Retail Media Plan for 2023 – Marketplace Success Factor
The year 2022 has passed and so has the phase of annual financial closings, reportings and budget planning – so it’s time to focus on the marketplace business again for 2023. In this blog post, we have summarized why a well-thought-out retail media plan is an important factor for success on marketplaces and what there is to consider when designing a retail media plan.
from Alina Scheruhn
Competition on marketplaces
The e-commerce business, and with it marketplaces, have been experiencing enormous growth for a while now. The media agency network GroupM predicts that by 2027, a quarter of retail sales will be attributable to the e-commerce business. But more demand for marketplaces also means more competition among retailers, which is also the case at OTTO. So how do retailers and brands manage to stand out from the crowd and increase the reach and visibility of their products? The answer is retail media. Retail media is one of the fastest growing digital advertising categories. According to the latest Warc Reports, retail media will become more valuable to advertisers than TV by 2025 if growth remains steady.
Retail media began as advertising in the direct buying environment, for example at OTTO. In the meantime, retailers are reaching potential customers along the entire customer journey with this type of advertising. With the three main products SPA, SDA and DOOH, which can be assigned to the respective marketing funnel stages of conversion, consideration and awareness, retailers and brands address customers along the entire marketing funnel – whether on the marketplace or beyond. Retailers therefore use retail media not only to increase their sales, but also to raise awareness of the brand and the product. To use retail media efficiently and effectively, a strategic approach is required. Here are five tips to show you what that can look like.
1. Marketing plan
An overall marketing plan is one of the annual To Do’s in most companies to formulate strategies, define clear goals, prioritize activities and plan resources. Such a plan serves as the basis for specific retail media planning.
2. Objective setting
In addition to the overarching marketing objectives, a successful retail media plan also builds on specific objectives for the particular marketplace. In this way, advertisers not only select the appropriate advertising solutions, but also make the success of the activities measurable. Achievable goals and the definition of measurable key performance indicators (KPIs) are particularly important. This may look similar to the following:
Example objectives for 2023:
- Increase brand awareness
- Increase awareness of the product range and the brand
- Increase visibility for the brand and the product
- Increase demand and sales by xy percent
Key KPIs for measuring success:
- Impressions: The number of times an ad was played
- Clicks: The number of times an ad was clicked on by customers
- Click-through rate (CTR): The rate of interaction with an ad (clicks/impressions)
- Return on Advertising Spend (ROAS): The profitability of an ad (spend/revenue)
- Effective Cost per Click (eCPC): The effective cost, for one click on an ad
3. Peak times
Peak times describe phases with particularly high order volumes. For example, customers like to buy gardening tools in the spring, while advent calendars clearly reach their peak in November. If you know these times, you can promote your products even better. A successful retail media plan is therefore also based on the peak times of the respective industry, the product portfolio, and the target groups. In addition, the measures, the messages and the design of the campaigns must be adapted to the respective peak time.
Those who do not yet have an overview of the peak times of their own product ranges can carry out a data analysis of demand and sales, but also of the performance of different campaigns from the previous year. From this, it is possible to deduce which assortments and which campaigns worked well with which messages and content on specific occasions. Tip: It is always useful to keep an eye on recurring peak times, such as Black Friday or Christmas, as well as the peak times of the respective marketplace.
4. Sales promotion
Sales promotions are another important factor in a retail media plan. Sales promotions are temporary promotional activities that increase the incentive for customers to buy and are aimed at boosting sales. A well thought-out retail media plan takes planned sales promotions into account and uses advertising solutions to make them visible to potential customers. It can also make sense to support planned promotions with additional sales activities at peak times, for example, in order to achieve the goal of increasing sales in the best possible way.
5. Runtimes, optimizations & reportings
Before creating the retail media plan, it is crucial to consider a few basic points: important are the advance times for booking advertising solutions of the respective marketplace. A well-thought-out retail media plan therefore includes enough buffer times and a strategy for advertising procurement.
In self-service, most marketplaces even offer automated creation of advertising media. However, retailers must also provide their own marketing assets such as logos and product images here. Speaking of Self Service: In the first step of retail media planning, it is essential for retailers and brands to first decide between the self and managed service. These two services differ, among other things, in the type of consultation and the minimum booking volume.
It is also important to plan the campaign duration flexibly and open to any changes. This allows advertisers to react at any time, optimize the campaign and thus increase its performance. Reporting helps to retrospectively evaluate how successful the advertising measures were and serves as a basis for an optimized retail media plan in the coming year. It is therefore crucial for retailers to look at all measures and the associated KPIs after each campaign and at the end of the fiscal year.
Our recommendation for your retail media plan
With the help of the various advertising solutions, retailers not only reach their customers along the entire customer journey, but also manage the advertising investments in a targeted and profitable manner throughout the year. To achieve the best possible results, the various advertising products must be strategically integrated into the retail media plan. Here we show how this can look using a retail media plan including product explanation for a fictitious barbecue manufacturer.
A presence with Sponsored Product Ads (SPA), i.e. highlighted articles at OTTO, of at least 70 percent of the total media budget forms the basis of the retail media plan. Why is that? SPA improves the visibility of articles in search results, product lists and recommendations on article detail pages. As a result, customers find items with SPA more frequently than comparable offers from competitors. As a result, retailers reach their customers in the transactional environment with high purchase affinity, which increases the conversion rate.
Building on SPA, Sponsored Display Ads (SDA), which are characterized by target group-specific targeting, can provide an additional push during temporary peak times. With the help of SDA, retailers reach and inspire new target groups and customers in the mid-funnel of the purchase decision process – on OTTO and beyond. Our fictitious barbecue manufacturer uses SDA in the spring to market the start of the barbecue season and in the run-up to Christmas, especially on Black Friday, to target and activate customers during the peak ordering period. To do this, the manufacturer first books an SDA on-site campaign at the respective peak time, i.e. display ads directly on otto.de or in the app, to inspire customers on the OTTO marketplace. In order to additionally draw the attention of potential new customers outside OTTO to the offer, the manufacturer is expanding the campaign to include an SDA offsite campaign that plays out the ads in the digital media environments of Spiegel, Handelsblatt, or Stern, for example.
In addition, other products, such as the Offer of the Week (AdW), support special sales campaigns. The AdW visibly identifies the sales promotion with an AdW flag, i.e. a disruptor or banner, on all product or item lists and on the item detail page. It makes particular sense to use AdW in combination with SPA to make the offer visible to all customers.
Many different factors play an important role in the conception of a retail media plan, such as the appropriate peak times, the suitable advertising products and the sales promotions that boost sales. However, careful planning pays off. The targeted use of advertising solutions helps retailers and brands stand out from the crowd and increase the reach and visibility of products along the entire customer journey. The bottom line: with a well-thought-out retail media plan, retailers increase their competitiveness on marketplaces. Interested? More information available here.