James Milne, VP Business Development, Epsilon
Retail media has long appeared under different guises and, contrary to what the term suggests, it isn’t a revenue opportunity reserved exclusively for retailers.
What we’re beginning to see is businesses from outside the retail industry – from financial services to travel – viewing their customer base as something that can create a new source of revenue in its own right. The model is no different. Just as Currys and John Lewis do, non-retailer businesses can generate insights from the millions of customers that search, browse and go on to buy a new product or service. And that gives them something advertisers have always wanted: a better idea of who is actually in the market for what.
The growth case is already visible in the US, where Emarketer expects the wider ‘commerce media’ market to grow by 34.1% annually between 2025 and 2028. That is more than twice the expected rate for traditional retail media, at 16.2%.
The same appetite is clearly there in the UK market, with businesses increasingly exploring the potential of their owned customer data to connect advertisers who have relevant offers with customers looking to buy.
The question now is: how can more businesses tap into this new revenue stream?
Making retail media work for non-retailers
First, there needs to be an audience that advertisers would actually pay to reach. Scale helps because advertisers need enough reach to justify the investment, but a huge customer database isn’t necessarily enough on its own.
Recently, Insight by Confused.com, the market intelligence arm of one of the UK’s largest insurance comparison players, launched an offsite commerce media product called Connect. Built on anonymised, blended audience signals, the offering gives brands across all sectors access to intent-based customer segments across thousands of online publishers and streaming platforms.
If a consumer is researching travel insurance, there is a high chance they are also in the market for other purchasing decisions around travel; or pet food and accessories if they’ve compared options for pet insurance.
What those customers tell you through their interactions is more important still. Someone filling in information to request a quote gives a much stronger signal of intent than someone simply visiting a webpage. Frequent interactions can also help because the information is more recent, although some businesses might see customers less often and still catch them at particularly valuable moments like renewal.
Commerce media is a competitive market, and so businesses need to be crystal clear on what makes their audience different. Advertisers have plenty of ways to reach broad demographic and interest groups, which means they need to be given a good reason for paying to reach a new audience.
The right commerce media proposition can present customers with personalised, relevant deals at the best time for them, while offering advertisers an audience with whom their products will resonate.
Consumer signals only work when brands can act on them
Then there’s the question of what to do with those insights. If brands can only use those insights to reach customers onsite – in other words, on a business’ own website or app – the opportunity is limited by how many people are there and how much advertising can reasonably be shown to them. And that’s a wasted opportunity.
Offsite media is one option for going beyond the constraints of onsite: advertisers can reach those audiences as they move across websites and engage with online video, connected TV and other digital channels. Again to use Confused.com as an example, its audience signals enable non-insurance advertisers to reach valuable, addressable audiences at scale, from car owners and homeowners to families with children, business owners and high-net-worth households.
That level of breadth, depth and intent means any business looking at data monetisation must be able to recognise their customers as they move between different devices, sites and channels, and do that with both scale and accuracy. Not all identity is equal, however, and advertisers will quickly see the difference between an audience that can be matched confidently and one that looks valuable in theory but is hard to activate in practice.
It also means having the right consent and controls around how customer data is used, and being able to measure what happens after someone sees the advertising.
Success with commerce media begins with giving non-retailers a genuine reason to look at their customer relationships differently. Advertisers want to get to know their customers better and, most importantly, understand when they are actually in-market. This untapped media opportunity may well be the answer to their prayers.
