Retail media is quickly becoming a primary promotional channel for brands in key categories around the world. And given the disruption and acceleration of new consumer behaviors, for many brands, retail media is now essential for engaging shoppers. According to GroupM, the category is forecast to exceed television revenue by 2028, with its advertising revenue expected to grow 9.9%, reaching $125.7 billion in 2023.
In Canada, the retail media ecosystem is still in its early stages, but it is the fastest-growing digital advertising category, which mirrors global trends.
While Google and Meta are predicted to command 60.4% of the digital advertising market in Canada in 2023, retail media networks including Amazon Media, Walmart Connect, and Loblaw Media are building momentum with ecommerce-based search and display advertising. One of the primary attractions is the ability to link media exposure to consumer purchase patterns. Google relies on behavioral data, such as search history, and Meta properties provide interests and browsing activity. But retail media has rich, first-party consumer purchase data.
To expand on this, four key factors are influencing the growth of retail media:
- According to an August 2022 Merkle survey, brands in Canada cited first-party data as the primary benefit of working with retail media networks.
- Retail media has a data advantage that fills the void left by cookie degradation and removing third-party identifiers.
- With insights from retail media, brands can better understand the different types of shoppers and what’s driving performance at specific retailers.
- Retail media allows advertisers to deliver more personalized communications when consumers are in an active purchase state.
Perspectives for Consideration
The marketer’s viewpoint:
Marketers see opportunities with retail media to get closer to consumers at the moment of truth in the purchase process. But according to ANA’s Retail Media Network Report, they are also anxious about shifting dollars away from more established brand-building channels.
Shoppers' increased use of digital channels also creates an opportunity for retail media advertising. If done correctly, serving relevant ads when consumers are considering products can be seen as a value add by making decisions easier. And better ad experiences lead to higher brand perceptions overall.
However, to truly understand the short-term and long-term benefits of retail media, marketers want an independent, third-party source to validate that they are getting what they paid for in terms of audience, delivery, and other key performance indicators.
Retailers’ viewpoint:
Retail media networks unlock an additional source of revenue for retailers in uncertain economic times when their core business is being hit by the accelerated cost of living. These environments also increase the value of data that retailers gather themselves.
However, with investment in retail media projected to overtake TV, retailers need to be able to provide media-agnostic measurement not just for the benefit of brands but for better advertising experiences that prioritize consumer preferences and privacy. Sellers of media should work with independent, third-party providers to validate advertising investments. As with other media formats, third party measurement provides comparability to other media sources. They should also provide proof of impact – which helps marketers justify spending and creates better experiences.
Consumers’ viewpoint:
Kantar’s BrandZ data shows that over the past ten years, brand clarity has been on the decline, reaching an all-time low in 2023. This means that brand messages can be muddled. It’s not too surprising given the increase in product choice for consumers and current economic pressures.
When we compare MONITOR data from the two years before the pandemic with the two years after, we see a wide-ranging increase in expectations centered around trust, stress, health, finances, and privacy. And yes, brand-related things, too, like ease of shopping. With elevated expectations for convenience, consumers are embracing new shopping models and behaviors that reduce—and sometimes even eliminate—the friction typically involved in choosing, buying, and receiving products. And that ultimately may impact the environments in which consumers are receptive to ads.
Key takeaways for marketers
Retail media allows marketers to provide relevant experiences at a time when consumers are most receptive to them, creating value and better experiences for consumers. Kantar data has shown that campaigns are seven times more impactful when the audience is receptive to them. However, Kantar’s most recent Media Reactions found that consumers are most concerned about excessive targeting using personal data. And so, marketers also need to be mindful about just how targeted an experience they are creating in these environments.
At Kantar, we help shape future brands by understanding people everywhere. Kantar brings together expertise across retail, media and brand, to help navigate opportunities and maximize your ROI with Retail Media Networks. We invite you to reach out to your Kantar team to explore all that we have to offer in measuring the impact of retail media: Kantar Retail consulting playbooks, Brand Lift Insights (BLI), Custom Analytics Techniques, Unified Marketing Mix Optimization (UMMO).