Retail Media Networks
Retail media’s global advertising revenue is forecast to exceed television revenue by 2028, accounting for 15.4% of total ad revenue. As more people turned to digital channels for shopping during the pandemic, brands followed them, engaging retail media to reach consumers with personalized advertising. Retailers profit from this shift on both ends as they earn money from every product sold and ad spending from brands. As shoppers look to cut down on shopping costs and venture from their go-to stores in search of lower prices, retail media networks and how they approach consumers are more important than ever before.
To discuss this shift in advertising, I connected with Andy Friedland, Chief Revenue Officer (CRO) of Swiftly, unicorn grocery technology platform delivering retail media tools for thousands of brick-and-mortar retailers. With almost 10 years of experience at Amazon, where he most recently led their Grocery Ad and CPG Ad sales initiatives, Friedland was instrumental in scaling their business to billions in ad revenue. His other notable roles include National Account Director at Yahoo and SSE Media & Marketing Solutions at MTV.
Gary Drenik: What are the key factors driving the shift in ad revenue from traditional TV to retail media?
Andy Friedland: There are several factors influencing the shift in ad revenue to retail media, beginning with the data that’s available. The capabilities for data-driven decision making in retail media are robust thanks to the ability to share real, first-party sales data in a controlled and safe environment. Unlike traditional TV, where audience targeting is less complex, retail media platforms provide advertisers invaluable metrics, digging deep into everything from search history to purchase behavior and browsing patterns.
Then, there’s the simple fact that retail media advertising offers more granular measurability and ROI by reporting on things like return on ad spend and ‘incrementality.’ These numbers give advertisers the fuel they need to be agile in their efforts, and the information they need to adjust their campaigns, offers and consumer targeting in near-real time.
The reality is that traditional TV viewership is on the decline, especially among younger demographics who are shifting to streaming services. TV, as we know it, is becoming more fragmented across many CTV platforms, making it challenging for advertisers to achieve the same reach with just one player. Naturally, this challenge has them turning their heads—and their ad dollars—in the direction of retail media’s more promising outcomes.
Drenik: How have technological advancements influenced the advertising landscape within the retail industry?
Friedland: The advertising landscape within retail hasn’t just been influenced by technology, it’s been transformed. Let’s start with Search, which has come such a long way. Its ability to offer sponsored ads in retail media can very easily compete with—or even surpass—Google’s capabilities. Thanks to innovations like Large Language Models (ChatGPT) and a willingness to test and learn retail media is pushing search to the next level.
We’re also seeing omni-channel advertising—which measures consumer interactions through both their online and in-store experiences—gaining traction. Shoppers love a connected experience and they’ve embraced technology to inform their entire journey, from online to in-store. In fact, According, to a recent Prosper Insights & Analytics survey, 27% of shoppers use a retailer’s website for online shopping orders with another 21.1% opting to use a smartphone app. That being said, a majority of purchases are still completed in-store, so bridging the entire experience with the help of technology isn’t just ideal, it’s imperative in connecting with today’s shoppers.
Prosper - Media Used When Planning Online Grocery Order
Which brings us back to data. The ability to use these technologies to drill down into individual customer habits and behavior offers a never-before-seen opportunity to really know the customer and to plan your messaging and position your value prop accordingly.
One more thing to note: we can’t overlook the fact that video content is playing an increasingly impactful role in retail advertising strategies. Having the technology to identify and target customers one-on-one with engaging video content enhances efficacy and reach in ways that advertisers couldn’t have imagined even 10 years ago.
Drenik: With the rise of e-commerce and online shopping, how has the synergy between retail platforms and advertising evolved, and what role does personalization play in this new landscape?
Friedland: E-commerce and online shopping have significantly deepened the synergy between retail platforms and advertising, primarily through rich data capture. According, to a recent Prosper Insights & Analytics survey, 59.3% of Adults 18+ have an Amazon Prime Membership. When you look at the fact that e-commerce platforms capture nearly 100% of transactions—since they involve logged-in users with credit cards—you can see the size of information they’re getting. In comparison, in-store transactions, which may include many cash payments that blind the data, don’t deliver the same caliber of reporting that e-commerce enjoys.
Prosper - Amazon Prime Membership
This wealth of data allows for hyper-personalized advertising, which more and more customers are coming to expect as they point their loyalty toward one retailer over another. The very nature of e-commerce platforms offers more opportunities to showcase ads along the customer journey. This makes it easier to impact the digital shelf more dynamically than in a brick-and-mortar store environment.
Drenik: With the shift towards retail media advertising, how do you foresee the future of TV advertising evolving? Is there anything TV networks can do to remain relevant in this changing landscape?
Friedland: As Mark Twain once said, “The reports of my death have been greatly exaggerated.” The same is true for TV. It’s far from obsolete; content remains king. In fact, there's potential for retail media and TV to be more powerful when used together. TV networks can layer retail media data on top of their programming to gain unprecedented insights into customer behavior. This could lead to more targeted advertising and create new revenue streams that can complement their traditional models, keeping them relevant in the rapidly evolving advertising space.
Drenik: As ad-blocking technologies become more prevalent and consumers increasingly express a desire for ad-free experiences, how can brands ensure their retail media advertising is engaging and non-intrusive yet still personable?
Friedland: While ad-blocking technology remains somewhat niche, the desire for a great user experience is universal. Brands need to find a balance to avoid overwhelming users with ads. Even giants like Amazon have faced some pushback for what some see as an over-saturated advertising environment. Brands risk losing users to competitors if their platforms become cluttered with ads, akin to turning the user interface into a NASCAR/Times Square-like experience. The goal should be to find the sweet spot where ads are engaging but not intrusive, adding value to the user's shopping journey rather than detracting from it.
Drenik: Thanks so much Andy for sharing your insight on the key factors driving the shift from television to retail advertising. As we approach 2028 and beyond, brands should be more intentional about how they’re engaging users through their advertising. It’ll be interesting to see how retail technology platforms continue to evolve and change the industry landscape as we know it.
