Advertisers may rate e-commerce advertising highly for lower-funnel goals such as improving consideration and increasing sales, but a new survey from McKinsey indicates that brand-building campaigns are just as important to advertisers as performance marketing when investing in retail media networks (RMN).
The survey asked almost 200 advertisers their anticipated RMN spend allocations across objectives in the next 1-2 years. The results suggest an almost equal weighting between performance marketing (35% share), brand building/campaigns (34%) and shopper/co-op marketing (31%). This distribution was relatively consistent across advertiser types, whether CPG, Apparel/Footwear, Beauty, or Consumer Electronics.
The study also “busts” other myths about retail media. For example, while advertising on Amazon is becoming big business, it’s not the only game in town. Instead, the data shows that 80% of advertisers are currently using at least one retail media network other than Amazon.
Another myth that McKinsey challenges is that “RMN is a CPG-focused phenomenon.” While it’s true that almost 9 in 10 CPG respondents (bearing in mind a small sample size for these advertiser sub-categories) intend to increase their spend on RMNs in the next year, similar proportions of respondents in other verticals intend to do so also, including all Jewelry & Luxury sellers. Overall, 82% of the respondents plan to increase their RMN spend in the next year, with about 1 in 5 expecting to do so by more than 10%.
- Contrary to a perception that “RMN spend comes from dollars retailers already earn,” the survey results indicate that 84% of spending is likely to be net new (incremental), with the remaining 16% coming from shopper and trade marketing budgets.
- While self-serve is an important feature – half of RMN investments by respondents the previous year were made through a self-serve platform – the most important factor when selecting an RMN is reasonable cost of the media.
- Other important RMN selection criteria include access to audiences not otherwise reachable and high ROAS.
For more, check out the full survey results here.