MadTech Sketch: The Retail Media Stack

Retail media continues to be the hottest category in ad tech right now. A new RMN (retail media network) is coming to market almost daily, driven by endemic advertising demand.  PayPal, for instance, announced its plans recently to launch an ad business.

The tech stack powering these solutions is critical to making RMNs work for onsite advertising and audience extension (retail data).  

But what does a retail media stack (RMS) look like, and what are its core components? In this MadTech Sketch, I break down the RMS.  

Here are the critical pieces of the retail media stack: 

• UI/Buyer Portal: Manage and activate on-site and off-site campaigns (campaign set-up, analytics et al).
• PLA marketplace: The critical cog in the retail media stack.  Key functions include managing 1000s of native ad creatives, keyword targeting and campaign KPI set-ups.
• Audience extension: The RMS segments and activates first-party data for buyers on the open web and walled gardens. Often, this is less about lower-funnel marketing and more about prospecting - driving awareness.  The area of “retail data” will be a big subject of debate in the next twelve months as big FMCG brands look to scale marketing budget beyond sub-scaled RMNs.
• Attribution:  This is arguably the most critical part of the retail media stack.  Connecting ad spend to offline and online sales is the driving factor for buyers.  ROAS is everything. But can the RMS get access to sales data to calculate ROAS?  In short, it needs access to sales data to be helpful to buyers.

Criteo, Kevel, CitrusAds, and Nexta are notable scaled players in the RMS category.  

You will hear a lot about “retail data” in the next twelve months. This term is less about onsite ads like PLAs (product listing ads) and more about leveraging first-party data at scale using DSP (open web) and walled garden activation. 

RMS vendors will be a big part of that, as they help segment and activate retail data for endemic brands. Retail media begets retail data. Both are connected, and the RMS is the connective ad tech tissue.     

Audience extension is only one part of the RMS, though.  Retailers/marketplaces and their endemic advertisers seek more functionality - specifically around on-site activations, keyword targeting, native ad creative management and attribution. A good RMS provides all of these capabilities.