Retail media is transforming digital advertising. In 2024 alone, global Retail Media spending was estimated to be $136 billion.
Brands and retailers alike are recognizing the value of first-party data and targeted ad placements. By establishing their own Retail Media Networks (RMNs), retailers can control their advertising environments while providing brands with more precise targeting and measurable returns.
However, simply launching a RMN isn’t enough. Maximizing its impact requires a strategic approach to search and discovery, ensuring that ad placements not only enhance the shopper experience but also drive meaningful revenue. Discover how to optimize said approach below.
Creating Your Own Retail Media Network (RMN)
When retailers create their own RMN, they retain control over ad spend that might otherwise be directed to third-party platforms, like Amazon Advertising, Walmart Connect, or Target Roundel. This shift allows retailers to fully capitalize on the value of their first-party data and traffic, rather than relying on external ad networks.
By offering brands a direct route to reach customers within their shopping environments, retailers create a more competitive Retail Media landscape and provide an alternative to the dominance of major players.
How customized RMNs benefit retailers
Creating your own RMN benefits retailers as much as it does customers.
- New revenue streams: Retailers earn income beyond product sales by monetizing their traffic and data
- Control over ads: Retailers have full control over the types of ads displayed, ensuring alignment with their brand identity and the overall shopper experience
- Enhanced shopper experience: Well-placed, relevant ads can enhance product discovery and improve conversions without overwhelming or frustrating shoppers
- Optimized ad placements: By balancing monetization with customer satisfaction, retailers can foster long-term engagement and increased revenue
How it works
Retailers can monetize their digital real estate by offering various advertising opportunities on their ecommerce sites. These placements enable brands to connect with shoppers at critical moments in the buying journey while leveraging first-party data for precise targeting.
- Ad inventory & placements: Retailers integrate various ad formats — such as sponsored product listings, display ads, and banners — across their websites and apps to increase brand visibility and engagement
- Data-driven targeting: By using detailed customer insights, including browsing history and purchasing behavior, retailers enable advertisers to serve personalized and relevant ads to the right audiences
- Revenue growth: Retailers generate additional revenue through ad sales, whether based on impressions, clicks, or conversions, turning their digital real estate into a profitable asset beyond traditional ecommerce sales
On the home24 website, shoppers see sponsored listings based on their personal browsing history.
How to Optimize Your Retail Media Strategies
To maximize the value of an RMN, optimization must go beyond ad placement. It should enhance the shopper experience while promoting revenue growth. Here’s how retailers can fine-tune their Retail Media strategies.
Leverage first-party data effectively
Retailers have access to rich data sources including purchase history, browsing behavior, and customer preferences. By using these insights from clickstream data, they can help brands deliver highly relevant ads that improve engagement.
For instance, a customer who frequently purchases skincare products may be shown sponsored listings for complementary items, like makeup wipes or skin supplements. This increases the likelihood of conversion.
SEPHORA shows complementary ads based on shoppers’ past behaviors. These ads appear among search results and in banners, among other places.
Invest in scalable ad technology
Retailers should adopt ad tech solutions that can scale with growing demand and evolving advertising needs. A robust platform should include:
- Seamless ad placement across multiple formats, from sponsored listings to display ads
- Real-time reporting tools to monitor ad performance and optimize strategies dynamically
- Advanced performance analytics that help maximize revenue without sacrificing user experience
Optimize search and product discovery
A strong Retail Media strategy means that sponsored placements enhance — rather than disrupt — the shopping journey. Shoppers should be able to easily find what they’re looking for, whether through organic search results or well-integrated sponsored content.
Advanced AI-powered solutions can help retailers by:
- Integrating sponsored ads seamlessly within organic search results without interrupting the shopping experience
- Improving relevance by analyzing shopping behavior to serve more personalized ad placements
- Boosting advertiser ROI while maintaining customer satisfaction by ensuring ads feel intuitive and helpful rather than intrusive
Optimize ad placements for engagement
Strategic ad placement is critical for maximizing engagement. Prime real estate includes high-visibility sections such as category pages, search results, and checkout pages.
Placement, however, should be data-driven and based on where shoppers are most likely to interact with ads without detracting from their experience. Depending on your RMN vendor, they can help you test this and other hypotheses to optimize revenue.
Implement a self-service advertising platform
Retailers can streamline operations and attract more advertisers by implementing a self-service advertising platform with dedicated profiles for both retailers and advertisers. This setup enables collaborative ad management while reducing operational overhead.
- Advertisers’ platform: This user-friendly self-service portal allows advertisers to independently create, manage, and monitor their campaigns in real time. By providing intuitive tools and automation, retailers can make their network more accessible, encouraging advertiser participation
- Retailers’ platform: This dashboard allows retailers to oversee campaigns, set ad bids, track spend, clicks, costs per click (CPC), revenue, and return on ad spend (ROAS). Retailers can also configure granular page-level settings to determine where advertisers can place their ads to align their brand strategy with customer experience
Continuously monitor and optimize
Retailers must track campaign performance and identify areas for improvement through advanced analytics. Continuously optimizing their Retail Media strategy means continuing to maximize revenue and improve advertiser relationships.
