Making the Most of Off-Site Retail Media Requires an Open Mind
There’s a pattern that repeats itself every time a new digital advertising channel emerges: advertisers get as many consumers that they can find at the bottom of the funnel and then start to figure out how to work their way up the funnel. This strategy has been particularly popular on retail media networks (RMNs) where people are literally about to make a purchase. Advertisers can use retailer data to precision-target people based on their search, shopping and purchase behavior to drive conversion, cross-promote products, and even prospect shoppers of competitor brands.
However, there's only so much value advertisers can squeeze from active shoppers on a single retail site. As advertisers saturate retail sites, prices go up and growth stalls. A retail site is like a pond with only so many fish. If an advertiser wants to catch new fish (or catch fish at lower prices), they’ll have to go upstream or look in some new ponds.
That’s where off-site retail media strategies come into play. Advertiser Perceptions forecasts that retail media will grow 30 percent in 2025, largely driven by off-site spending, which will grow at 2x the on-site growth rate. The research firm notes that saturation and inventory constraints on retail sites are leading brands to see how they can get a better deal targeting the same audiences further afield. Brands looking to expand their retail media strategy have a number of “off-site” options to choose from, from extended network placements on channels like social media to retargeting audiences on the open web.
Creating the right strategy to make off-site retail spending count requires a combination of measurement, testing and cross-channel messaging.
Knowing When to Fish Further Afield: Testing and Measurement
Measurement is a critical factor in advertising because it can help advertisers know when and where to spend. It’s actually the primary tool that advertisers spending on RMNs can use to spot signs that the “low-hanging fruit” has been picked. Some of the most common issues of RMN saturation that advertisers will pick up in their metrics include:
- Flat or declining performance: Either due to banner blindness or competition, advertisers may see lower interaction with their on-site ads.
- Increasing prices: When on-site CPMs rise too high, RMNs no longer represent the best deal available on digital.
- Scale limitations: Advertisers looking to find net-new audiences or to have more impressions may find that on-site properties aren’t enough.
As advertisers start to see limitations of on-site RMN placements, they’re being sold opportunities to spend off-site. Partnerships with platforms that enable off-site advertising using the retailer's first-party data for targeting have been embraced by retailers including The Home Depot, Doordash, and Best Buy. Emarketer also notes that programmatic activations are a key part of retail media spending, with 90 percent of retail media advertisers planning to continue using this option in the next 12 months. One of the more innovative off-site opportunities is commerce-based CTV activations, where advertisers can reach shoppers using retailer data on the big screen.
Measuring the value of each of these new off-site opportunities isn’t just a “one for one” comparison with on-site spending. There’s the complexity of understanding incremental lift from advertising across an advertiser’s complete plan. Using incrementality testing complete with a control group can help advertisers assess not just the results of off-site spend, but the actual net new lift that each option delivers.
Finding the Right Message Requires a Hybrid Approach
Another important element to consider with off-site retail media is how to message to audiences. RMN messaging is somewhat straightforward. If someone searches for “bodywash,” chances are they're looking to buy some. Advertisers have done well with discounts, competitive conquesting and bundling because they’re addressing shoppers right at the point of purchase.
Off-site retail media means that it's the same people, but they're in a completely different mindset. Those same discount and conquesting messages will be totally out of context. However, using branded creative can feel too generic for such a targeted audience. An approach that combines commerce and branding in one can often work best.
One approach that’s working for brands is to leverage past shopping data to personalize messages that still work off-site. Amazon.com's Brand+ tool helps advertisers analyze shopping behaviors and use that information to target audiences across streaming TV and video, bringing a performance approach to a typically brand-oriented ad channel.
On social media, retail media companies including Instacart offer targeting, which can help brands push consumers to purchase more quickly. Clorox announced it was testing Instacart’s shopping data for targeted campaigns on YouTube, for example, hoping to drive purchase even while people are scrolling videos to watch.
During these early days of off-site retail, advertisers do need to keep an open mind. Many of the things they'll be testing are less than a year in the market, and figuring out the right combination of data, messaging and media mix will require some time. It’s clear that advertisers are excited to use retail media data, but they’ll need to build expertise to establish the right overall strategy and make the most of off-site opportunities.
Adrienne Ross is vice president of retail and commerce solutions at Kargo, a creator of breakthrough ad solutions for the world's leading brands.
Adrienne Ross is the vice president of retail and commerce media solutions at Kargo, where she leads a team focused on delivering transformative commerce experiences. Her team drives innovation across commerce media networks and shoppable ad solutions, integrating them seamlessly into diverse media channels. Prior to this role, Adrienne held senior positions at Kargo spanning Client Partnerships, Client Services, and Campaign Management.
