Retail media networks have become one of the hottest segments in the ad market during the past few years as brands tap into retailer’s first-party data to hone-in on consumers as they are considering a purchase. What started with retailers like Walmart, Amazon, Walgreens, and Target serving targeted display ads on their websites and mobile apps has mushroomed into its own media juggernaut with more than 70 available to marketers. The economy and tighter ad budgets have made this performance marketing option all the more appealing. That may challenge radio’s share of spending, but the Radio Advertising Bureau is making the case for the two media menu options to create a well-balanced media plan.
Digital retail media spending is now at $95 billion worldwide, and WARC says $41 billion of that comes from the U.S. Amazon has the leading retail media network, but it has seen growing competition from brands like Instacart, which got half of its revenue in 2021 from its retail media network while Walmart Connect, the retail giant’s ad platform grew by more than 50% in 2021 to $2.1 billion. And grocery giant Kroger’s online channel accounted for $10 billion in ad sales during 2020-2021.
RAB Senior VP of Business Development Tammy Greenberg says that while retail media networks are attractive since they are able to track conversion and purchase, radio is capable of reaching consumers as they move throughout their daily routines on their path to a purchase.
“Reaching and engaging consumers throughout their day reminds people of the messaging they may have received via their preferred retailer and kept tucked away in the back of their brains, which can inform their actions later on,” Greenberg writes in a blog post for the Association of National Advertisers. She says the “synergies and amplification” that radio can bring to retail media networks’ plans also has the potential to multiply results and ROI by filling in gaps when it comes to driving brand awareness and interest.
“Broadcast radio is the highest reaching medium no matter how one looks at it and generates greater reach for the same (if not less) investment than television and digital. That superior reach offers an opportunity for brands to fill their upper funnel gaps,” she writes.
Greenberg also tells advertisers that radio is in the first-party data game. According to RAB estimates, nearly every one of the more than 15,000 radio stations in the U.S. owns a proprietary, first-party data “goldmine” that captures audience preferences, passions, and demographics. Greenberg says those insights are used on behalf of brands including Procter & Gamble, Macy's, and Amazon on a regular basis to craft timely and localized audio messaging, generate participation in promotions, enhance couponing efforts, and to seed various branding messages.
“As brands continue to identify the most effective ways to travel alongside their target consumers through their daily rituals, local insights and knowledge about how consumers respond and react to messaging will be critical to a brand's bottom line,” Greenberg says.