Retail media networks | the next step of maturity

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Author: Liam McCarten, Meta | Member IAB SEA+India Retail Media Regional Council

There is no doubt that the rapidly expanding retail media landscape across APAC represents a significant opportunity for advertisers. The recent IAB SEA+India research report, Retail Media: Digital Advertising's Next Big Wave highlighted a clear demand and willingness to invest from within the marketing community across Southeast Asia.

My own Retail Media Network (RMN) journey dates back to 2012 in my previous role at Reckitt Benckiser in the US where we pioneered with both Walmart and Facebook to leverage Walmart shopper data to reach Reckitt’s key consumers across Facebook. The results were incredibly encouraging from an ROI perspective, but it was the increase in partnership with Walmart [increased placement and distribution] that really made this type of activation attractive. However following the results Walmart moved quickly in-house with this capability. Fast forward over a decade and Walmart Connect is one of the most significant RMNs globally.  

From Bentonville to Bangkok

This experience and those since have shaped my view on the need to approach retail media holistically. we have the opportunity to shape the landscape in APAC as it's still in its infancy, therefore I'd call out the following as key considerations:

• Marketplaces are accelerating tools and capabilities with platforms

• There is still a critical need to drive digital footfall

• Attribution currently needs work

• 4Ps - Placement is the unsaid key factor for many marketers

• How will Business Messaging play a role in RMNs?

Marketplaces accelerating tools and capabilities with platforms

There is an incredible appetite and speed of innovation in Asia at the moment focused on retail media. Many platforms, apps and marketplaces are quickly growing their offerings. An interesting by-product is the way marketplaces are accelerating tools and capabilities with platforms.

An example of this is Meta’s Managed Partner Ads, a product that enables marketplaces to extend their onsite audiences across Meta’s platforms on behalf of small and medium size brands on their platform. The case study below from Shopee highlights the strong conversion metric uplift across numerous categories in Indonesia, Vietnam and the Philippines.

The more we can innovate and bring the power of retail audiences to move consumers the better.

Driving ‘digital footfall’ is still very necessary

Another  critical consideration for brands when leveraging RMN is the continuous need for both reach but also creating demand [vs. singularly converting demand]. 
Extending retailer audiences off platform for scaled reach is certainly in many marketers minds and there are steps to achieve this in the form of CTT and DSPs.
At Meta, we developed a product prior to the pandemic called Collaborative Ads, to  enable brands to leverage retailer data to drive traffic, high value audiences and ultimately sales on marketplaces. 

However, we learnt over time the most compelling outcome for brands (and in many cases, retailers) was the ability for this product to bring new buyers and increase penetration. In a recent meta analysis (pardon the unintended pun), collaborative ads campaigns drove 88% new buyers in Q3 2022.

The digital footfall created by such techniques is a powerful tool when driving penetration, a core tenet of any marketing strategy.

Attribution currently needs work

As we move along our APAC RMN journey, in order for the continued momentum to sustain, ensuring we have consensus and confidence in attribution will be critical. A recent study by the Boston Consulting Group, 5 Things CPGs Really Want from Retail Media Networks shows that attribution was the number one ask from marketers.
There are currently a multitude of measurement techniques being adopted from last click attribution to MMM. Given the need for demand creation vs. just demand conversion, the last click feels over simplistic and potentially undervaluing the need to drive digital footfall.

In the survey, top of the class in terms of measurement demand came out as MMM. 

As we meet as an IAB SEA+India Retail Media Regional Council, having a broader view on how we foresee progress in measurement seems to have the backing of the marketing community.

4Ps - Placement is the unsaid key factor for many marketers

Often an unsaid topic when discussing RMN is the value marketers place on improving their trade relationships when investing in RMN. This dynamic behaviour between retailer and advertiser/seller is by no means new;  it has existed for decades.

The same BCG study outlines the importance marketers place on preferable placement locations as a means of securing the full ROI of an investment.

So the question of what is the combined value of both the effectiveness of RMN and the broader benefits - placement etc - will be an important equation to understand vs. one in isolation.

How will business messaging play a role in RMNs?

Asia along with LATAM are the driving forces behind both consumer demand and product innovation for business messaging. Today RMN is predominantly focused on video/display ads - how retailers are looking to monetise business messaging and the massive opportunity it represents.
The JioMart WhatsApp integration launched just under a year ago and JioMart CEO, Sandeep Varaganti recently shared that sales driven by WhatsApp are increasing 40% month on month. How this type of accelerated momentum can be more formalised within RMNs is an interesting opportunity to solve.

To summarise, RMNs will grow in both importance and the investment advertisers make within them, that’s for sure. How the industry approaches the next step in the maturity journey will be a very interesting area to watch.