Summary
Retail media will grow significantly in 2024, expanding to include diverse advertising strategies across the consumer journey. This full-funnel and omnichannel evolution will challenge brands to adapt their approach, creativity, data use, and budgeting to stay competitive in a rapidly changing market.
2024 is going to be a pivotal year for retail media. Advertisers are now fully engaged and ready to max out their investments, making it one of the fastest-growing ad spending channels in marketing history. At this pace, its minimum yearly growth rate of 21% through 2027 will surpass social media spending before we reach the next decade.
In response to marketer interest, retailers are figuring out new ways to capitalize on these high-margin advertising revenue streams. To date, the majority of retail media spending has been on bottom-funnel search ads, with some mid- and upper-funnel ad options offered by channel leaders such as Amazon Ads and Walmart Connect. This year, retail media networks (RMNs) will push the omnichannel envelope and innovate up the funnel with new ad formats, placements, partnerships, and ways to leverage commerce data outside their walls.
Up the funnel! Off-site! In-store!
Retail media is growing in every direction and becoming omnichannel.
How will your brand answer these emerging retail media questions?
This robust growth presents both opportunities and challenges for retail media advertisers. 2024 will require marketers to evolve their practices to handle this expansion and answer new questions such as:
- Management: Is your hands-on keyboard team ready to handle the new opportunities in omnichannel retail media? What’s your optimization schedule? Are your existing agencies and platforms the right partners for this push?
- Creative: Is your omnichannel marketing strategy aligned with the new formats coming to market? Do you have the creative expertise and teams to meet these emerging needs? What will be the cost to build against these new creative specs?
- Data: How effective is your brand at using commerce data? Do you have the necessary tools and partnerships to leverage this data both within and outside retail platforms?
- Expertise: Is your brand prepared to adopt the new full-funnel features and partnerships that major retailers will introduce? What’s your roadmap to build this expertise? New hires? New agencies?
- Strategy: With omnichannel retail media able to address every stage of the consumer journey, does your brand have a strategy for engaging consumers from awareness to purchase? What is your POV on retail media CTV? DSP? Off-site advertising? How do they interact with your existing investments in other channels?
- Measurement: What is the right approach to correctly measure omnichannel retail media placements? Do you have the data science foundation to test and learn faster than your competitors?
- Budget: Where are these new budgets coming from? Given the projected growth in retail media ad spending, is your brand prepared to allocate the necessary budget and resources to remain competitive?
Four areas of omnichannel retail media expansion you need to be ready for
Skai’s latest report, The State of Retail Media 2024, marks our third annual survey on retail media’s evolution, offering insights into its dynamic landscape, including trends in which way retail media is headed. Check out that report to learn what retail media professionals shared about success metrics, strategic plans, and more.
While plenty of innovation is coming that we don’t know yet, there are four directions we shared in our State of Retail Media 2024 report regarding which way retail media is expanding.
What’s your plan for each of these?
Retail media continues to move up the funnel
While retail media ads above the bottom of the funnel aren’t new, offering more mid- and upper-funnel ad inventory is certainly where RMNs are headed. Full-funnel solutions enable brands to engage consumers using retailers’ first-party data at all stages of their journey, from awareness to purchase. This will bring new efficiencies for brands as they buy, target, and measure their media. For retailers, this means garnering a larger slice of budgets and driving growth.
Retail media is growing outside of its digital walls
Part of the push to an omnichannel retail media plan will include more off-site ad placements and a renewed focus on expanding existing ad formats like DSP, CTV, and streaming audio ads. Retailers will also unveil more digital signage in-store to integrate online and offline experiences. This convergence of traditional shopper marketing and retail media connects both sides of the house, helping brands and retailers streamline their business relationships. Also, in 2024, we may start seeing early entries in stand-alone shoppable ad units that can be placed in any digital environment. It will one day be commonplace for consumers to purchase directly from ads without visiting a retailer.
Retail media is branching out with partners
Everyone’s trying to get in on the success of retail media. Last year, Amazon announced partnerships with Facebook and Instagram, while Microsoft inked deals with TikTok — and they both now work with Snapchat. The evolution? In-app checkout and sales tracking will integrate retail media with social media, creating opportunities for both sides. And it’s not just the two most prominent retail media players; Kroger signed a deal with Pandora. Not only will these relationships be a big win for retail media networks to grow into new arenas, but they will also help get social commerce off the ground – finally. Look for more of these bridges to be built in 2024.
Retail media data will be powering other channels
It’s no secret that the most critical ingredient to retail media success is the commerce data that powers it. The big turning point will be when Google completely deprecates the third-party cookies, making retailers’ first-party commerce data even more valuable than it is now. As retailers continue building data integrations within the ad ecosystem, marketers will be able to utilize these signals to drive decision-making to enhance each phase of the campaign lifecycle: researching, planning, creative, targeting, bidding/buying, measurement, and optimization.
Do you have the right tech foundation in place for 2024 and beyond?
Skai’s Retail Media solution empowers marketers to plan, execute, and measure digital campaigns that meet consumers when and where they shop. As part of our omnichannel platform, you can connect the walled gardens and manage campaigns on 100+ retailers, including Amazon, Walmart, Target, and Instacart, alongside major publishers across paid search, paid social, and apps.
Our client success stories include:
- 461% increase in Amazon Ads ROAS and 57% increase in page traffic for Bondi Sands
- 92% increase in share of voice on Amazon for a Fortune 500 CPG brand
- 72% increase in revenue for VTech
- 1,390% year-over-year sales growth for Kamado Joe
The future of retail media is bright but will usher in new omnichannel complexities that your current tech solution may need help to handle.
Omnichannel marketing requires omnichannel tools like Skai Decision Pro. To transform omnichannel decision-making, make quick and confident decisions about where and how to invest your media budget.
