Are retail media networks the future of out-of-home advertising?

3 min read

Retail media technology is changing the out-of-home advertising space. This article from The Drum highlights the challenges of OOH advertising and outlines how advertisers can leverage digital ads to improve and enhance their marketing models. 

With budgets under scrutiny, advertisers are facing mounting pressure to optimize their ad spend. They’re also grappling with growing data challenges – a result of an increasingly fragmented privacy landscape and shifting consumer preferences.

In response to these challenges, a growing number of brands are upping their investments in retail media. While retail media is nothing new, the ability to buy ads on digitally-connected screens within brick-and-mortar retail locations could make it a vital part of the future of out-of-home (OOH) advertising.

One of the biggest challenges facing out-of-home advertising has historically been the relative difficulty of purchasing media, as compared to other digital marketing channels. Many brands have gravitated to search, social and display which offer the flexibility to quickly scale and optimize campaigns.

In comparison to the ease of buying, cost efficiency and measurement of digital ads, OOH advertising buying and measurement is severely lagging. With the increase in outdoor digital screens and programmatically purchased OOH, buying and efficiency are improving.

For instance, in August, Google’s integration of digital out-of-home ads into its Display Network and Google 360 made out-of-home easier than ever for brands to purchase, rapidly expanding the availability of programmatic digital out-of-home ad offerings. The Trade Desk and other demand side platforms (DSPs) also offer OOH programmatic offerings.

With measurement, retailers are at the forefront of bringing programmatic OOH ad buying closer to the realm of performance media, connecting data like purchases and sales lift directly to ad buys.

As one example from late 2021, Walmart Connect launched its new demand-side platform, Walmart DSP, in collaboration with The Trade Desk, to expand its off-site media offerings. In-store advertising on TV walls and at self-checkout registers are two of the digital signage offerings that brands can purchase through Walmart DSP. Walmart Connect's closed-loop measurement can verify when self-checkout ads influence a later in-store or digital purchase.

In another recent example, Amazon launched digital OOH displays through its Amazon Fresh stores in late October. Brands can programmatically purchase ads on these displays using Amazon's DSP. Campaigns can target specific store locations, time of day and even the location of the digital signage within the store (such as the aisle category it is in). Amazon Ads provides an impression report and sales lift analysis for Amazon Fresh stores to help brands optimize campaigns to sales growth.

At present, retailers and technology vendors are not focusing on one-to-one personalization or tracking for most of these placements, with the exception of checkout ads that are tied to an account. Instead, the focus has been contextual targeting, brand awareness and overall reach.

Computer vision offerings could play a big role in attribution and targeting in the future. As brands experiment with these placements, they should incorporate them into their marketing mix modeling over time. Another measurement option that’s now available to brands is matched market testing where brands identify a basket of stores that align to the entire footprint of a retailer to do testing of different A/B testing of advertising strategies and channels.

Compared to more traditional on-site retail media, the lack of attribution offered by OOH retail media network placements may frustrate some brands. However, the brands that can benefit the most from physical retail digital signage are in categories that are not as frequently purchased through ecommerce. Grocery is a key category of focus for Amazon, Walmart and many other retailers that have launched digital signage inventory. After all, the vast majority of grocery purchases are still made in-store.

Many brands and retailers are looking at in-store OOH as the next generation of retail marketing and as a complement to promotional shelves, endcaps and other retail fixtures. Brands can use the unique ability of digital store signage to remind customers of their brand and influence point-of-purchase decisions during the key conversion part of the shopper marketing funnel.

Marketing and advertising leaders must learn how to navigate (and capitalize on the opportunities of) retail media buying as it quickly becomes a larger part of a company’s digital ad budget – Gartner estimates it will reach roughly 20% of marketers’ media budgets in 2023, and grow to a quarter in the next few years.

Marketing and advertising leaders can take the following steps to leverage retail media and in-store digital out-of-home:

● Reach out to retail partners about the potential to expand existing merchandising and trade partnerships to include digital retail media, both onsite and in-store/

● Consult with their in-house team, advertising agency or media buyers about supporting the buying and measurement of retail media and digital out-of-home via existing tools like DSPs.

● Investigate independent technology and service partners in the performance media space that specialize in retail media, digital out-of-home or both.

Additional contribution from Mike Froggatt, senior director analyst at Gartner.

 

This article was written by Brad Jashinsky from The Drum and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

TAGS: DIGITAL SIGNAGE