5 Retail Media Myths Debunked

Retail media programs are booming in 2022 because of their potential for massive business impact. As third-party tracking declines, advertisers are challenged on how to remain effective and decide the best monetization strategy moving forward. The answer for many retailers is a first-party retail media program.

But, like adopting anything new, it’s common to have some reservations. Let’s walk through some of the most common myths about retail media programs, and find out the truth.


Myth #1 – A Retail Media Program Isn’t Beneficial to My Business

Busted – There are lots of digital marketplaces that generate hundreds of millions in annual advertising revenue while also supporting the core business.

As a multi-brand publisher, your digital marketplace needs the infrastructure and support necessary to build in-platform ad functionality like native ads, saving you the time and expense of building it yourself. With your native advertising program, your marketplace is pulling double duty. You’re no longer generating only sales and direct transaction fees, but an entirely new advertising-based revenue stream based on the targeted shopping experience your site provides users. 

Your multi-brand e-commerce site might benefit if it generates 2+ million visits per month (across your website and app combined), and you’re interested in monetizing that traffic while improving your merchant/supplier relationships. Fanatics.com, Amazon, Walmart, Uber, and Etsy are just a few of the big names you know who have benefitted from their own retail media program.

Retail media programs are crucial, as they deliver a three-fold win for all parties involved: 

  • First: site operators capture a previously untapped audience using privacy-centric monetization tactics
  • Second: advertisers gain visibility above their competition and drive incremental sales 
  • Third: consumers see relevant, non-intrusive ads while their data remains protected


Myth #2 – The Ads Aren’t Relevant to Shoppers’ Buying Intent

Busted – Media programs offering enhanced first party targeting are 3x more effective than traditional targeting. The most successful native ad programs are layered on top of the personalization you’ve already built on your site. In this model, ads are delivered based on shopper behavior and attributes they’re searching for, driving ad relevance and improving user experience.

If shoppers see ads that allow them to buy what they’re looking for more quickly, the user experience improves, and your retail marketplace benefits overall.


Myth #3 – Native Ads Will Negatively Impact My Site’s Core Conversion Rates

Busted – Most programs see a neutral or positive impact on core conversion. As we said above, ads are delivered based on key behavioral indicators. Meaning, with the right program and strategy in place, native ads have no negative impact, and in many cases even improve conversion rates. 

The keys to maintaining your conversion rates are to deploy A/B testing before full program roll-out to ensure you’re building the most successful program possible, and to ensure that your site’s personalization (not a third-party network or search algorithm) is responsible for providing the ads.


Myth #4 – My Suppliers Don’t Want to Spend Marketing Dollars on My Site

Busted – Suppliers want to advertise on your site because it helps drive incremental revenue with specific audiences. Marketplaces with advertising programs have more engaged suppliers, and those suppliers are eager to optimize ad performance.

Even more, the death of the third-party cookie means that retailers need to shift advertising dollars to first-party data and double down on a digital shelf. The accelerated move toward privacy-first data means that multi-brand e-commerce site operators who are lagging in first-party data sets and proper technology will fall behind. But don’t just take our word for it – 60% of marketers say that the discontinuation of third-party cookie support will increase their spending and emphasis on use of first-party data. 

Native ads give your sellers a compliant, privacy-first path to target customers at the point of sale. This puts them significantly ahead of their competition. They’ve got dollars to spend outside of Google and Facebook, and with a native ads program, you’ve got a perfectly positioned first-party spending strategy for them.


Myth #5 – A Custom Retail Media Program Will Be Hard to Implement

Busted – Not true, friends. Partnering with an established adtech provider can significantly decrease your time to market vs. hiring internal engineering, product, sales, and ad operations teams to build out and support your in-house program. The in-house, DIY approach can take 3 to 5 years, while a partnership can have your retail media program live in as little as 45 days. Think of all the time and money saved!


There you have it. The five most common retail media myths – busted! Koddi provides a fully customizable solution to your retail media network needs, complete with best-in-class customer support and service every step of the way.

Ready to discuss what a retail marketing program can do for your business? Contact us today and let the experts at Koddi walk you through it.

Koddi Ads , Marketplaces