The Next Frontier of Retail Media.

Authors: Samantha Pearlson and Fai-keung Ng, The Trade Desk | Members IAB SEA+India Retail Media Regional Council

As brands strive to reach their target audiences with relevant messages and personalised experiences, retail data has emerged as a powerful tool to achieve this goal.

In the IAB SEA+India’s 2023 research report, the State of Retail Media Advertising in Southeast Asia, commissioned by The Carousell Media Group, it was highlighted that 99% of respondents will increase their spend on retail media over the next 12 months. As well as this, 78% will use retail media data for off-platform targeting on new formats such as Connected TV (CTV). These numbers indicate that Retail Media will be a major priority for brands in 2023 and beyond.

In the same report, respondents said that purchase data, targeting and attribution are among the four key features of retail media. These are the main features of off-site retail media, and another clear sign pointing to the prioritisation of off-platform programmatic.

In this post we will explore the opportunities of off-site retail media as well as the benefits to advertisers in having a holistic retail media strategy.  

Examples of on-site retail media; source: Shopee

There are downsides to on-site retail media that include a limit in scale, both on the data and the media inventory side, as well as a lack of upper and mid-funnel coverage.

In addition, there are limitations for non-endemic brands (brands that don’t sell directly through retailers but offer complementary services or products such as finance, travel, automotive or telcos) in leveraging all that retail media has to offer.

The solution lies in off-site (off-platform) retail media

Off-site retail media is the use of retailer-owned consented first party data to target customers based on their purchase history, even when they are browsing outside of a retailer’s ecosystem, giving brands an unprecedented level of precision when it comes to audience targeting.

Combining retail data with an omnichannel media strategy will allow brands, both endemic and non-endemic, to reach their best audiences at scale, and be able to measure campaign effectiveness.

Components of full off-site retail medie cycle

With retail data solutions, using an off-site media platform like The Trade Desk / Criteo / Facebook and the like, advertisers not only get access to valuable audience segments for effective targeting, but they can also enjoy transparent reporting and closed-loop measurement through partnerships with leading retailers. By collecting data from loyalty programs and purchase data, brands can connect their digital campaigns across various channels, including CTV, and measure the impact on online and in-store sales. With this level of accountability, it is possible for brands to make data-driven decisions to optimise their campaigns and drive better results.

In APAC, we’ve seen brands, like Coke and Yumi’s, leveraging various off-site retail solutions with initial success.

Components of activation only off-site retail media

The other form of off-site retail media is to use retailer data just for the targeting / campaign activation. This is typically more suitable for mid and upper funnel campaigns, whereby the landing pages are brand.com or microsites, for driving non-sales related KPIs. This version of off-site would also allow more adoption from non-endemic brands(e.g. insurance, credit cards, travel) because they don’t typically sell their products through the retailers. In a blind study, an insurance brand found retail data reduced its quote engagement by more than 8 times.

With the large audience reach of the off-site media platforms, it’s also common that Lookalike (LAL) audiences be built using the retailers’ first party data as seed data and modelling capabilities of the off-site media platforms. Such practice increases the audience scale and makes the audiences even more pertinent to mid to upper funnel campaigns.

On-site and off-site as a holistic retail media strategy

Retail media revolves around inventory and data. Inventory provides advertisers with reach and eyeballs across a range of a retailer’s own physical and digital assets. Data enables the deep insights into a shopper’s behaviour that sets retail media apart.

Off-site retail media complements on-site retail media through the increased scale provided by omnichannel media outside of retailers’ own assets. This also aligns with the advertisers’ desire to reach their audience across multiple channels with retailers’ data.  As retailers’ data is now available off-site, there are more opportunities for retailers to tap into the upper to mid-funnel, as well as non-endemic marketing budget.

In summary

While at an even more nascent state, off-site retail media presents an opportunity to expand the application of retail media to a wider scope of marketing use cases and a mutually beneficial relationship between brands and retailers through:

• Full funnel engagement with brands

• Allowing non-endemic brands to tap into retail media

• Providing retailers traffic in-store and online

• Developing data-rich strategic partnerships with both endemic and non-endemic brands

• Bigger JBP commitments via more investment options with endemic brands

• Developing lookalikes to increase audience scale, with the modelling capability of off-site media platforms