How agencies’ relationships with RMNs are continuing to evolve in 2023
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As retail media networks proliferate, agencies are increasingly identifying RMNs as valuable opportunities for their brand clients as they seek quality audience data, meaningful reporting and insights, and authentic and engaging ad formats and creative. However, there are many options for them to work through as they select RMN partners.
According to WARC’s Marketer’s Toolkit 2023, retail media is the fourth-largest advertising medium, with an ad forecast of $121.9 billion globally this year, up 10.1% from the previous year. Additionally, research from Digiday and Best Buy Ads found that 20% of agencies expect to allocate 21%-40% of their budgets to retail media in 2023, and 10% of agencies expect to allocate 41%-60% of their budgets to retail media in 2023. However, 27% of agencies are unsure how to get started with RMNs.
“It’s hard for many agencies to understand the entire ecosystem of retail media networks,” said Megan Stevens, partner and category marketing director at Best Buy Ads. “Understanding the wide range of offerings out there can be daunting, and the execution varies greatly across each retailer. Retail media is a viable option for every agency, but currently, the process doesn’t always line up with the ways they are used to buying from publishers.”
RMNs are addressing challenges that agencies are facing in 2023
To prove their value to clients, agencies are leaning on advertising solutions offering specific and granular reporting levels — including RMNs. This allows agencies to track real-time campaign performance and make data-driven decisions.
Providing ROI on media spend is especially critical for agencies in an environment where budgets are scrutinized heavily. Stevens also noted that various agency types, including full-service agencies and those under major holding companies, are having an expanding number of conversations with RMNs as they focus more on optimizing return on ad spend or cost-per-acquisition.
In Stevens’ experience, brands are seeking agency partners that collect and leverage first-party data sets to target customers on retailer websites and elsewhere more effectively. With the deprecation of third-party cookies looming, RMNs’ access to valuable customer data — including purchase history, browsing behavior and demographic information — is becoming even more critical for agencies to target specific audiences accurately and efficiently.
According to research from the Association of National Advertisers, 56% of brand advertisers consider leveraging first-party data as a “very important” opportunity for RMNs. Furthermore, Digiday and StackAdapt found that brands are also leaning on agency partners for expertise in data and analytics — and RMNs have taken note.
“At Best Buy Ads, we’re strengthening our capabilities in self-service so that we can truly be able to work with clients however they need us to,” Stevens said. “We’re recognizing the needs of different agencies as a spectrum from self-service to managed service rather than a binary preference.
“Agencies are already doing a lot of different things on behalf of their clients,” she added. “They don’t want RMNs to add one more complicated and lengthy process — they need it to be as easy as possible so they can move as quickly as they need to for clients.”
RMNs’ measurement capabilities are unlocking more opportunities for agencies and their clients
By allowing agencies to advertise clients’ products and services within highly relevant and targeted contexts, RMNs are increasing brand visibility and driving sales. The top formats for brand and agency RMN ads include social media (56%), video (43%), email (39%), search (37%) and text (36%), according to Digiday and Best Buy Ads.
To glean critical campaign insights from these and other formats and determine their effectiveness in driving both online and offline sales, agencies and brands are relying on the valuable closed-loop reporting and measurement offered by RMNs.
“Agency partners, in particular, have an increased focus on the ability to use data to optimize towards key metrics that drive their clients’ business,” explained Stevens. “The power of closed-loop measurement has been helpful for agencies — allowing them the opportunity to see the value they are driving across all touchpoints in a campaign. This type of measurement and activation is powerful because it reflects the way customers are actually shopping.”
Sponsored by Best Buy Ads
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