumer targeting

Retail Media Networks (RMNs) are rapidly emerging as a transformative force in the advertising landscape, especially as the industry shifts away from third-party cookies. RMNs have the potential to redefine audience targeting and campaign measurement by leveraging first-party data to deliver highly personalized and effective advertising experiences.

RMNs are advertising platforms owned and operated by retail companies like Amazon that allow brands to advertise directly to consumers on the retailer’s digital properties, such as websites, apps, and in-store screens. These networks leverage the rich first-party data that retailers collect from their customers’ online and in-store shopping behaviours, preferences, and purchase histories.

Emarketer defines RMN as “an asset owned and operated by a retailer which publishes advertisements, or a third-party publisher that contains ads which leverage a retailer’s first-party shopper data”.

Originating with Amazon’s launch of its programmatic advertising platform in 2012, RMNs are becoming a key revenue stream for major retailers like Walmart and Amazon.

Beyond the cookies

Let’s understand how retail media networks can reshape the advertising landscape, particularly in the context of decreasing reliance on third-party cookies.

Retail media networks are opening up exciting new possibilities in the advertising world, especially as we move away from third-party cookies, observes Russhabh R Thakkar, Founder and CEO, Frodoh World.

“They’re like a bridge between consumers and brands, built on the solid foundation of first-party data. Imagine you're shopping online for a new smartphone. Every product you view, every review you read, and every comparison you make – it’s all valuable information. Retail media networks tap into this goldmine of data, helping brands understand not just what you bought, but how you made that decision,” says Thakkar.

“In India’s diverse market, this level of insight is particularly valuable. It’s like having a personal shopper who knows exactly what each customer wants, whether they’re in Mumbai or a small town in Rajasthan. The real game-changer is how this data can be used in real time. Picture this: you’re browsing winter jackets, and suddenly you see an ad for the perfect pair of boots to match. That’s the power of retail media networks – they’re creating a more relevant, more responsive advertising experience,” he adds.

Shan Jain, independent director, brand strategist and marketing transformation advisor, suggests that marketers need to develop strategies that leverage the detailed consumer insights now available to deliver relevant yet engaging ads.

“Performance marketing ad content will have to improve. Additionally, there could be personalization at scale, with tailored ad content being delivered in real-time based on consumer behaviour and preferences. Secondly, retail media was traditionally used for bottom-funnel activities. However, greater awareness of consumers’ preferences and with the use of brand-building content, it can now be utilized for brand awareness and consideration. If integrated with other marketing channels such as CTV and social media, retail media network campaigns can aid in creating total-funnel plans, not just bottom-funnel plans,” Jain adds.

Lastly, she says, the attribution of sales and other KPIs will be more precise through closed-loop measurement, leading to higher ROI. However, she says she would be wary of relying too heavily on a single retail media network due to the lack of reach and audience diversity. Becoming dependent on one platform makes the ad strategy vulnerable to the platform’s policies and algorithms.

RMNs are effectively bridging the gap between various stages of the consumer journey, from exploration to purchase, says Neena Dasgupta, CEO & Founder, The Salt Inc.

“By leveraging diverse data sets, RMNs gain deep insights into consumer behaviour and preferences, allowing them to deliver more relevant and personalized recommendations. Unlike traditional advertising, which heavily relies on third-party cookies, RMNs are built on first-party data, making them less affected by the diminishing relevance of third-party cookies,” Dasgupta adds.

She reckons that quick commerce is rapidly gaining traction within RMNs, enabling brands to shorten the gap between consumer consideration and decision-making through engaging and innovative formats. This shift is the key transformation RMNs are driving within the advertising ecosystem.

The RMN advantage

Retail media networks do offer certain advantages to brands in terms of audience targeting and campaign measurement compared to traditional advertising channels.

Retail media networks are bringing a new level of precision to audience targeting and campaign measurement, says Russhabh R Thakkar. They’re not replacing traditional channels; but they are offering some unique benefits. He believes that in the India context the RMN-enabled precision is invaluable.

