Adtech for Retailers: How are Retailers Leveraging Retail Media for Revenue?

In the digital marketplace, Adtech has become a vital tool for retailers aiming to enhance their revenue streams. This technology acts as a strategic driver, enriching digital campaigns with precision and advanced insights. For a retailer, understanding advertising technology means using tools that can target campaigns to the audience segments most likely to convert, maximizing impact of every ad dollar spent. 

In this blog let’s explore how Adtech for retailers drives business growth, refines marketing efforts, and turns clicks into customers.

What is Adtech?

Adtech, also known as advertising technology, represents a suite of digital tools and analytics platforms that empower retailers to deliver targeted campaigns. Adtech simplifies how you can use large amounts of consumer data to show ads across the internet in an efficient way. It involves advanced software and algorithms that automate ad buying, streamline campaign management, and accurately measure campaign performance.

For retailers, Adtech provides a strategic advantage in competitive markets, as it allows for personalized advertising that aligns with the preferences of diverse consumer segments. By leveraging Adtech, you can ensure that your marketing messages are broadcast widely and delivered with precision to encourage engagement and drive conversions.

The Ad Tech Landscape: Basics Every Retailer Should Know

Navigating the Adtech landscape is critical for retailers aiming to maximize their digital advertising efforts. Each element within this ecosystem plays a unique role in ensuring that your advertising reaches and resonates with the target audience. Let’s have a look at the core components of this ecosystem.

Demand Side Platform (DSP)

A Demand Side Platform (DSP) allows retailers to automate the purchase of digital ad inventory. It’s a tool that bids on and buys advertising space across the web on your behalf, targeting specific user profiles that are most likely to engage with your brand. For instance, a fashion retailer might use a DSP to target fashion enthusiasts on various social media and content sites during a new product launch, ensuring that the ads appear where these users are most active.

Supply Side Platform (SSP)

A Supply Side Platform (SSP) is the publisher’s version of a DSP. It is designed to sell ad space automatically to the highest bidder, ensuring publishers maximize their revenue potential from available inventory. You can consider a popular retail marketplace that uses an SSP to fill its ad spaces with high-paying ads from various fashion advertisers, optimizing its ad revenue.

Ad Servers

Ad servers are the backbone of digital ad distribution, hosting the ads and serving them to your website or app. They collect data on ad performance, enabling retailers to tweak campaigns for better results. For instance, a retailer could use an ad server to rotate different shoe ads on its homepage and track which designs drive the most clicks, refining future ad placements.

Agency Trading Desk

An Agency Trading Desk is a managed service, often within an ad agency, offering programmatic advertising services and media buying services. It combines technology, data, and expertise to buy and optimize digital campaigns across different channels more efficiently than traditional methods. For example, an agency trading desk might assist a retailer by purchasing ads inventory across multiple DSPs to build a campaign targeting sports enthusiasts for a new line of athletic wear.

Retail Media Networks

Retail Media Networks are platforms where retailers leverage their digital real estate for advertising, allowing brands to place ads directly where the purchase happens – on the website or mobile devices. For instance, a home improvement store might create a retail media network, allowing tool brands to advertise directly to DIY enthusiasts browsing its product pages.

Retail Media Platforms

Retail Media Platforms offer the technology for retailers to manage and sell their ad space, providing tools for ad placement, targeting, and performance analytics directly on their digital assets. For example, a retail media platform could enable a grocery chain to sell ad space next to its online produce section, with analytics to track ad performance and shopper engagement.

Now, it is time to explore how these Adtech tools are not just about serving ads; they are about building a digital environment that enhances brand visibility, drives consumer action, and leverages the shift toward data-driven marketing.

Related reading: How retail media platforms are different than agency ad tools

Why Retailers Should Care About Advertising Technology?

Today when data privacy is critical, retailers are re-evaluating the tools they use to reach customers. The phased elimination of third-party cookies has been a catalyst for change, compelling retailers to turn to solutions that rely on first-party data. This shift is not merely a response to a changing regulatory landscape; it represents a strategic move toward building robust retail media solutions.

Retailers, with their established websites and precious first-party customer data, are uniquely positioned to capitalize on this shift. By developing your own retail media solutions, you can create personalized advertising experiences that resonate with the customer base, driving both engagement and sales. It’s a move that places you in control of the advertising narrative, turning your digital real estate into a powerful platform for brand promotion.

The transition to retail media networks offers a closed-loop marketing advantage, as it directly ties ad spending to digital sales, providing clear and measurable ROI. This benefit is critical in the post-cookie digital advertising landscape, where tracking the consumer journey from ad exposure to purchase is becoming increasingly challenging.

For retailers, investing in their own Adtech solutions is not just about adapting to privacy changes; it’s about seizing the opportunity to refine their marketing strategies and fostering direct relationships with customers. This approach ensures that you are not just one of the participants in the digital advertising ecosystem but are a partner in its evolution.

Now, let’s progress to the next section and learn the specific reasons why retailers should not only care about Adtech but actively embrace it as a cornerstone of their digital strategy.

Related reading: Retail media for brands: The profitable way to advertise in a cookie-less digital world

Reasons Why Retailers Should Use Modern Adtech

Modern retail media technology offers incredible control over how products are marketed, ensuring that every campaign hits the mark. Let’s have a look at some of the main reasons driving an increasing number of retailers towards integrating Adtech with their operations.

Precise Targeting and Personalization

Adtech platforms dissect customer interactions, allowing retailers to direct their marketing efforts accurately. A customer’s previous purchases and viewed items inform the next ad they see, ensuring relevance at every turn. This isn’t just about selling more; it’s about creating a personalized journey for each customer.