- Performance tracking: Use real-time analytics to monitor key metrics such as spend, conversions, and ROAS
- Data-driven recommendations: Provide advertisers with detailed reports on campaign performance and actionable insights to refine their strategies
- A/B testing: Experiment with different ad placements, formats, and targeting options to determine the most effective approach
Collaborate with trusted partners
Retailers can enhance their Retail Media strategy by working with proven technology providers that specialize in AI-driven ad placement optimization.
- AI-powered Sponsored Listings: This Retail Media solution ensures ads enhance the shopping journey while driving revenue
- Shopper-first approach: These same tools also help retailers maintain a balance between revenue generation and customer satisfaction by integrating relevant ads that improve product discovery
- Optimized ad placements: They also are built upon machine learning algorithms that determine the best placement for sponsored content, ensuring both visibility and a seamless user experience
The Hidden Retail Media Revenue Engine: Optimized Search and Product Discovery
Optimized search and product discovery is essential for increasing conversions and driving profitability within RMNs.
Unlike traditional Retail Media approaches that may create friction between organic search results and sponsored listings, AI-native Retail Media solutions like Constructor’s ensure ads appear only where they enhance the shopping experience and contribute to overall revenue growth.
This is possible thanks to the Native Commerce Core, which uses machine learning and real-time clickstream data to dynamically optimize ad placements per user. Instead of competing with organic results, Constructor’s algorithm determines the ideal balance between sponsored and organic listings — which leads to ad placements maximizing value without compromising the user experience.
This approach helps increase conversion rates and boost long-term revenue without negatively impacting customer satisfaction or brand reputation.
Start Optimizing Your Retail Media Strategy
To fully realize the value of Retail Media, retailers must adopt a solution that balances organic and ad-driven revenue. Constructor’s AI-powered approach helps retailers achieve this balance by ensuring sponsored content supports — not disrupts — the shopping experience.
By leveraging personalized ad placements and continuous optimization, retailers can drive higher engagement and maximize their revenue potential.
Discover how personalized ads can boost your bottom line with Constructor’s Retail Media solution.
Frequently Asked Questions
- What is a Retail Media Network?
A Retail Media Network (RMN) is an advertising platform operated by a retailer, offering third-party brands the ability to purchase ad placements directly within the retailer’s digital ecosystem. Unlike traditional ad channels, RMNs provide unparalleled access to consumer intent data, enabling advertisers to place relevant ads at critical moments in the shopper journey. Brands benefit from greater visibility while retailers unlock new revenue streams beyond product sales.
- How big is the Retail Media industry?
The industry is huge. Global retail media spend is estimated to hit at least $140 billion this year, accounting for more than a fifth of all digital ad spending. This represents a 21% year-over-year increase from 2023 and highlights the growing importance of retail media networks.
Amazon alone generated $46.9 billion from retail ads, making it the third-largest advertising platform in the U.S., behind Google and Facebook. The scale of this market underscores the revenue potential for retailers investing in their own media networks.
- Why is Retail Media so intricately tied to search and product discovery?
Search and product discovery directly influence how shoppers engage with an ecommerce platform. Retailers that optimize search functionality can increase ad relevance, improve conversion rates, and enhance the overall shopping experience. By integrating AI-driven discovery tools like those offered by Constructor, retailers can ensure sponsored content feels natural rather than intrusive.
- How do I present the value of Retail Media diversification to stakeholders?
Stakeholders prioritize ROI and measurable results. To demonstrate value, present comparative performance data from top RMNs alongside long-tail retailers. Highlight case studies from similar industries that demonstrate how diversification increases conversion rates and engagement. Tools like Constructor’s analytics dashboard provide data-driven reports to reinforce business cases for investment in Retail Media.
- What metrics should I prioritize to evaluate Retail Media success?
The most critical metrics include:
- Return on Ad Spend (ROAS): Measures revenue generated per ad dollar spent
- Average Order Value (AOV): Tracks the average transaction amount
- Revenue Per Visit (RPV): Assesses how ads contribute to overall sales
- Conversion Rates: Indicates how effectively ads drive purchases
- Impression Share & Click-Through Rates (CTR): Help determine ad visibility and engagement levels
- Customer Acquisition Costs (CAC): Provides insight into the efficiency of ad spend in acquiring new customers
Monitoring these KPIs can help retailers make data-driven optimizations to maximize the long-term performance of their Retail Media strategy.
- How long does it take to see results from Retail Media optimization?
Timelines vary based on campaign size and goals, but many retailers see measurable improvements within weeks of implementing optimization strategies. A/B testing and continuous performance analysis ensure that ad placements evolve dynamically, maximizing efficiency. With Constructor’s AI-powered personalization and search optimization solutions, retailers can drive incremental revenue gains quickly.