Commerce media networks in general, and retail media networks (RMNs) specifically, are speculated for stunning growth. eMarketer forecasts that RMN ad spending will reach $109.40 billion by 2027. However, to reach that projected growth your RMN may become susceptible to grave risk.
As RMNs diversify to include non-endemic advertising—a key element in actualizing the projected growth—troubling considerations arise. For example, when expanding and diversifying your partnerships, common practices of data collaboration platforms, exposing user-level data in order to build targeted audiences may cause undo business risk.
As a steadily rising number of retailers opt to include a RMN in their offering, the risk of data exposure to a competitor becomes monumental and can have crippling business effects.
How would your RMN be impacted if your data was shared with a competitor?
Business logic dictates that once information is spread, it is up for grabs to be used by competitors, who can build user graphs and monetize on a commerce media network’s innovations and services.
In this article, we’ll address the primary challenges RMNs face when building out the collaboration and activation components of their offering, and what considerations to keep in mind to reduce risk and heighten the growth of your network.
Feeding the buffet: Advertisers’ growing appetite
It’s no secret that RMNs have been identified as a key driver of business growth for advertisers. In fact, RMNs are already labeled the “third big wave of digital advertising,” after the previous social wave (whose prime lasted from 2008–2019) and the search wave (which extended from 2002–2016). While social and search still offer value in wider advertising strategies, retail media is being widely recognized as the most effective method of engaging with a brand’s target audience.
Now as the industry branches beyond retail to wider commerce media, which includes travel and hospitality channels and super apps, in addition to RMNs, the growth potential is all the more enticing.
Consumer packaged goods brands, for instance, aren’t the only advertisers moving increasing amounts of their marketing dollars to RMNs. Non-endemic brands, such as gaming and finance apps, are expanding to collaborate with RMNs. However, incorporating new verticals into the RMN framework requires advanced tools for activation.
Controlled collaboration utilizing a data clean room
Innovation is a funny thing—at times, the hype around a technology can precede the use case itself.
For example, anyone who came of age when “Back to the Future” hit theaters can relate to the hype and excitement around hoverboards. Flying through the sky on a skateboard without wheels invoked lofty thoughts. But when hoverboards actually hit markets the hype didn’t live up to the expectations. The reality of hoverboards was likened to similar technology that already exists, such as Segways.
Let’s get one thing straight—when it comes to data clean rooms (DCRs), this isn’t the case. While hype may have preceded this use case, utilizing a data collaboration platform that is powered by a DCR can provide a trusted environment for collaboration.
A data collaboration platform that runs on a DCR and privacy-enhancing technologies (PETs) provides a framework for networks and brands to build segmented audiences—without either side becoming exposed to user-level data—ensuring that proprietary business information is kept private.
Looking under the hood: Not all DCR- and PET-powered collaboration platforms are created equal
While leveraging a data collaboration platform that is built off a DCR provides monetary benefits, as well as the widely established regulatory and compliance benefits that it offers to global brands collaborating across the world, there are some key considerations to keep in mind to propel both on-site and off-site RMN growth.
Here’s a concise roundup of key questions to ask to determine whether a data collaboration platform will help propel your network growth in this new dawn of commerce media prominence among endemic and non-endemic brands:
1. Does the platform provide flexibility when it comes to provisioning data?
As you move to work with brands from varying sectors, many likely work with different cloud providers. To democratize collaboration with your RMN, it’s critical to choose a data collaboration platform that is both interoperable and cloud-agnostic, to ensure that you’re not stunting business growth due to technical limitations.
2. Does the platform offer flexible yet controlled collaboration?
Different platforms offer differing levels of agility when it comes to controls. Look for a platform that offers a granular and extensive number of definitions so that you’re not boxed into limited controls, which may hinder the ways you can collaborate and the types of partners with whom you can collaborate with. Ask the provider for an extensive list of the PETs they use, and if they continue to release additional ones, to ensure the highest standards of controlled collaboration.
3. What built-in features exist for targeted audience segmentation?
Once you’ve received assurance that the provider offers a cloud-agnostic solution, overlap analysis used to identify shared customers is a great starting point for collaboration. Ask the data collaboration platform provider if there are built-in capabilities to identify characteristics that will assist with segmentation excellence. For example, if a delivery service’s commerce media network is collaborating with a restaurant chain, they may look for a platform that provides built-in customizable segmentation rules, so they can filter based on dietary preferences. Once a few segments are identified, audience indexing and modeling can make all the difference in the campaign’s success and reach.
4. Does the platform offer built-in measurement capabilities that promote business clarity and decision making?
Measurement is a core capability necessary for any RMN’s growth. When KPIs and business goals can be tied back to a RMN’s campaigns it is a clear indicator that the advertiser should continue to invest in that network. To promote this growth and reduce total cost of ownership, opt for one, end-to-end data collaboration platform that offers robust measurement tools. This can include reach and frequency reporting or rich tools to slice and dice data leveraging AI, which can be utilized to refine segmentation and further propel continuous campaign success.
Final thoughts: Measure to new heights
While retail media is primed for soaring heights, conducting due diligence around how you collaborate can make all the difference between driving in the fast lane or getting stuck bumper to bumper. While solving the audience activation challenge is a necessary component for commerce media growth, it is remiss to say it is the only hurdle on the path to success. As touched upon above, a primary challenge commerce media networks currently face is measurement, specifically how to present cross-channel campaign success and effectively measure return on ad spend, customer lifetime value, and more.
As you further refine the standards and requirements needed for the data collaboration platform that will fuel your growth, consider diving deeper to understand the intricacies of their measurement capabilities and the incorporation of AI to extract insights from their data. Investigate further to identify the tools that offer advanced modeling capabilities and flexible or recurring reporting features.
With measurement capabilities built-in, RMNs can help endemic and non-endemic advertisers alike maximize their marketing impact, identify value, and grow their investment with said network.
In this vein commerce media networks can utilize one platform based on PETs as a conduit for future growth. Doing so effectively portrays the value and returns a commerce media network provides to brands through audience activation and robust, closed-loop measurement.
—Edik Mitelman, Senior Vice President and General Manager, Privacy Cloud, AppsFlyer