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How Retail Media Can Capture Ad Spend in an Increasingly Crowded Market

By:
Polina Melnikova
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October 20, 2022

For over a decade, any advertising based on search results was bought through cost-per-click (CPC). After all, this is still how Google makes most of its revenue today. 

The idea here is simple: advertisers only pay when their ads are clicked. This model made sense and de-risked advertising, especially when clicks were relatively inexpensive. As such, retail media was quick to embrace this platform content monetization model.

But this model is going out of date. CPCs keep rising on major channels, especially as platforms like Amazon look to drive up prices to increase ad revenue. That means there is an opportunity for other marketplaces to become attractive, affordable ad dollar investment media for merchants.

How Advertisers are Thinking About Retail Media

Retail media is one of the fastest growing segments of the digital advertising ecosystem, and many leading brands are eager to invest in these kinds of ad placements. In Europe, the Middle East, and Africa (EMEA), major brands are now buying ads on at least eight different retail media platforms on average.

The dominant channel, unsurprisingly, is still Amazon. That’s because it provides pre-built, automatically generated reports, in addition to the standard reporting dashboard. Whereas most retail media platforms (RMPs) provide basic data like total ad spend and overall return on ad spend (ROAS), Amazon offers merchants insights like performance data by product category and average winning bid report. 

Despite the deep insights and reporting, merchants and brands want to diversify their channels. But in reality, it’s not sustainable for merchants to use numerous different platforms, especially when each has different reporting capabilities. Ultimately, most of them don’t invest a lot – or at all – in other retail media platforms because they don’t provide enough data insights.

This issue around insights (or a lack thereof) is especially important in a region like EMEA, where advertisers need to run campaigns across dozens of different languages, geographies, and platforms, and navigate stringent data regulations to achieve full regional coverage. Without quality data and a certain level of automation, it’s incredibly difficult for advertisers to reach their audiences at scale.

Putting It All Together

It is important that RMPs provide brands with quality data to justify their investment. As Insider Intelligence indicates, digital ad budgets are under more and more scrutiny. Advertisers want to not only diversify their spending, but also see quality, repeatable results from their investments.

For retailers and marketplaces looking to capture ad dollars, insights is a key way to stand out. By offering in-depth reporting and data on both shopper behavior and campaign effectiveness beyond just cost per click, retailers and marketplaces can make their retail media platforms a must-buy for merchants.

Bucketplace’s oHouse, a leading Korean e-commerce platform in the home and lifestyle space, demonstrates this paradigm in action. In addition to ad spend and ROAS, its retail media platform provides conversion, click-through rate, and impression data, among other granular insights – not only on campaign but on an item level too.

Providing robust reporting and results, not just basic data on ad spend, can be a great way to do this. According to Bain & Company, robust reporting is a  key buying criteria for marketplaces when choosing a retail media solution, and is still a gap in many RMPs.

Moloco enabled marketplaces like Bucketplace to launch a retail media platform on oHouse that drove rapid time to value through insights – head here to learn more about Moloco RMP.

Polina Melnikova

EMEA Account Manager, Moloco RMP

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