Local media offer opportunity in the age of retail ad networks

By Matthew Snyder

ResponsiveAds, Inc.

New York, USA


It is hard not to notice the rise of the retail ad network disrupting the business grip currently held by the duo-poloy of Meta and Google. This rise feels like it is part of the perfect storm of the changing advertising landscape.

There is plenty of room for innovation. Amazon has been the rising star, and there’s now a tri-opoly. However, many others are following suit.

Over the last decade, search and social grew into US$30 billion markets in the United States. By contrast, retail media reached that threshold in 2021 — five years after it was a small, sub-US$1 billion market.

Factors affecting this change can most certainly can be attributed to the following:

  • The importance of privacy legislation, fraud, and content, which has changed the first-party data, third-party data, and strategic spending landscape.
  • Effects of the COVID-19 pandemic, which drove more users online.
  • Attribution and purchases through retail media’s ability to directly tie ad spending to sales.

Effects of privacy legislation

According to Marketing Charts, retail media is at the top of the list of things that affected privacy legislation. This includes user privacy (such as in the case of GDPR in Europe and CCPA in the United States), a changing browser landscape with the deprecation of the third-party cookie, and the driving forces on mobile (such as Apple’s own emphasis and policies around user data access and opt-in on mobile).

This is most likely the year that defines first-party, data-focused adoption strategies by publishers and retailers. This has not only been an opportunity for building better direct relationships with audiences, but the personalisation of curating lists, offers, and recommendations is even more important. Brands and marketers want to buy into that.

According to a report by McKinsey & Company, marketers and companies that do not figure out a strategy to access first-party data may have to spend 20% more on marketing and sales to generate the same returns.

This can be a direct correlation to retailers that are looking at more efficient ways and new revenue streams for their consumers and audiences. This is despite the fact more than two-thirds of users today feel their data is not being used responsibly. Yet, when asked about the use of their data for personal value, there is an overwhelming majority.

Effects of the COVID pandemic driving more users online

The effects of the COVID pandemic is a shock to the system. It drove the acceleration of online and digital. But, even though there has been some level of return back to the norms of physical brick-and-mortar buying behaviours, the fact remains the digital stimulus of consumers buying online are here to stay. 

The following chart shows the effects of online buying behaviour up 160%.

Attribution and directly tying ad spending to sales

The power of retail publishing becoming more involved in the media process is that it enables the ability to directly link any media or ad spend directly to sales. This is the so-called holy grail of “closing the loop.”

The September 2022 report from Perpetua shows the power of Amazon, and its now vertically integrated products that serve the entire funnel. It has built a product strategy incorporating the entire purchase funnel.

Other major retailers (like Walmart and Instacart) have jumped into the ring very aggressively. But this extends down to the long-tail retails from national to local, including Kroegers, Walgreens, CSV, Target, Home Depot, and Macy’s.

They are changing the game of merchandising by enabling solutions from products and brands to buy within their network. They offer the complete “purchase” tracking driven by first-party data strategies. This not only becomes a viable solution to the deprecation of the third-party cookie, but it also offers better direct-to-consumer experiences and personalisation.

Opportunities for local news publishers

Although news content might only fractionally cover retail news and media, the retail networks are critical revenue drivers for local media publishers. They are the cornerstone for local consumers buying in physical brick-and-mortar environments.

Even thought there was a “spike” in growth in 2020, the overall amount is still in the 20% range. This leaves 80% still oriented toward physical retail. This is a great opportunity to ride on the growth wave with strategies oriented toward working with retail networks.

Here are some strategies for local news media when moving forward:

  • Develop supply strategies and inventory allocation directly for retail network demand.
  • Offer the opportunity for first-party data alignment (evolving, of course, with privacy legislation).
  • Offer your own suite of retail ad units for local retail media to use.
  • Develop more consumer-centric approaches with “offers” and “sponsored deals” for local audiences.

Examples of innovative shoppable ads

Here are several examples of the shoppable units that can be leveraged quite easily by local news publishers when working with e-commerce, retailer partners, or even networks.

• Carousel (with dynamic feed): Share products in a carousel form. Click directly to product pages. New products are dynamically loaded through product feeds that can be filtered by targeting or first-party data strategies. Carousels offer an opportunity for higher click-through rates as users can click “shop.”

• Interactive image and carousel (with dynamic feed): Create engagement with an interactive image linked to products. This is not only great for performance, but it also creates more awareness with a big, beautiful image.

• Video and carousel (with dynamic feed): This is essentially a carousel unit, but it has a companion video to complement the products shown.

• Shoppable pinpoint video: Create engagement with an interactive video linked to products. This is not only great for performance, but it creates more awareness with big, beautiful videos.

• Shoppable video gallery: Create high-impact videos to sell a variety of products. These are shown in gallery form.

• Full-bleed video: Deliver impact with a video to showcase the product for sale or retail.

About Matthew Snyder

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