Retail media has become a hot topic in the digital marketing world. With the rapid rise of e-commerce and changing consumer behaviours, retailers are transforming into digital advertising platforms, giving brands and advertisers a chance to target shoppers directly at the point of purchase.
A recent discussion between industry experts sheds light on the state of retail media and what’s truly driving its expansion. But what does this mean for affiliate marketing? How can affiliates and affiliate managers adapt to and benefit from these developments?
In this blog post, we’ll explore how the growth of retail media impacts affiliate marketing and what affiliate managers need to know to stay ahead in this evolving landscape.
The rise of retail media: what’s driving it?
Retail media is a fast-growing segment within digital marketing. As retailers build out their own ad platforms, they are offering brands the ability to promote products directly on their websites or apps. These ads appear at key touchpoints, from product listings to checkout pages, ensuring that brands reach shoppers when they are most likely to convert.
There are a few key drivers behind the growth of retail media:
1.Direct access to high-intent shoppers
Retail media allows advertisers to target consumers while they are actively shopping. This level of intent far surpasses that seen on general ad platforms like Google or Facebook, where users might be in the research phase. In contrast, shoppers on retail platforms are often ready to make a purchase, which results in higher conversion rates.
2.First-party data
Retailers have access to a wealth of first-party data, including purchase history, search behaviour, and shopping preferences. This data enables retailers to create highly targeted ads, offering brands a more personalised and relevant way to engage with their customers.
3.Diversification of revenue streams for retailers
As traditional retail margins shrink, many retailers are looking for new ways to monetise their digital platforms. Retail media offers a significant revenue stream, allowing retailers to capitalise on their digital real estate by selling ad space to brands.
For a more in-depth discussion on the current state of retail media, check out this report.
What does this mean for affiliates?
For affiliates, the rise of retail media presents both opportunities and challenges. Retail media offers new advertising channels that can be integrated into affiliate strategies, but it also introduces more competition. Here’s what affiliates should be aware of:
1.New opportunities for collaboration
Affiliates who partner with retail platforms can now access new ad spaces within e-commerce websites. By integrating retail media ads into their own content strategies, affiliates can promote products at various points in the shopper’s journey. For example, an affiliate focused on tech products could collaborate with a retailer’s ad platform to promote specific gadgets directly on the retailer’s website.
2.Targeting high-intent shoppers
One of the greatest advantages for affiliates is the ability to target shoppers who are already in a buying mindset. Affiliates can work with retailers to place product recommendations or sponsored content at strategic points, such as product listings or checkout pages, where the chances of conversion are significantly higher.
3.Leveraging first-party data
Retailers’ access to first-party data provides affiliates with more robust targeting options. By tapping into this data, affiliates can create more personalised marketing strategies. For example, an affiliate promoting fitness products can use a retailer’s data to target shoppers who have shown interest in health-related items, ensuring more relevant and timely ads.
4. Increased competition
While retail media offers new opportunities, it also introduces competition. Brands are increasingly investing in retail media ads, which could crowd the space and make it harder for affiliates to stand out. To compete effectively, affiliates will need to focus on high-quality content and leverage their ability to offer genuine product recommendations.
What Affiliate Managers need to know
Affiliate managers play a crucial role in navigating the rise of retail media. As retail media platforms become more sophisticated, affiliate managers must adapt their strategies to ensure their programmes stay relevant. Here are key takeaways for affiliate managers:
1. Partner with retailers
Retail media platforms offer affiliate managers the opportunity to partner more closely with retailers. By integrating affiliate marketing with retail media strategies, affiliate managers can ensure that their programmes are aligned with the broader goals of their retail partners. For instance, working together to develop joint campaigns that leverage the retailer’s ad platform can drive higher sales and conversions.
2. Focus on attribution
With the increased complexity of retail media, attribution becomes even more important. Affiliate managers must ensure that they have clear tracking and reporting mechanisms in place to credit affiliates appropriately. By working with retailers to set up accurate attribution models, affiliate managers can better measure the impact of affiliate-driven traffic and conversions.
3. Leverage data for personalisation
As retail media continues to grow, the use of first-party data will become a competitive advantage. Affiliate managers should focus on personalising affiliate content based on data-driven insights. By offering affiliates access to retailer data—such as customer preferences, purchase behaviour, and demographics—affiliate managers can empower affiliates to create more targeted and relevant campaigns.
4. Diversify affiliate channels
As the retail media landscape evolves, affiliate managers should look for ways to diversify their channels. This includes exploring new ad formats, such as sponsored product listings or display ads on retail platforms, in addition to traditional affiliate links. By diversifying their approach, affiliate managers can ensure that their programmes stay flexible and adaptable to the changing digital environment.
The future of affiliate marketing in retail media
Retail media is reshaping the way brands advertise, creating both opportunities and challenges for affiliates. By tapping into retail media platforms, affiliates can access new ad spaces, target high-intent shoppers, and leverage first-party data for more personalised marketing. However, the growing competition in retail media means that affiliates must focus on creating high-quality, relevant content to stand out.
For affiliate managers, the key is to integrate affiliate marketing with retail media strategies, ensure robust attribution models, and use data to personalise campaigns. By staying ahead of these trends, affiliates and managers alike can maximise the potential of retail media in 2024 and beyond.
For a detailed discussion on the state of retail media and its future, download the full industry report here.