Consider a retailer specializing in outdoor gear. By leveraging Adtech, they can analyze a customer’s browsing habits, identifying their interest in camping equipment. The next time that customer visits, they’re greeted with personalized ads for tents and hiking boots, enhancing the shopping experience and encouraging a transaction.

Increasing Sales and Profit

Adtech turns browsing into buying. Retailers use it to strategically place the right product in front of the right customer at the right time. The result? A boost in sales figures and profit margins. It’s the difference between a customer leaving with a single item and a full basket.

Take, for example, a book retailer using an Ad Tech platform to track a customer’s interest in historical fiction. By targeting this customer with ads for new releases in that genre, the retailer not only increases the likelihood of a sale but also has the opportunity to upsell with a curated selection of similar titles.

Generating Ad Revenue

Beyond selling their products, retailers can monetize their digital space by offering ad slots to other brands. This creates a dual stream of revenue, i.e., direct sales from products and ad sales from their digital real estate, optimizing every square inch of their online presence.

A prime example is a retailer website with a high-visitor volume establishing a retail media network. Here, other brands can advertise their latest products to visitors. This not only enhances the shopping experience with relevant product ads but also opens up a significant revenue stream through ad sales.

Adtech is an essential tool for retailers aiming to thrive in the digital landscape as it offers a trifecta of benefits, i.e., precise ad targeting, growth in direct sales, and additional ad revenue channels. As there is no denying that Adtech is a critical player in the future of retail profitability, it becomes essential to learn more about the emergence and growth of retail media networks.

The Emergence and Growth of Retail Media Network

The rapid growth of Retail Media Networks (RMNs) is transforming the landscape of retail advertising. As retailers adapt to a digital-first economy, RMNs are becoming important for capturing consumer attention at the point of purchase and leveraging first-party data for personalized marketing. Let’s explore the key facets of the emergence and growth of RMNs.

How do Retail Media Networks Work?

RMNs transform a retailer’s website or app into a dynamic advertising venue. When consumers browse these digital platforms, they encounter ads seamlessly integrated into their shopping experience. These ads are strategically placed across digital media to ensure they align with the consumer’s shopping habits and preferences.

By leveraging data such as purchase history and search behavior, RMNs can predict which products a consumer is likely to be interested in and display ads for those items at the most opportune moments.

Growth and Demand

The demand for RMNs is surging, with advertisers dedicating a growing share of their budgets to these networks. An estimated 73 percent of advertisers plan to increase spending on RMNs in the coming year, signifying their potential to capture 10 to 15 percent of total media spend​​. Retail media is an evolving channel, with advertisers spreading their investments across multiple RMNs, seeking those that offer the best value and performance​​.

Benefits of RMNs

The strength of Retail media platforms lies in their ability to offer superior performance, access to niche audiences, and transparency in advertising. High-performing RMNs can deliver significant value to both the media network and advertisers. Some networks are seeing double-digit year-over-year growth, and advertisers are enjoying up to ten times the return on advertising spend​​. 

As Adtech for retailers continues to evolve, embracing RMNs is an essential step toward future-proofing retail businesses in the digital age. This is where the role of Adtech companies comes to the fore. Let’s learn more about their importance in the ecosystem.

Role of Ad Tech Companies in Helping Retailers

Adtech companies are offering retailers sophisticated platforms that harness the power of big data, AI, and machine learning. These companies provide the technological backbone that allows retailers to understand and act on consumer behavior in real-time.

Leveraging Big Data, AI, and Machine Learning

Adtech for retailers leverages Big Data to analyze consumer trends and shopping patterns, enabling predictive analytics that can forecast future buying behavior. AI and Machine Learning algorithms process this data to automate and optimize ad campaigns, making them more efficient and effective. For instance, a retailer might use these insights to anticipate seasonal trends and adjust digital ad campaigns accordingly to capture market demand.

Contextual Targeting

Contextual targeting is another area where Adtech companies are helping retailers thrive. By analyzing the content that consumers are currently viewing or interacting with, Adtech platforms can serve ads that are related and relevant to that context. This means that a shopper reading about the latest fashion trends may see ads for clothing items that directly relate to the article’s content, making the ad feel less intrusive and more like a helpful suggestion.

Adtech for retailers is about creating an environment where every ad has the potential to be a timely, relevant, and welcome part of the consumer’s shopping journey. As we move into the future, the role of Adtech companies in retail will only grow more significant, helping retailers reach their target audience and engage with them more meaningfully.

Related reading: Everything you need to know about contextual targeting 

Use FCC's Adtech Platform to Reach the Right Audience

For retailers seeking to navigate the complexities of digital advertising, Flipkart Commerce Cloud offers a solution that simplifies and enhances the ad management process. With FCC’s Ads Manager, you can seamlessly integrate sophisticated ad campaigns into your strategy, ensuring each customer interaction is fully optimized for engagement and conversion.

Our retail media advertising platform has been designed to monetize every customer visit, boost engagement with brands, and ultimately drive conversions. FCC’s Ads Manager is a one-stop solution to build a completely sponsored ads ecosystem​​. It allows you to onboard display ads, which can quickly add a new revenue stream and increase brand engagement on their platform. 

With FCC’s Ad Manager platform retailers can:

  • Run display ads for instant revenue 
  • Offer sponsored listings with customer context based ads 
  • Get experts’ consult & implement high yielding ad revenue models.
  • Build your own ads’ ecosystem at relatively fractional effort and investment.

Eager to learn more about how FCC’s retail media solution can help? Contact our experts today!

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