Globally, 82% of consumers now say they use two or more digital touchpoints during their journey. While this is good news for online brands and retailers, the number of e-commerce sellers is also up — and it’s getting pretty crowded.
Perhaps you’ve noticed an increase in channel competition in recent months. On Amazon alone, more than 1.9 million active sellers are vying for consumer attention.
Is there any hope of standing out in 2023, especially amid an impending recession?
Retail media advertising offers a tangible, data-based way to put your brand front and centre.
The Retail Media Opportunity in Europe
Retail media is a broad term used to describe any advertising on retailer sites and apps. As consumers rushed online in the face of the pandemic, retail media, changing market conditions and shifts in the marketing landscape saw a rapid rise in retailer-specific online advertising opportunities.
For example, online sales now comprise 28.3% of retailer revenue in the UK and 18.1% in Germany. In these markets especially, there’s a significant retail media opportunity, as available inventory is proportionately higher.
In the US, nearly every major retailer now has a retail media network (RMN), including Amazon, Best Buy, eBay, Target, Walmart and Wayfair — and new entrants are joining every year. Amazon is no doubt the king of RMNs, paving the way for smaller networks with a host of advertising offerings and regular enhancements to increase search relevance.
- In 2021, Amazon’s sales grew 42% and generated over $350 million
- US Amazon retail e-commerce sales are forecasted to be 39.5% of US e-commerce sales
- Third-party sellers sold roughly $390 billion, a 30% increase from the previous year
While the US is leading the way, European RMNs are headed toward major growth. In 2021, digital retail media advertising spending in Europe stood at nearly €8 billion, which is projected to triple by 2026, reaching an estimated €24.8 billion.
Already in the UK, retail media is growing by 10% year-over-year. RMNs like Tesco, Asda, Sainsbury’s, Morrisons and Boots are heating up with offerings like social media partnerships, rich data from loyalty cards and cross-channel promotion (including offline).
The problem is, more opportunity means more players. To stand out in the coming year, brands must cut through the noise with a targeted advertising strategy.
5 Strategies for Retail Media Success
There’s no question about it. If you want to get your products in front of purchase-ready shoppers, retail media advertising is crucial. But it’s not a “set it and forget it” kind of strategy. Winning at retail media takes regular planning, monitoring and assessment for the networks and opportunities that work best with your brand.
In 2023, these five strategies will deliver key differentiation in an increasingly crowded space:
- Consider New Channel Options
With so many channel options and other brands shouting for attention, a standard listing strategy is simply not enough. As you start a new year, assess all the retail channels you currently sell on, and consider where you might expand (or exit) based on your target audiences’ changing shopping preferences.
If the majority of your advertising budget currently goes to Amazon, consider testing other, more local or niche marketplaces where you could gain greater traction and revenue with a smaller investment, which in turn can have a positive impact on profitability. According to a study by McKinsey, 80% of advertisers currently use at least one retail media network in addition to Amazon.
- Showcase Your Brand with a Marketplace Storefront
Your brand identity, tone and product information play a crucial role in how consumers perceive your business. Yet, marketplace product listings don’t always allow for extensive customisation. Setting up a marketplace brand store helps you:
- Improve your organic product ranking
- Expand coverage with keyword and product targeting
- Increase organic sales from users coming from the byline on product detail pages
According to Amazon, stores with three or more pages enjoy 32% higher attributed sales per visitor and 83% higher shopper dwell time. Just remember not to let your marketplace storefront go stale. Continually update and optimise your store pages so the marketplace can increase its relevance in customer searches.
- Be Selective About Ad Placements
Where you choose to place your ads lets RMNs know how aggressive you want to be. Defining your ad placement preferences can fine-tune your performance. Choose from:
- Top of search — Top of the first page of search results
- Rest of search — Below the first fold/page
- Product pages — On product detail pages
Some positions work for certain brands or products, but not others. Test your placements and adjust your bids regularly based on the data you collect.
- Automate Your Ad Management
You may not realise it, but manually managing ads takes extra time and money you could be spending elsewhere. Humans are prone to error and take longer to create or update campaigns amid other work and distractions. Automation not only saves time and effort, but can affect your seller rank, driving sales for products that are almost out of stock. This is especially helpful for brands with a larger catalogue who implement more campaigns.
Just set your campaign goals and target performance, and let automation help you improve:
- Budget allocation
- Priority assignment
- Strategic bidding
- Campaign efficiency
- Win Against Competitors
Each marketplace has its own “flavour” and target audience. You may go up against big names, or you could face several non-branded listings at competitive prices.
- Be selective with your catalogue. Promote products that differentiate you from the competition in categories like review scores, price and quality.
- Keep competitive campaigns separate. Don’t add competitive targets to your branded and non-branded campaigns. Instead, keep them in their own dedicated campaigns.
- Refrain from adding all competitors to one campaign. Advertise products with the best reviews or price point to better tailor your messaging and enable higher performance.
Best Practices for Amazon and eBay
As established leaders, Amazon and eBay represent some of the largest RMNs in the world. Each offers a unique mix of ad formats to appeal to a variety of brand needs.
Sponsored Products are keyword-targeted, cost-per-click (CPC) ads that are designed to promote individual listings and drive traffic to product detail pages. They typically provide higher-quality clicks on your listings and can yield a much higher ROI than other CPC programs.
Sponsored Brands are available to third-party retailers enrolled in the Amazon Brand Registry program. These ads are often found above the search results and can be a great way to introduce your products to shoppers when they’re looking to discover new items and brands.
Sponsored Display Ads allow you to target shoppers on and off Amazon who have previously viewed your products. They can deliver highly relevant ads to consumers with certain interests or to shoppers who are actively viewing specific items.
A combination of these ad types and best practices is ideal to win on the world’s largest marketplace:
- Start small with some of your more popular products, and gradually build based on their success.
- Experiment with various combinations of Sponsored Products, Sponsored Brands and Sponsored Display ads to discover what works best.
- Take advantage of optimisation features, such as dynamic bidding and targeting by Amazon Standard Identification Number (ASIN).
- Protect against predators by increasing bids on any key brand-related terms.
- Give branded words their own campaigns since there are huge performance differences between branded and non-branded search terms.
eBay’s Promoted Listings Standard charges are only assessed when a buyer clicks and purchases the advertised product. The offering even provides guidance on performance to help you improve results through guided optimisation. Use this ad type when your main goal is visibility and your media budget and resources are limited. While it does not
allow for much control over performance, it’s great for maximising visibility without sacrificing ROI.
Promoted Listings Advanced campaigns are pay per click (PPC) ads that offer premium position targeting to appear in the top slots of search results. Advanced management features allow you to utilise keywords, allocate budget by campaign and build a tailored bidding strategy.
This campaign format requires a higher investment and greater resource allocation. However, if your goal is sales growth and return on ad spend (ROAS), Promoted Listings Advanced can help you improve budget and ad account control while increasing campaign effectiveness.
The Time is Now for Retail Media
RMNs provide a unique opportunity for brands and retailers to move beyond traditional (and sometimes struggling) advertising channels and appeal to increasingly digital buyers in a relatively easy way. In Europe, this opportunity is especially ripe as new networks come online and country-specific markets mature.
As competition thickens and economic uncertainty looms, the key for winning at retail media advertising is to tailor your approach to the RMNs and best practices that will appeal most to your audience. Regardless of who they are, e-commerce advertising is a safe bet for reaching large audiences at once.
You can meet the author during the E-commerce Berlin Expo 2023: