Ad networks have existed since the dawn of digital advertising, and while they’ve stood the test of time, they’ve made several missteps along the way. The pitfalls of ad networks have led to retail media’s success as it emerges as a top advertising channel and stands to overtake more digital ad spend year after year.
Ad networks have long lacked unified first-party data, top-tier ad formats, and closed-loop attribution. Retail media networks are rising to fill in those gaps, and in this article, we’ll unpack why those three learnings are the reasons why they’ll keep rising to the top.
Ad networks act as intermediaries between SSPs (supply side platforms) and DSPs (demand side platforms), helping advertisers connect to available and relevant ad space across publishers. They offer publisher inventory in the form of impressions to advertisers at a marked up price and pocket the difference. Ad networks have been around since the 90s, and have long been essential technologies of ad infrastructures.
Ad networks are pillars of ad infrastructure because they make it possible for advertisers to buy at scale. Instead of having to work with each individual publisher, advertisers can easily launch campaigns across multiple sites, apps, and other digital platforms with the click of a button. Though the price may be marked up, ad networks are promising scalable impressions easily, which appeals greatly to advertisers.
A few top ad networks include:
There are dozens more, all offering unique value propositions for different publishers and advertisers alike.
Conversely, rather than focusing on scale across different websites, most retail media growth has come through publishers creating their own walled gardens. Amazon, Walmart, and eBay, for example, focus on quality on their own website. While they offer a more fragmented buying experience, they are offering performance-driven outcomes that ad networks never have been able to boast before. Retail media networks are stealing business from their ad network counterparts as they learn from ad networks' mistakes.
Retail media networks arose from a no-brainer revenue opportunity: retailers can easily make more money through monetizing their ecommerce websites, apps, and in-store screens. Though ad networks exist within retail media (like Criteo and CitrusAd), most major retail media networks are in fact walled gardens. Retail media has been able to thrive because of three main lessons retail media companies have learned from ad network’s mistakes:
Ad networks have long been notorious for their privacy-invasive practices. Not only have major ad networks like Google and Criteo faced significant fines globally for user privacy violations, but also frustrate retailers by sharing their data amongst competitors.
This won’t work for retailers given the significant competition within the retail industry. Imagine Albertsons, Costco, and Walmart all working with the same ad network. If data is shared among those retailers, and the insights from Costco’s network is shared with Albertsons for better targeting practices, Costco’s unique insights are lost. They’ve lost their leverage toward gaining more advertisers and converting more users to sales.
That’s why retailers today are keeping their data in-house. Whether that’s by building their own solutions or relying on a partner that keeps their data within their network, retailers won’t sacrifice their data any longer.
Users have been long frustrated with the latency of ad network powered ads. They’re slow, invasive to the user experience, and irrelevant. And ad networks haven’t innovated most of their ad formats in years, still promoting traditional banners across sites.
Retailers are stepping out of the box, promoting dynamic, native ads that span the customer journey, from in-store freezer screens to sponsored brands to checkout ads. This way, ads appear seamlessly alongside organic content and actually can promote a more positive user experience.
Yes, buying through an ad network makes scale easy. But at the cost of performance, advertisers are no longer interested. They’re looking for innovative units that will drive incrementality and new-to-brand customers, and they’ll pay more for targeted, innovative ad formats that drive performance.
Keeping data in-house makes it easier to start implementing closed-loop attribution. Whereas ad networks didn’t have to rely on ad attribution, as their main focus was simply matching inventory with advertisers, retail media networks must set the bar higher. Advertisers are looking for robust reporting, with clear attribution that proves ROI and high performance.
Retail media networks have an advantage here: their sites can capture the full user journey, from the initial ad through the final sale. This allows them to capture attribution data every step of the way and report the effectiveness of the advertising. And, with those insights, advertisers keep coming back for more.
Though retail media is exploding, a handful of retail media ad networks today stand out from the crowd because of their differentiation. Notable retail media ad network examples include:
Kevel’s Retail Media CloudTM is the only solution that allows retailers to bring their retail media network in-house without having to build from scratch at scale. This allows retailers to keep their data and launch high-performing ad units, all with closed-loop attribution in as little as 14 days. To learn more, contact us today.
