Retail media platforms are growing rapidly – the ANA predicts a 26% increase in ad spend on retail media networks this year – and will dominate future ad spend. Brands like Walmart, Amazon, and Instacart see billions from their custom, in-house retail media ad platforms. As other retailers look to do the same, they're asking themselves: “Should I own the platform or outsource it to a retail media ad network?”
Building from scratch is complex, and few companies have Amazon’s time, money, and resources to launch a flexible, full-featured ad platform.
The alternative isn’t ideal: while retail media ad networks provide instant access to tech and advertisers, they come with limited customization and ad tech middleman fees.
Or, unfortunately, retail brands often avoid ad monetization altogether, a boon to competitors who have their own.
In this article, we discuss the pros and cons of owning versus outsourcing your retail media platform, what other options are out there, and why owning your retail media platform is ultimately the best way to scale your business.
Retail media means monetizing your digital space, whether online or in-store, by allowing your partners to promote their products throughout the user’s browsing experience. Ideally, your retail media platform has the flexibility to reach users in-app, online, and in-store, with personalization based on customer data.
Retail media is dominated by the eCommerce giants: Amazon takes 75.7% of current eCommerce ad spend, with Walmart second earning 4.9%. But other brands like MC Sonae and iFood have built profitable retail media platforms too. When it comes to launching a successful retail media platform, you must first recognize the value in investing in an additional revenue stream.
None of the aforementioned companies use retail media networks, but many retailers do, as these out-of-the-box solutions provide sponsored listings tech, turnkey access to advertiser demand, and a known self-serve platform.
This seems appealing, but is not a long-term solution for retailers who want to maximize their ad revenue, as:
In-house retail media is emerging as a powerful way to regain ad serving control, provide differentiated ad format and targeting offerings to advertisers, and prioritize your ad business. Top revenue-driving ad platforms like Amazon and Walmart all have in-house retail media networks, and they all see millions and even billions in year-over-year revenue.
You own your in-store shopper marketing, so why not online too?
Retailers practiced shopper marketing for years, maintaining total control of how product placements appeared in store. It’s important to bring this control to your digital ad platform too, which you can only accomplish through building the ad platform yourself on your terms.
As 40% of advertisers and agencies have secured new budget or non-media budgets for retail media, a 31% jump from 2023, it’s clear that advertisers are ready to invest in retail media. But they want to work with you directly. They want you to target their ads better with first-party data. They want their ads to be customized and user friendly with your site. They want direct relationships – and they’re willing to pay for it.
Top retail media platforms are effectively walled gardens: ad platforms in which publishers handle all the buying, serving, tracking, and reporting. They maintain total control over their eCommerce ad platform, enabling full customization and scalability.
Many large retailers opt to build their walled gardens completely from scratch, although this won’t work for everyone. Building from scratch is costly, and you could spend hundreds of thousands of dollars on server fees, engineering salaries, and maintenance costs.
Additionally, building a full-featured retail media platform takes years. Every day you don’t launch is a day of lost revenue.
Launching an in-house retail media strategy can yield substantial revenue growth and better customer engagement. Here are three technology options when deciding how to build your retail media platform:
Traditional retail media solutions offer a convenient way to enter the retail media space, with turnkey solutions that make for quick integrations and ad placements. If you want to start generating revenue quickly, these solutions are the fastest. But bear in mind that black-box solutions mean going without extensive in-house capabilities and oftentimes lack customizable or engaging ad formats. Depending on the solution, black-box commerce media solutions could also become expensive or even hinder growth due to ongoing fees or revshare models.
Building a commerce media solution in-house offers the greatest opportunity for customization and flexibility, as brands can tailor the platform to meet their specific business needs and ensure every aspect aligns with their branding and goals. However, building an in-house program from scratch also requires significant upfront costs in time and money -- this approach typically requires expertise in the form of a dedicated team and could still take years to launch. It’s important to note that following launch, an in-house build will still require ongoing maintenance in both time and money.
Kevel offers a more balanced approach to retail media, providing both flexibility and customization without the extensive time and cost investments. The Kevel Retail Media CloudTM is the only solution that allows you to build an in-house ad platform without building from scratch at scale.
Kevel’s Retail Media Cloud™ powers retail media networks through flexible API offerings that enhance the shopper experience. With Kevel, there is no need to forfeit any control over your first-party data, and Kevel’s ad tech infrastructure has empowered multi-brand retailers to build, manage, and launch differentiated retail media networks in as little as 14 days.
Retail media isn’t a build vs buy decision. There is, in fact, a third option: in-house your retail media faster with Kevel’s Retail Media Cloud™. Kevel gives you the tools you need to in-house, eliminating third-party fees, allowing you to maintain data ownership, and better positioning your brand to stand out. Build your own retail media platform in just weeks and save what could be millions in costs and years in build time.
With retail media expected to be a 50 billion dollar industry by 2026, the time to launch yours is now. Contact us today to get started.