“Think of it like fishing. Traditional advertising is like casting a wide net and hoping to catch the right fish. Retail media networks, on the other hand, are more like using a fish finder. They help brands identify exactly where their target audience is and what they’re interested in. When it comes to measurement, retail media networks offer a clearer picture of the customer journey. It’s like being able to follow a customer from the moment they see an ad to the moment they make a purchase – and beyond. This level of insight helps brands understand not just if their ads are working, but how and why. In India’s rapidly evolving digital landscape, this precision is invaluable. It allows brands to adapt quickly to changing consumer behaviours, whether it’s the rise of voice search in regional languages or the growing popularity of live commerce events,” Thakkar states.

The RMN minimizes wastage by focusing specifically on consumer interests and intent, similar to the PPC (Pay-Per-Click) model, where value is quickly realized at the last mile, points out Neena Dasgupta.

“It offers precise targeting by leveraging demographic, geographic, and purchase-linked planning, enabling predictive modeling to maximize campaign effectiveness. Unlike traditional advertising channels, RMN is more closely aligned with the SEO/SEM (Search Engine Optimization/ Search Engine Marketing) landscape. However, it eliminates the step of competing in an external environment, as consumers are already within their ecosystem – arriving through search, traditional ads, or directly via the app. The greatest advantage of RMN lies in its ability to connect the moment of intent with the desire to purchase,” says Dasgupta.

Beyond lower-funnel

Retail media networks are evolving beyond lower-funnel activities, integrating with other media channels like CTV and digital platforms.

RMNs are expanding their reach across the entire customer journey. They’re not just about that final click to purchase anymore; they’re playing a role in everything from brand awareness to customer loyalty, points out Russhabh R Thakkar.

“Imagine you’re watching your favourite cricket match on a streaming service. You see an ad for a new energy drink, and with a click of your remote, you can learn more about the product or even add it to your shopping cart. That’s the kind of seamless experience that retail media networks are enabling through integration with CTV and other digital platforms. In India, where mobile is king, we’re seeing some fascinating developments. For instance, some quick commerce apps are turning into mini entertainment platforms, offering short videos and games alongside their shopping features. This blend of content and commerce is creating new opportunities for brands to engage with consumers. The future of retail media is all about creating a connected experience across all these touchpoints. It’s not about replacing other channels, but about working alongside them to create a more engaging, more relevant advertising ecosystem,” Thakkar concludes.

Concurring with Thakkar on this, Shan Jain says that retail media can be used in creating total-funnel plans, not just bottom-funnel plans.

“Decreasing reliance on third-party cookies means a lack of precision-targeting and addressability – the ability to deliver, measure, and optimize ads to a targeted audience or individual consumers in a precise manner. With that gone, marketers are directing their ads to retail media networks where consented first-party data is present. This data is even more precise, causing a shift in multiple ways,” she observes.

According to her, there will be a greater level of personalization without which the campaigns could misfire.

Neena Dasgupta reckons that RMNs are actually platforms that themselves advertise to bring more customers to their destination. Their strength, she adds, lies in ensuring that they fulfil the customer needs in the foreseeable future to increase the life-time value of each of them.

“Integration with other platforms is a strategy to attract more prospects, achieved by embedding within native environments such as CTV, smart devices, telco apps, and potentially through enhanced partnerships with satellite TV providers. This would likely involve a two-pronged approach: expanding reach by positioning themselves as an integrated app or campaign, and deepening engagement by offering compelling formats to drive purchase behaviour. Content plays a crucial role here – whether through videos, content hubs, or experience zones – providing RMNs with a significant advantage over traditional media by maintaining presence across the entire marketing funnel, from top to bottom. Moving towards content integration is essential, as it allows for the addition of a psychometric layer to their behavioural data, enabling highly personalized content experiences,” Dasgupta adds.

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