Circana, a consumer behavior company, has unveiled the third installment of its revered 2023 FMCG Outlook report series titled Discover The Next Frontier Of Advertising. The report describes the mounting significance of Retail Media Networks in the marketing arsenal of Australian brands and retailers, particularly in light of the imminent decline of third-party cookie marketing.
Alistair Leathwood, Circana’s Head of Product and Solutions, APAC, explains the concept of Retail Media Networks: “Retail Media Networks is the new digital marketing buzz term that every business needs to know in 2023 and beyond. A Retail Media Network encompasses a web of connected media channels, including the retailer’s website, app, email, and offsite ads served programmatically or via partnerships.”
Leathwood goes on, “In a post-cookie world, Retail Media Networks will become an attractive channel to an increasing number of advertisers since high-quality Retail Media Networks provide better methods of analyzing attribution and return on investment (ROI). The challenge for the industry is how to create, manage, and utilize them in a meaningful way.”
The report focuses on areas for brands and retailers, such as reaching Australian consumers through an array of digital touchpoints. Retail Media Networks offer a strategic avenue to connect with consumers when they are most inclined to make purchases, while also delivering privacy-compliant first-party data for precise targeting and effectiveness measurement.
Leathwood says, “Personalization through this process will also encourage customers to buy more items per order, defray delivery costs over more goods, negotiate better deals with suppliers, and tailor goods to local areas. Retail Media Networks have the power to achieve this outcome for brands and retailers.”
The Interactive Advertising Bureau Australia (IAB Australia) conducted research indicating a trend of Australian businesses allocating new advertising budgets to Retail Media Networks. 31 per cent of Australian Retail Media Network investments come from new budgets, with 69 per cent reallocated from other budgets like digital advertising and trade retail.
Leathwood predicts, “It is expected that Australia’s Retail Media Networks market will reach AUD$1 billion by 2025, bringing in up to AUD$1.2 billion in ‘new’ advertising revenue over the next five years. This rapid shift underscores the need for the sector to embrace and comprehend the potential of this new advertising frontier for maximum returns.”
The shift away from third-party cookies necessitates the evolution of advertising strategies. Leathwood asserts, “The decline in third-party cookies due to consumer privacy concerns has resulted in Google’s plan to entirely remove third-party cookies by the second half of 2024. Brands reliant on such advertising reach must evolve their strategies quickly while respecting privacy changes.”
He continues, “The answer is they need to turn to insights in a more comprehensive manner. E-commerce transactions provide greater visibility into the purchasing journey with game-changing, high-quality, first-party data. This data creates huge opportunities in technical and creative innovation, ultimately providing the ability to learn more about customers at a more granular level.”
Circana’s research indicates that retail media is crucial to advertising strategy when third-party cookies are removed, with six in ten marketers affirming this sentiment. Incorporating Retail Media Networks into marketing budgets is an evolving trend, with Australian retailers recognizing their effectiveness in reaching consumers at the right time and space.
Leathwood concludes, “The first-party data available on these fast-growing media platforms can deliver compliant, reliable, safe, and potentially highly personalized data. Retail Media Networks will grow in importance as brands and retailers seek innovative ways to reach and engage customers.”
Circana’s innovative media solutions aim to address these challenges. Leathwood explains, “Circana is the industry leader in helping retailers connect marketing and media activity to sales and merchant activity. The world’s leading retailers and manufacturers turn to Circana to prove and improve the performance of their retail media networks and campaigns while managing complexity and change.”