Retail Media – watch it take wings and soar!

One would think that Meta would have met its match in Alphabet or something. But no – its retail media!

Meta is seeing single-digit ad revenue growth. It is dealing with massive lay-offs and its shopping features not really doing the magic – all they have now is an option to click through to a website to buy. Needless to say, Meta seems to be struggling with an increase in users and slower ad revenue for the last year.

Retail media on the other hand, is where the mojo is. Marketers are able to reach customers right there where the purchasing happens. And that makes all the difference.

Meta has recently announced that it plans to make some changes to its Shop ads both on Facebook and Instagram. They have two kinds of ‘shops’ – the kind that has integrated inventory and the kind that sends users to a website to actually buy. Meta has said that it plans to remove the second option and brands will have to either run a fully enabled shop in-app, or not be able to run Shop ads.

Meta has said that retailers who did not offer an integrated shopping experience will not be able to hold a shop spot on Facebook or Instagram or even tag products in posts from August 10, 2023.

It certainly looks like Meta’s in-app shopping elements are really not doing much.

On the other hand, retail media is flourishing.

E-commerce really drives retail media. The whole world is moving from shopping at physical stores to buying online. The pandemic helped things along to a very large extent.

Brands are jumping up to snatch retail media segments, making sure they are right where the action is, and are able to reach high-intent shoppers right at the very point of sale on the sites and apps of their retail partners. With more and more customers doing their shopping online, brands are dealing with smaller margins and lower profits. And what better way to make up for it than through retail media – which places them right where the action is!

Take the example of Amazon. Or Walmart. They make huge revenues through ads. Selling ads is way more profitable than selling goods – they know that well. When customers buy directly from the big retailer after they see the retail media network ad, it puts the retailers in a great position that is so unique! They can offer closed-loop marketing in a manner than all the other kinds of digital advertising networks are now struggling to do.

But that doesn’t mean that the retailer must just take the money and let the customer be deluged in a swarm of ads. There is nothing more off-putting than that. The big retailers must make sure that they offer a superior kind of shopping experience. They need to delicately balance organic visibility on the one hand with paid media on the other, and make sure, that at all costs, the paid media ad is highly relevant to the shopper’s current mission. Otherwise the whole exercise will bomb.

Retailers must also make sure that they offer brands good deals and good positioning and returns – so brands will decide that this is the best place that they can be where they can invest their slice of the budget.

It would be a great idea for brands to be able to not only target audiences dynamically but also be able to serve ads with dynamically-generated content. Some of the great digital advertising platforms, like maybe Meta and Google allow real-time optimization.

Now with AI changing the game everywhere, AI-powered algorithms can help brands on retail platforms actually run thousands of marketing experiments, making adjustments to various parameters like creative or even audience targeting in real-time to make sure that the most effective ad is served instantly.

That is when retail media will soar. Wait for it!