Retail media platforms are growing rapidly – with 38% year-over-year growth in 2020 – 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, and we highlight why owning your retail media platform is 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 smaller brands like SlickDeals and Chairish have built profitable retail media platforms too. What matters isn’t your size, but rather your desire to invest 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:
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. The benefits of this approach include:
As 60% of ad spending is going digital by 2023, clearly, advertisers are ready to migrate to 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.
Retail media isn’t a build vs buy decision. There is, in fact, a third option: build it faster with Kevel’s ad APIs. With Kevel, you get the tools to build your own retail media platform in just weeks, saving you potentially millions in costs and years in build time.