Retail Media has been on a meteoric rise over the past few years, growing to over 54B in revenue in 2024. The benefit of this advertising strategy has been so beneficial to both retailers and brands that 2024 has seen its expansion offsite to retailers’ search, social, and open web presences. With the emergence of offsite retail media, brands are now experiencing unprecedented access to their retailer’s first-party data. This access to data allows retailers to personalize media campaigns as well as use rich performance data to increase ad effectiveness. When offsite retail media is combined with the recent advancements in media buying, audience and reporting capabilities a veritable gold rush of advertisers shifting budgets has commenced. These advertisers are targeting relevant retailers that can help them drive meaningful impact on their business. For all of this to be possible and grow, a strong AI component is critical.
With such a wealth of data, Retailers are positioned well to leverage that data in the AI era with a wide range of relevant applications within their holistic retail media strategies. Retailers who embrace AI-driven marketing and advertising will create improved customer experiences with their advertising both on their retail website as well as create much-needed efficiencies to be able to expand into their lucrative offsite channels.
Here are some key areas where AI will revolutionize retail media, empowering businesses to drive engagement, optimize campaigns, and ultimately, shape the future of customer interactions.
Dynamic Creative Generation
Retailers have built robust product catalogs that power many dynamic ad formats across Google, Meta, and TikTok. While these formats have been the backbone of early digital advertising, using them to seed generative AI creates new opportunities to enhance and greatly scale creative output for performance ads. Using generative AI, Advertisers are able to quickly create a larger set of creatives, which had previously been limited due to operational complexity and expense. This combination unlocks much more impactful creative, improving the customer’s perceptions and experiences while providing a depth of content variety that is essential in combating ad blindness.
Enhanced Customer Segmentation
AI can identify nuanced customer segments based on complex behavioral patterns and preferences. This allows retailers to tailor their messaging and offers to specific customer groups. We have seen that hyper-personalization directly leads to more effective ad campaigns resulting in increased customer loyalty. As new technologies, including data clean rooms, come to maturity, a new wave of automated personalization will be unlocked to quickly identify new customer segments and automatically optimize campaigns, increasing the impact they will have.
AI-powered Campaign Optimization
Over the last 2-3 years, all major advertising players have developed and deployed Machine Learning-based media optimization capabilities, from Meta’s Advantage+ to Google’s Performance Max. With even more solutions quickly coming to market, setting up a campaign that will efficiently target and connect with customers is becoming easier. Soon, Retailers will be able to go further and use AI to continuously analyze campaign performance across various channels, and automatically adjust bids, targeting, and creatives for an optimized ROI. This real-time optimization frees up marketing teams to focus on strategic initiatives vs manually adjusting campaigns.
Advanced Media Inventory and Yield Management
Algorithms can now forecast product demand with incredible accuracy. This allows retailers to optimize their media inventory in ways that can increase advertising yield and enable dynamic allocation. By leveraging multiple data sources including; site analytics, supply chain and merchandising plan and spending, retailers can better navigate the high variability of onsite media inventory. This, in turn, empowers their sales and planning teams to utilize as much available inventory as possible, especially in high-demand times of year.
Personalized Assistants for Sales and Planning
One of the other areas that have slowly gained momentum is creating more personalized trained GPTs for specific types of work, Retail media is fully primed to see benefits from this. Retail Media groups have a wealth of customer, creative, media, and other performance data that could be leveraged to assist their internal teams. This data, when shared with preferred partners, can improve strategic investments and performance. Think of it as a new way of working; you could simply ask a retail media network (RMN) Chat GPT style assistant, “What has been the most effective marketing channel for Brand X over the last 6 months?” and a detailed and informed response would come back helping fine-tune the media strategy or sales efforts. Increasing the speed of information allows teams to easily navigate the complex planning and strategies for RMNs and respond faster to ever-changing market conditions.
By embracing these AI-driven solutions, businesses can unlock new levels of efficiency, personalization, and growth within Retail Media both on and offsite. As these RMN’s continue to expand and the breadth and quantity of data points increase, the role and application of AI in all of its forms will continue to be the lynchpin that makes everything possible. The future belongs to those who recognize AI not just as a tool, but as a fundamental building block of the next generation of customer engagement.
About the Author
Mark Heitke is the VP of Strategy at Symbiosys. With decades of advertising strategy experience, he is focused on the emergence and maturation of Retail Media since its inception. Prior to his work with Symbiosys, Mark served as Head of Product and Audiences for Best Buy Ads. He is also a founding member of IAB Retail Media Council and won the inaugural Path 2 Purchase Retail Media Pioneer Award. Mark and his wife live in Minneapolis, where on the weekends, you can find them enjoying that lake life, checking out a local craft brewery, or chasing their two young sons.
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