Ad money moves to retail media as brands vie for attention on crowded marketplaces

By now, most businesses are familiar with the consequences of the Covid-19 pandemic: faltering offline sales, fluctuating foot traffic, and lockdown mandates that make many brands wish they built an ecommerce infrastructure sooner.

As consumers in Southeast Asia shift from going to shopping malls to buying essentials on Shopee, Lazada, Tiki, and Tokopedia, advertising dollars naturally followed, giving birth to retail media in emerging markets.

In 2018, Amazon paved the way in the US by launching Amazon Advertising, which became the first bid-and-buy marketplace. Boston Consulting Group now estimates that retailers have a US$100 billion business opportunity to capture – if they can keep up.

The old marketing tools

The main goal of marketing, no matter the medium, is to highlight a business or product to the right consumers to score a potential sale. And like most things, there is a bad, a good, and a much better way of doing things.

Traditional marketing channels consisted of linear TV, radio, and print because these mediums were popular at the time. But with the birth of the internet emerged newer platforms such as websites, streaming, and email. Then came the rise of social media and apps that shook up the advertising landscape once more.

The shifts have proved one thing: business went where the consumer was. So when sources of traffic and revenue once again change – let’s say due to a pandemic – the marketing mix will undoubtedly accompany it.

In the next 12 months alone, many marketers are planning to decrease spending in cinema, print, and out-of-home advertising, while the majority will increase budgets earmarked for social media and search engines.

Source: 2021 Nielsen Marketing Report: Era of Adoption

The search for superior advertising channels

As money flows out of outdated buckets, which channels stand to gain? The answer lies in ad revenue trends in mature markets like the US.

While Google and Facebook remain the dominant advertising players, Amazon has cut into the duopoly’s ad revenue pie, growing its share from 7.8% to 10.3% in a single year.

How was it able to do this? That’s because the most valuable advertising channel is the one that has the most measurable touchpoints with the consumer. TV, radio, and print ads lose the consumer after the first point of contact, while websites and email ads track clicks but then lose customers once they’re off the medium.

Source: eMarketer March 2021

Ad networks and social media became industry titans because they not only monitor a consumer’s interests and movements across multiple mediums, but they can retarget that consumer with various personalized ad content to chase a conversion goal.

The new advertising titan

The hurdles in striking retail gold