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Retail media has grown super-fast in recent years and in 2022 the pace was phenomenal. It started online and has reached in-store, although we are just beginning to see how big it will get in a few years.
At the same time – programmatic media sales and buying have been dominant in online marketing. Advertisers can buy audience reach from programmatic marketplaces which then control where and when ads are run. It’s efficient and easy for all parties.
As in-store retail media is now expanding, it is only natural that best practices from online marketing, such as programmatic would prevail in in-store retail media sales as well. But this is not the case – yet only some advanced retailers are starting their programmatic media sales.
Why is that? This article examines the reasons and explains why this all is about to change in 2023.
In-store advertising has traditionally involved various mediums, from posters to floor stickers and promotion stands when brands need to be more personal. All this remains today (in some markets they are still predominant), but in-store screens and digital displays are rapidly expanding in stores globally.
These screens are operated with digital signage software and has been designed to be a one-to-many-medium. The software has concentrated on basic functionalities: content management and publishing and have not included any means to create sellable audiences or support media sales processes. Retailers have concentrated on their own advertising or if media has been sold it has typically been operated by traditional media sales companies.
Digital out-of-home media sales – the screens in public places - on the other hand, have been sold for advertisers yet for a long time. But this area of marketing is also fundamentally a one-to-many medium. Programmatic media sales & buying have started and there are a couple of companies running programmatic ad operations, but the business basically has remained the same.
As programmatic has been designed to support online ad sales business it is fundamentally a one-to-one process. One-to-many mediums have not been too easy to integrate resulting in manual phases in the sales process and one-off solutions for specific cases.
However, things have started to change rapidly. One reason for this for sure is the projected gigantic size of the retail media business which motivates business actors to solve problems with automation. The other has been the changes in the regulation of online marketing that restrict the use of cookies in tracking consumer behaviour. This has resulted eagerness for programmatic marketplaces to start supporting out-of-home thus in-store media sales has been on a steep rise.
So, what’s keeping the lid (yet only slightly) on programmatic media buying in-store retail media? Basically, everybody is waiting for somebody else to make the final move.
Basically, everybody is waiting for somebody else to make the final move.
Retail is waiting for brands to start demanding the same retail media capabilities in-store as they have online. The progressive ones already monetize their audiences based on their valuable customer insight but to do this business with full capacity would mean that retailers have programmatic media sales alongside current means of selling the media (direct sales, self-services for partners).
The online retail media platforms have their hands full of work with building new capabilities to satisfy their retail customers and brands that want advertising. They wait until retailers irreversibly start demanding full omnichannel capabilities with programmatic from them.
Brands, other advertisers, and agencies look at their programmatic service providers. They wait anxiously for when they can buy in-store advertising as a natural part of their media mix.
So – it is only a question of reaching the critical mass. And that is not that far away in the future. In fact, we believe that the moment will be reached in 2023.
What then makes us so confident that 2023 will be the year of in-store retail media & programmatic media sales? There is a saying that you must follow the money to find the truth. That is true in this case also. In the key position, we position the retailers.
We already see a major change happening in our own clientele and we do also hear the same message from our colleagues in basically all markets globally. There are numerous in-store retail media businesses built for retailers and all these cases have included programmatic as one important sales channel to complement other sales channels.
There are numerous in-store retail media businesses built for retailers and all these cases have included programmatic as one important sales channel to complement other sales channels.
These retailers have taken the initiative into their own hands, and this is already making waves among online retail media providers and those providing programmatic SSP’s (supply-side platforms).
The biggest retail companies will either want to complement their own RMN’s (retail media network) with in-store capabilities with an advanced suitable digital signage partner or if they have an RMN as a service provider, demand that they do it. The scale will demand that programmatic media sales & buying will be an integral part of it.
The medium-sized retailers who don't have capabilities for online retail media will still also see in-store business and audience monetization as a substantial new revenue stream and will find suitable partners to build these capabilities for them. Programmatic media sales channels will secure a steady flow of advertisers often alongside their partner self-services for the biggest brands and trade partners.
So, if adapting programmatic has been difficult to this date, how will it start big then?
There are two primary processes in how media sales is done in the programmatic world: Deals and Open RTB auctions.
Deals are keys for the buyer to a private auction between the seller & buyer. The buyer (which can be a single advertiser or an agency running multiple brands) decides if the price for media is appropriate and makes the buy.
Open RTB is an open auction in which all the brands on DSP (demand side platform) where the media in question is sold, can participate.
The in-store retail media in the programmatic world will start at scale with Deals as it did in online years. This will for sure be the main paradigm for a couple of years. As programmatic grows to be business as usual in in-store advertising also, the transition to Open RTB will happen fairly quick, due to its obvious benefits.
The end of 2022 already showed us the change is near, as more and more customers wanted to enter the high-margin in-store retail media business. We see that this year it will become mainstream. And when it becomes mainstream, all the players mentioned in this blog post will want to have their piece of it. This requires common unified practices and methods. This is something programmatic can offer.
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Doohlabs is a platform for in-store retail media & digital out-of-home. With our platform retailers & DOOH owners can monetize their audiences. Doohlabs Platform provides tools for turning audiences into media products and enables selling reach in various ways including direct media sales, self-services for brands, and of course programmatic. This writing is a co-op between Doohlabs and Tiina Tikkinen. Tiina is Doohlabs’ advisor in programmatic media sales & buying.
