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The Power of Retail Media Networks for CPG Brands: A Game-Changing Impact on Digital Advertising

Retail media networks have been on the rise in recent years and have had a significant impact on the digital media industry. Retail media networks are digital advertising platforms that operate within e-commerce sites, allowing advertisers to reach consumers while they are actively shopping. This form of advertising is becoming increasingly powerful for consumer packaged goods (CPG) brands as they seek to maximize their advertising spend and reach consumers in a more targeted and effective way.

The Impact of Retail Media Networks on the Digital Media Industry

Retail media networks have disrupted the digital media industry by offering advertisers a more targeted and effective way to reach consumers. Traditionally, digital advertising has relied on third-party cookies to target users based on their browsing history. However, retail media networks are able to leverage first-party data collected by e-commerce sites to target users based on their shopping behavior. This allows advertisers to deliver more relevant ads to consumers and improve their overall ad performance.

According to eMarketer, retail media networks in the US are expected to generate $25.65 billion in ad revenue in 2023, up from $19.14 billion in 2021. This represents a compound annual growth rate (CAGR) of 16.4%. This growth is being driven by the increasing importance of e-commerce and the shift in consumer behavior towards online shopping.

The Power of Retail Media Networks for CPG Brands

Retail media networks are particularly powerful for CPG brands, which have traditionally relied on mass media advertising to reach consumers. By using retail media networks, CPG brands can target consumers with more precision and relevance, resulting in a higher return on ad spend (ROAS).

According to a study by Kantar and Profitero, CPG brands that use retail media networks experience a 54% increase in ROAS compared to those that do not. Additionally, these brands see a 40% increase in online sales lift and a 31% increase in in-store sales lift.

Retail media networks are also effective at driving incremental sales for CPG brands. A study by Criteo found that for every $1 spent on retail media, CPG brands saw a $7.56 increase in incremental sales. This is because retail media networks allow CPG brands to target consumers who are already in the consideration or purchase phase of the buying journey.

Retail media networks are becoming increasingly important for advertisers looking to reach consumers in a more targeted and effective way. For CPG brands, in particular, retail media networks offer a powerful way to maximize their advertising spend and drive incremental sales. As e-commerce continues to grow in importance, retail media networks are likely to become an even more essential component of the digital media mix.

Contact Team Media for all your retail media network questions and consultation, we would happy to help support your efforts and discover if these networks make sense to add to your next campaign.

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