3 Retail Media Challenges and What it Takes to Beat Them

Retail media is a means of digital advertising in which you market to consumers near the point of sale. It implements ethically-sourced, first-party data to streamline consumer comparison between brands or purchase options – boosting incremental revenue for digital marketplace operators and improving the user experience for shoppers.

If you’re preparing to implement your own retail media program, there are three key challenges to keep in mind:

  1. Network-First Approach
  2. Taxonomy and Personalization Complexity
  3. Campaign Management Complexity

Let’s break these down one at a time, so you can approach your program with all the tools for maximum success.


 #1: Network-First Approach

Large ad tech providers in retail media have convinced retailer publishers to open their inventory to the ‘retail network,’ which allows the provider to maintain control and dominance over the supply – and weakening the relationship the publisher has with their supplier (since that supplier buys via a network indirectly, vs. one-to-one with the retailer).

This introduces the risk that products shown as an ad won’t match the buyer’s intent very well, even though they might perform well on other retail publishers in the network. At the end of the day, this discrepancy between expectation and reality deeply damages the user experience.

An ideal retail media partner will work with a publisher to set up their own self-serve UI for buying and managing retail media. Not a middleman in the buying process, but a 100% whitelabelled service provider so that the suppliers’ experience is that of working directly with the retail publisher – similar to the UX suppliers enjoy when working with Amazon or Walmart, the leaders in self-serve retail media.

In summary: Most of today’s major ad tech players are looking out for their networks, not your business. Find a partner who puts you first.


 #2: Taxonomy and Personalization Complexity

Choosing exactly which product to promote to a specific user is not easy. In fact, it’s highly technical. Taxonomies are vast and complex, and product search is a deep field. A simple example is that a user’s search for “oven” should feature a different ad on a Toys page than it does on an Appliances page – not to mention modifiers like “cheap,” “red,” “convection,” and so forth. And on top of the product match, a user match (i.e., personalization) is necessary to create the most relevant results match.

Retailers invest millions in personalization logic, systems, and data. Unless the ad system uses the exact same search and personalization logic that the retailer uses, the potential for any sort of high baseline of relevance for ads will suffer, and the investments in personalization are wasted.

Some believe that means retailers must build their own ad stack to guarantee personalized relevance. Not true. The right ad tech partner can filter the organic product results in alignment with first-party data-based modifiers like retailer characteristics and user search parameters. With a strategic approach, advertisers don’t have to bid for every product individually, they don’t need to buy or worry about keywords, and they’ll always show up in the right places. Users won’t see irrelevant ads and clicks and conversion performance will be very very strong.

In summary: Most of today’s retail media solutions want to hijack your search results, not build on top of them. Choose a partner who can integrate into your existing capabilities utilizing privacy-first data, guaranteeing a superior user experience.


#3: Campaign Management Complexity

Managing hundreds of thousands of keywords and their variants is hard work – not to mention difficult to optimize. And organizing products into campaigns and setting individual bids is not something most marketers want to spend time doing. However, most ad systems require bids at the product level, and campaign structures to match, in order to show the right ad to the right user at the right time. 

So, suppliers are forced into managing retail campaigns. In a lot of cases, they do it poorly, or incur the expense and hassle of using third-party platforms and agencies.

However, there is a way for advertisers to get fantastic results with minimal work. It’s all about balancing a high-level advertiser approach to ad serving, while still offering the flexibility to promote individual products or categories for marketing promotional reasons, margin requirements, or other considerations. 

In summary: Today’s retail media campaigns are unnecessarily complex, requiring a high active management burden. Your ideal partner should be designed to be simple, with campaign automation built in from the very beginning.


Now you know three key challenges, and how to beat them. But what about that perfect ad tech partner you’re looking for? This is where Koddi comes in. We’re a leading ad tech provider with 10+ years of industry-leading experience in the travel industry, now reimagining the way retail media gets done

Today’s retail media landscape has plenty of challenges. The experts at Koddi can help you beat them with a simplified approach that is already working for several of the largest global online retailers and advertisers. Koddi is taking a fresh approach to retail media that’s based on our years of experience running media programs in other verticals. Our approach can deliver differentiated results for publishers and advertisers alike.

Ready to put Koddi to work for your marketplace? Let’s talk.

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