• by Bill Duggan , August 8, 2024

Unless you’ve been under a rock, there is no escaping the hype of retail media networks. Retail media is the fasting-growing ad channel today and is projected to account for more than one-fifth of total U.S. ad spending by 2027.

A retail media network is a network of digital channels owned by a retailer that allows marketers to purchase advertising space directed by the retailer’s first-party data to targeted shoppers and prospects.

Retail media advertising can include online display and paid search across retailer assets, as well as off-site display, video, and social placements (i.e., to other web and social sites), again targeted by the retailer’s first-party data.

Regarding that offsite activity – to other web and social sites – marketers using RMNs need to pay increased attention.

Off-site activity now accounts for an increasing allocation of spending on RMNs. According to Advertiser Perceptions, off-site retail media spend will account for over a quarter of all retail media spend by 2027, up from less than 10% in 2022. Limited on-site inventory supply is driving the increase in off-site activity, which essentially has unlimited supply.

Given this growth, marketers need to be sensitive to issues including Made for Advertising (MFA) websites and brand safety. Some key lessons in the 2023 ANA Programmatic Media Transparency report apply to off-site activity on RMNs:

Advertisers should recognize that Made for Advertising websites can account for a significant portion of their open web programmatic budget. In the ANA programmatic study, that was 21% of impressions and 15% of spend. Off-site ad placements from RMN ad buys can also have MFA activity. Advertisers need to be aware of that and audit their off-site ad placements from RMN ad buys to understand the amount of impressions and spend represented by MFA websites. 

Know, and then optimize, the number of websites being used for your offsite RMN campaigns. Be especially aware of activity on “the long tail” (identified in the ANA report as all websites outside the top 3000, by audience size).

The long tail of the web adds minimal reach, and likely underperforms in the quality metrics of viewability, IVT (invalid traffic), and brand safety. Per an analysis by TAG TrustNet based on a subset of ANA programmatic study data that compared the long tail to the top 500 domains, the long tail: (a) was 12% less viewable and (b) had 100% higher IVT rate.

Optimizing the number of websites on off-site RMN buys will diminish the risk of purchasing non-viewable and fraudulent inventory and enhance brand safety.

Prioritize the creation and use of website “inclusion” lists versus focusing on “exclusion” lists. Exclusion lists are largely ineffective in practice. 

Attempting to exclude individual sites from the vast expanse of millions of sites, with new domains being created every day, is a herculean and futile task. Curate publisher domains you trust that attract your desired audience. Focus on what you want rather than what you attempt to avoid. Update inclusion lists monthly. Share your inclusion lists with RMN partners.

Use the TrueKPI Framework to ensure that offsite activity from RMN buys meets your quality requirements. To make informed decisions based on price and quality, the project team developed the TrueKPI framework to assist marketers in measuring value and aligning supply-chain incentives with goals. That starts with a metric called “TrueImpression.” These are impressions that meet a set of quality requirements.

The default definition for a TrueImpression is that it must have matched data from the DSP and ad-verification provider, and be non-IVT, measurable, and viewable according to MRC standards. Marketers can define their own custom metric, myTrueImpression, which can include additional quality requirements such as impressions served on MFA websites.

The TrueKPI Framework enables marketers to measure and optimize their ad-spend success in a way that aligns with their specific objectives and should be considered for offsite RMN activity.

Demand to understand the sustainability impact of offsite activity from RMN partners. Sustainability is increasingly important in the advertising space. The longer the digital supply chain, the higher the carbon emissions. 

Advertisers are responsible for more active stewardship of their media investments. Media is often the largest marketing expenditure at most companies.

Spending in RMNs is growing dramatically. Advertisers need to "lean in" and be more active stewards of their media investments rather than delegating that entirely to their agencies. Advertisers which outsource their media management without active internal stewardship do so at their own risk.

Without proper safeguards, retail media network advertising could end up contributing to programmatic media’s transparency issues.

Stories about MFAs dominated the headlines in the advertising trade press in 2023. With the rise of retail media networks and increased offsite activity, let’s make sure that “RMNs meet MFA” is not a big news item going forward.

Fore more information and insights, check out the ANA's “Retail Media Networks: Optimism Tempered with Caution” report.