5 Questions To Ask Before Kickstarting Your Retail Media Network

The surging revenue potential of retail media networks (RMN) has been evident for some time. The market is on course to grow by 25% each year to $100 billion, with leading retailers finding significant early success – Amazon earned more than $49 million from ad revenue in 2023. These figures provide a clear incentive for other small retailers to follow suit.??

If your brand is considering the benefits of an RMN or has already started to evolve its strategy, consider these five questions to set your organisation up for success.??

1. How can we differentiate our RMN??

As with any business model, differentiation is critical to success. According to research, key differentiators include a high return on ad spend, the availability of a usually inaccessible audience base or an increased sense of transparency and auditability. Retailers providing such differentiators can drive double-digit year-over-year growth and offer advertisers as much as ten times the return on ad spend.?

Whatever its differentiating factor, retailers must ensure their RMN stands out in an increasingly competitive market. For many in the early stages of an RMN, their most significant differentiator may be a highly specific customer base and the opportunity for brands to target this market. For others, it might be their user experience (UX) tailored to a customer group, or its unique inventory.??

2. What data challenges must we overcome??

With the decline of third-party data availability, brands are turning to RMNs to use high-quality first-party data to present customers with personalised, targeted offers. However, collecting, managing and leveraging this data presents a challenge.??

In addition, retailers will have to overcome obstacles to comply with regulations and laws, potentially in multiple jurisdictions, depending on the scale and size of their RMNs. Finally, new challenges may arise following calls for data standardisation across the market, which would allow brands to compare their ad spend and performance more easily across RMNs. For an overview of the potential data challenges, read our expert article here.??

3. How can we measure success??

It is, of course, critical to provide metrics to any brand investing its advertising budget into your RMN so it can track and monitor its success. However, it’s also crucial to measure the network’s success overall. These milestones and targets will naturally vary depending on audience size, revenue targets and performance metrics.?

Defining objectives and intentions early in the life of an RMN provides the best opportunity to measure success, tweak strategies and continue optimising the platform, until you obtain a high-performing platform suitable to both your target customers and brands.??

?4. Should we buy or build our RMN??

This eternal question arises with almost every digital project. However, with an RMN, it can involve unique considerations, including how much control you wish to have over the final network, costs involved, time limitations and technical capabilities.??

Both have benefits: an off-the-shelf solution allows retailers to speed up the process, while building from scratch allows for greater control and flexibility. Read our full article here for a full analysis of the benefits and drawbacks of each option,???

5. What expertise do we lack and how can we fill knowledge gaps??

Retailers must explore the potential obstacles and knowledge gaps they might face before investing too heavily in launching an RMN. Building, managing and growing such a complex platform requires a significant amount of talent, and this might involve hiring staff to handle data, software development and digital advertising.??

To address this question early on, retailers can consider working with a technology partner. An expert in this sector can identify knowledge and capability gaps from the outset, offer strategic support driven by data and provide crucial technical advice.??

For a deeper dive on how to harness technology to seize the opportunity of this exploding market, download our free whitepaper here: Are You Ready To Launch a Retail Media Network??

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