Retail Media Network (RMN)

ARTICLES
January 14, 2023

Retail Media refers to advertising campaigns run by retailers on their websites, mobile applications, physical stores, and/or third-party websites, leveraging first-party data from shopping platforms. It is known as a hyper-performative channel because, due to its shopping context and proximity to the bottom of the purchase funnel, it builds strong brand awareness. For this reason, it is called the “Third Wave of Digital Advertising.”




In this article, we would like to address the concept of Retail Media Network (RMN) within the scope of retail technologies, which is one of the main focus sectors of Boğaziçi Ventures’ BV Growth Fund.

What is Retail Media?

Retail Media refers to advertising campaigns run by retailers on their websites, mobile applications, physical stores, and/or third-party websites, leveraging first-party data from shopping platforms. It is known as a hyper-performative channel because, due to its shopping context and proximity to the bottom of the purchase funnel, it builds strong brand awareness. For this reason, it is called the “Third Wave of Digital Advertising.”

By using retailers’ data throughout the purchase journey, brands can buy ad space across all digital assets of a retail business. As Epsilon states, “a successful media network is one that can effectively monetize across all addressable channels down to the end consumer in a brand-safe, privacy-compliant environment.”

Advantages of Retail Media

Retail advertising is a comprehensive marketing method that uses various media tools to promote products or services to customers. Retailers reach target audiences through print, television, and online advertising. Ads displayed through retail media networks can appear on search pages, homepages, category pages, and product detail pages.

Advantages for Advertisers

  • Visibility in Organic Search: Better visibility in organic searches depending on relevance to search terms and previous traffic.

  • Point-of-Sale Advertising: Connects ad spend directly to digital sales, enabling point-of-sale advertising.

  • Powerful Analytics and Attribution: Offers robust analytics and attribution based on first-party data and purchase preferences.

Advantages for Retailers and E-Commerce

  • Data Management: Analyzes shopper behavior and recommends relevant products.

  • Increased E-Commerce Sales: Suggests complementary products, increasing basket size and boosting sales.

  • Personalized Experience: Enhances personalization with better relevance measurement and stronger recommendation algorithms.

Advantages for AdTech Vendors

  • Privacy Compliance: Enables strong targeting based on first-party data, unaffected by stricter privacy regulations.

  • Clean Data Usage: Helps marketers and retailers derive value from their data while promoting transparency and cross-channel measurement.

Market Size and Potential

Retailers across sectors are adopting data-driven strategies to compete with giants like Google, Amazon, and Facebook. More retailers are building specialized marketplaces to capture market momentum and create new monetization opportunities.

According to Besedo.com research:

  • North America: 55 marketplaces with 4.5 billion monthly visits

  • Europe: 69 marketplaces with 4.1 billion monthly visits

  • East Asia: 19 marketplaces with 2.7 billion monthly visits

  • Latin America: 19 marketplaces with 1.5 billion+ monthly visits

In the U.S., retail media was worth over $30 billion in 2021. In the UK, retail media networks grew by more than 10% year-over-year. According to Google Trends, searches for “retail media advertising” have increased by 59% recently.

Retail Media in Turkey

In the first half of 2022, 67.2% of Turkey’s total media investments were digital. This shows the market reached ₺14 billion, up 78% compared to the same period the previous year.

In 2021, Migros founded Mimeda, Turkey’s first retail media company, combining data, communication channels, and ad technology to connect brands with the right audience. According to 2022 results, Garnier achieved 52 ROAS overall and 13 ROAS specifically for its serums, while customer growth rose 76% and sales increased 55% in online and offline channels.

Global and Local RMN Applications

Big players in retail media include:

  • Amazon Advertising

  • Walmart Connect

  • Target Roundel

  • Home Depot Retail Media+

  • Wayfair

Their monthly unique visitors are staggering:

  • Amazon: 213M+

  • Walmart: 100M+

  • Target: 120M+

  • Home Depot: 183M+

  • Wayfair: 39M+

Startups like PromoteIQ, Mabaya, CitrusAd, Criteo, Kevel, and Topsort are also competing or collaborating in this space. For instance, PromoteIQ (founded in 2012, U.S.) was acquired by Microsoft in 2019; Mabaya (founded in 2013, Israel) was acquired by Criteo in 2021; CitrusAd (founded in 2017, Australia) was acquired by Publicis Groupe; and Criteo (founded in 2005, France) went public in 2013 with a $1.7B valuation.

RMN Initiatives in Turkey

As the Turkish retail market expands, more startups will emerge in this space. Notable pioneers include:

  • Gowit (founded 2019 by Emrah Adsan): Provides multi-channel monetization of advertising.

  • SegmentHub (founded 2021 by Ergin Bulut): Offers real-time omni-channel visitor segmentation, on-site/in-app advertising, and content personalization.

Boğaziçi Ventures’ Portfolio Companies

  • UAhero: An AI company addressing critical issues in mobile marketing. Its AI-powered campaign management and ROAS optimization platform helps mobile marketers enhance performance and acquire more profitable users with less effort.

  • Enhencer: An online platform that helps e-commerce companies improve conversion rates and ROAS. By analyzing website visitor data, it segments users based on behavior and purchase likelihood, providing the most relevant target audiences for campaigns.

The Expanding RMN Ecosystem

The growth of RMNs is supported by tech innovations and shifting consumer behavior. These networks not only increase sales and advertising effectiveness but also improve customer experience. AI-powered analytics, for instance, help retailers better understand consumer needs and deliver more tailored services.

Future Trends in RMN

The future of RMNs will be shaped by advances in technology and data analytics:

  • IoT: More data collection and analysis opportunities.

  • AR/VR: Enhanced shopping experiences with virtual product trials.

  • Data Security & Privacy: A critical success factor for RMNs.

Global Success Stories

  • Amazon Advertising: Enabled brands to directly reach target audiences with major success.

  • Walmart Connect: Helped retailers run effective campaigns using customer data.

These cases inspire other retailers and brands globally.

Expansion of RMN Applications

RMNs are increasingly adopted by both large-scale retailers and SMEs. Particularly for smaller businesses with limited budgets, RMNs offer cost-effective targeting of the right audiences.

Conclusion

Retail Media Networks have become an essential part of modern digital marketing. They provide major opportunities for both retailers and advertisers by boosting sales and improving customer experience. With technological progress and the power of data analytics, RMNs will continue to play a critical role in the future of marketing.

At Boğaziçi Ventures, we closely follow developments in RMN and continue to offer innovative solutions in this field through our portfolio companies.