The Future of Retail Media After Google's Cookie U-Turn

The digital advertising world was poised for a major transformation with the anticipated end of third-party cookies. For years, marketers had relied on cookies to track user behavior and deliver targeted ads. Google’s plan to phase them out by 2025 marked the beginning of what many saw as a cookie-less future, driving the industry toward alternative ways of gathering consumer data.

Google’s recent decision to extend the life of third-party cookies has created a momentary reprieve. Yet, this pause hasn't slowed the momentum behind retail media networks (RMNs) and the use of first-party data. As brands and retailers explore these new strategies, a question arises: Will RMNs dominate the future of advertising after Google’s cookie U-turn?

The Rise of First-Party Data

Google's initial plan to eliminate third-party cookies in Chrome sent shockwaves through the advertising world, threatening to disrupt a key mechanism for tracking user behavior and targeting ads. While third-party cookies have long been a staple of digital marketing, their use has faced increasing scrutiny due to privacy concerns.

Laws like the California Consumer Privacy Act (CCPA) and Europe’s General Data Protection Regulation (GDPR) have already placed limits on the use of cookies, forcing businesses to rethink their data strategies. Although Google recently delayed the final phase-out until 2025, the shift to first-party data is well underway.

Unlike third-party cookies, which track users across various websites, first-party data is collected directly from customer interactions with a brand. This data is more reliable, compliant with privacy regulations, and generally of higher quality than third-party alternatives. First-party data allows brands to create a clearer, more accurate picture of their customers, enabling more effective targeting.

Here’s where RMNs come in. Retailers are leveraging their vast amounts of first-party data to create RMNs, in which brands can purchase advertising space directly within their ecosystem. These networks target consumers during key moments in their shopping journey, offering personalized experiences that can drive higher engagement. Through RMNs, advertisers can reach consumers who are already showing purchase intent, making the advertising more relevant and effective.

Retail Media Networks

As for how RMNs actually work, let’s take, for example, a beauty brand, which might partner with a retail media network to promote a new skincare line. Using insights from previous purchases, the brand can target skincare enthusiasts through digital ads, loyalty apps, or in-store promotions. When customers engage with these touchpoints, they might receive a special offer, such as a discount or bundle deal, that encourages them to buy the product. After completing the purchase, the brand can send additional offers, fostering long-term loyalty and repeat business.

Or, consider a sports apparel company looking to promote its latest line of running shoes. Through a RMN, the brand can identify customers who have previously purchased fitness gear or running apparel. Through targeted ads on the retailer’s website and app, as well as personalized email campaigns, the brand could offer exclusive discounts to these customers. Once a consumer makes a purchase, the retailer can push additional promotions, such as a loyalty bonus points or a discount on related items like running gear or accessories, encouraging repeat business and customer retention.

Retailers are increasingly recognizing the value of their own data, which naturally is fueling competition within the RMN space. As more brands seek to reach consumers through these networks, innovation and new opportunities are bound to emerge. In fact, a 2023 Deloitte survey found that 64 percent of U.S. retail companies with over 500 employees and $250 million in annual revenue were planning to implement a RMN by the end of 2024, underscoring the widespread adoption of this strategy.

Final Thoughts

Ultimately, retail anymore isn’t just about having the right products or offering competitive prices. It’s about understanding the customer journey, delivering personalized experiences, and engaging with consumers at the right moments.

RMNs, powered by first-party data, enable brands to create personalized, data-driven campaigns that drive sales and foster lasting customer relationships. As digital advertising evolves, RMNs will likely remain a dominant force, changing how brands connect with their audiences in an increasingly privacy-conscious world.

Ron Levac is the chief innovation officer of Spectrio, a customer engagement solutions company that offers digital signage and other services across industries.