In today’s booming e-commerce market, retailers have found a valuable opportunity in selling ad spaces. Brands can now capture the attention of shoppers across the entire customer journey, while retailers can enjoy a new income stream in a competitive landscape.
With the Australian retail media sector expected to grow to a $2 billion market by 2026 and an estimated $1.2 billion in fresh advertising revenue to enter the market from 2022 to 2026, the challenge for retailers is to strike the right balance between customer experience and revenue growth.
The Trade Desk director of data partnerships Isabella Spragg believes changes in media consumption and impending deprecation of third-party cookies are changing the way data is being used for advertising.
“Today, major retailers are sitting on a treasure trove of valuable opt-in shopper data. This includes shopping cart contents, use of loyalty programs, and spending history. In a world where marketers are facing changes to targeting customers online, shopper data has become extremely valuable,” she told Retailbiz.
“As retailers look to monetise their advertising offerings, retail data has emerged as a source of additional revenue. This rich data set provides marketers the closed-loop measurement of ad spend to real-world sales. Brand marketers can leverage this shopper data to deliver targeted ads on the open internet, beyond the confines of retailers’ digital platforms.
“With the impending deprecation of third-party cookies in Chrome, advertisers are seeking new ways to rely on loyalty and e-commerce data for safe and effective targeting, making retail data a crucial component in media plans.”
Retail data often includes signals from in-store purchases and loyalty programs built from deterministic identifiers, providing a longitudinal view of the consumer. This data can often be highly customised based on regionality, demographics, and past purchase history.
“For brands with a nascent first-party data presence, retail data could be what extends their message to the right consumer at the right time. Alternatively, for brands that have already established their first-party data, retail data can add precision and scale to existing strategies while uncovering innovative ways to reach new customers,” Spragg explained.
The Trade Desk recognises that retailers and brands rely on customer trust and the company is committed to upholding this trust. That’s why UID2 was designed, an open-source, secure and privacy-conscious identity framework that works across digital channels and enables retailers to share shopper data with advertisers in a scaled way.
“UID2 is integrated into The Trade Desk’s platform and turns emails or phone numbers into pseudonymous identifiers, enabling advertisers to target specific audience segments for hyper-relevant campaigns.”
Target Australia activated Unified ID 2.0 (UID2) on first-party data and used this data as seed audience to facilitate lookalike targeting.
“The approach allowed them to identify and direct their advertising to net-new customers who may share similar traits with their existing customers across the open internet. The campaign successfully yielded a 66% higher conversion rate at a 36% lower cost-per-action, compared to third-party audience targeting.
“This is how new identity solutions are helping marketers drive holistic, omnichannel campaigns to reach consumers in a privacy-conscious way across the fastest-growing channels on the open internet.”
How shopper data is redefining growth
The Trade Desk released a new report, which spotlights how two dynamic forces are redefining the value of retail data – the drive of future-proof advertising strategies against market shifts and building lasting bonds with customers in a privacy-conscious way.
“This powerful combination is opening doors for brands to fully leverage the potential of the open internet, spanning across CTV/BVOD, digital audio, online gaming, websites, and apps. As consumers spend more time on channels like TV streaming and audio platforms, the significance of retail data becomes more apparent,” Spragg said.
“Pairing authenticated ad inventory, such as digital audio or streaming services, with verified retail data offers advertisers the opportunity to engage customers earlier in their shopping journey. Instead of waiting for customers to visit stores or retailer websites, retail data enables advertisers to identify customers streaming content and drive them down the funnel towards purchase.”
Looking ahead, retail marketing will centre around the omnichannel shopping experience because marketers want to better understand consumer behaviour and navigate the path to purchase, while tapping into the fast-growing channels on the open internet, according to Spragg.
“Over the past two years, savvy retailers have come to realise valuable shopper data presents a new revenue opportunity within brand marketing budgets. Retailers’ involvement in this new landscape depends on how far along they are in their digital transformation journey. Do they possess the necessary consent and resources to utilise their data for advertisers? Where do they stand on the data and digitisation maturity model? How can they best capture the convergence of shopper and brand advertising dollars?
“Many retailers here are refining their strategies to unlock the value of their shopper data. While their approaches may vary, the goal remains the same: leveraging rich data sets to better connect with consumers through relevant advertising.”