By: Inder Singh, SVP Commerce, InMobi
Jimit Doshi, Vice President, Head of Revenue and Operations, InMobi Commerce
Retail media has taken the marketing and advertising world by storm. And we have reasons – actually, 30 billion reasons – why we believe its ascent is only beginning. According to eMarketer’s latest forecast, advertising spend could exceed $30 billion next year, up from $18.7 billion in 2020. But what does that mean for today’s marketers and advertisers, and what trends can they expect to see in 2022? Let’s pare down from 30 billion and just focus on three critical predictions for retail media advertising next year.
- Video will be the next evolution of retail media
Static sponsored product and sponsored search ad placements are mere table stakes. As more retailers form media networks, we’re going to see vibrant competition for brand advertising budgets. Not only will retailers need to prove they can deliver a positive ROI with clear access to customer data, but they’ll need to deliver it in more innovative and engaging advertising formats.Advertisers will turn to video as their savior, considering it a win-win-win for retailers, brands and consumers. In recent testing, InMobi found that the average click-through rate for video ads is 7.5 times higher than static or display ads. Plus, video ads can serve as an important touch point for brands to share stories about a product, educate shoppers and inspire purchases.
Retail media video advertising won’t be limited to sponsored video ads that replace static posts. Major retailers, including Walmart, Amazon and Albertsons, have already adopted a live commerce strategy. Expect to see many other retailers embrace the format, too.
Video helps brands build awareness and drive conversions by compressing the funnel in a single ad unit. We’ll see much more innovation from retail media video advertising in 2022, especially around shoppable live video ads.
- Retailers will work with more than one retail media partner
Looking to predict the future of retail media? Check out the evolution of programmatic media. As the programmatic advertising industry became increasingly complex, ad mediation became incredibly beneficial for publishers. Mediation enabled publishers to seamlessly connect multiple ad networks, so they could maximize fill rates and increase revenue.
We predict that retailers who currently work with a single supply-side platform will integrate with multiple retail media networks, solution providers and/or retail demand-side platforms (DSPs) to fully maximize the demand for their retail ad inventory and customer access. Because each partner specializes in different ad formats or target accounts, retailers can uncover revenue from more sources to grow year-over-year revenue.
- Emerging brands are the next big spenders in retail media
While retailers have traditionally focused on accruing funds from the top 10%-20% of brands, they are missing out on other significant sources of collective revenue. Over the next year, we predict that emerging brands will shine alongside the big players in retail media.
Marketers, particularly shopper marketers, are drawn to retail media because of the access to valuable, first-party consumer data. They’re able to target consumers most likely to purchase their product as those consumers actively browse a retailer’s site intent on making a purchase. With the right retail media partner, marketers can tie the purchase to media exposure.
To capture budgets from smaller brands with leaner teams and resources, retailers will have to develop solutions like self-serve ad platforms, which allow brands to optimize their media for revenue goals instead of clicks or impressions. All marketers want their media spends to drive revenue, but smaller brands with smaller budgets have to prove their spends move the needle to unlock more funds.
Even as consumers begin shopping in person again, ecommerce remains set to see major growth in 2022. As a result, retailers should think like publishers and monetize their digital shopping channels through retail media. In 2022, this space will mature to become a more standardized advertising option, with a wider variety of tools and options for both brands and retailers.