Retail Media Networks Race to Turn Shopper Data and Video Inventory Into High-Margin Ad Revenue

Retailers are intensifying their push into advertising because retail media can monetize audiences they already paid to attract while generating margins potentially far above merchandise sales. Practical Ecommerce illustrated the economics with a hypothetical $100 product producing a 25% contribution margin, compared with a $1,000 newsletter sponsorship producing $750 after associated expenses, or a 75% contribution margin. Suppliers can also fund advertising with the retailer and then benefit if the promotion increases product sales. (practicalecommerce.com)

That margin opportunity is driving a contest over which retailer, marketplace or financial platform can provide the most valuable audience, inventory and measurement. At Ascendant Network’s Showcase event in New York City, advertising businesses including The Home Depot’s Orange Apron Media, Albertsons Media Collective, DoorDash Ads, PayPal Ads, Macy’s Media Network, Chase Media Solutions, Dick’s Media, Instacart, Chewy Ads, Walgreens Advertising Group and H-E-B Retail Media presented their distinguishing capabilities to agencies and brand marketers. (modernretail.co)

The competition increasingly extends beyond sponsored search placements. Albertsons Media Collective promoted its Rico’s Tacos “micro sitcom,” distributed online and on store screens; Brian Monahan, Albertsons’ retail media senior vice president, said advertising beside the videos exceeded benchmarks by 200%. Walgreens Advertising Group announced digital screens for 1,200 stores, with rollout beginning in October through Looma. Instacart advertising general manager Ali Miller described an ecosystem spanning websites, apps, connected television and in-store screens, supported by Instacart’s marketplace, grocery-commerce technology and Carrot Ads platform. (modernretail.co)

PayPal Ads is similarly linking media and transactions. Senior Vice President and General Manager Mark Grether said PayPal can draw on shopping activity across merchants, PayPal and Venmo. Its inventory includes PayPal’s mobile and web properties, partner connected-TV platforms and programmatic advertising; PayPal also launched off-site ads containing a checkout button for immediate purchases. Dick’s Media, meanwhile, emphasized access to youth-sports audiences through Dick’s Sporting Goods stores, ecommerce operations and GameChanger streaming. (modernretail.co)

For home-shopping programmers, direct-response advertisers and streaming distributors, the shift creates both competition and opportunity. ConsumerEXP analysis: media sellers will increasingly be judged not merely on audience size, but on whether video, connected-TV and store-screen exposure can be connected to shopper data, checkout activity and incremental sales. Retailers’ higher-margin ambitions therefore put greater pressure on television and streaming campaigns to demonstrate measurable commercial outcomes.