Unlocking the Power of Retail Media Networks in Streaming TV Advertising: A New Era for Brands

The Rise of Retail Media Networks in Streaming TV Advertising
Retailer media networks have been evolving rapidly in response to the growth of e-commerce and the decline of traditional TV viewership. As of 2023, retail media is projected to reach $45 billion in ad spend in the U.S. alone, with over a quarter of brands planning to increase spending on these networks streaming TV surpasses traditional cable in viewership, with 71% of U.S. households using at least one streaming service , retailunching streaming TV advertising partnerships to seize this opportunity.

These partnerships allow brands to leverage the unique blend of retail media’s data-driven approach with the brand-building power of TV, creating a new way to reach audiences where they are increasingly spending their time.

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1. Why Retailers Are Moving into Streaming TV Advertising

• Retail Media's Transformation: The rise of digital advertising in retail channels was driven by e-commerce growth, but with online shopping expected to account for 22% of global retail sales by 2025 , retailers are aeir media offerings to meet consumers on every platform, including streaming TV.

• Capturing the Streaming Audience: Streaming viewership in the U.S. reached 35% of total TV time as of 2023, surpassing both cable and broadcast . With the average America over an hour daily on streaming platforms , retailers are eyeing streaming ashannel to reach a captive audience.

• Direct Connections with Consumers: Retail media networks’ access to first-party data allows retailers to offer targeted streaming ads that few other advertisers can match. Amazon, for example, uses data from its vast e-commerce ecosystem to deliver ads that align with consumers’ shopping behaviors, increasing relevance and likely engagement.

eMarketer Retail Media Spend Projections Through 2027

2. In-House vs. Partnership Models for Retail Media Streaming TV Advertising

Retailers typically launch streaming TV advertising in one of two ways: building their capabilities in-house or forming partnerships with established streaming platforms. Each approach has unique strengths and trade-offs.

• In-House Streaming TV Solutions:
  Retailers like Walmart and Amazon have invested heavily to develop in-house streaming ad capabilities. For instance, Amazon’s DSP (Demand-Side Platform) allows brands to place targeted ads on Amazon Prime Video, leveraging the company’s unmatched shopper insights. This gives Amazon full control over ad formats, data, and targeting.

• Advantages: Full data ownership, seamless integration across platforms, and better ROI due to proprietary insights. Amazon’s ads reportedly drive conversion rates 3x higher than industry benchmarks, a testament to the power of their data .

• Challenges: Significant investmchnology and personnel are required, along with the complexity of managing streaming ad infrastructure independently.

• Partnerships with Streaming Platforms:
  Some retailers are opting to partner with platforms like Roku, Hulu, or Peacock instead of creating their own streaming solutions. Kroger, for example, collaborates with Roku, combining their shopper data with Roku’s broad reach to create targeted ads that resonate with viewers.

• Advantages: Access to an established streaming audience, lower startup costs, and the opportunity to use advanced ad tech without heavy investment. Roku’s ad revenues grew 18% year-over-year in 2023, demonstrating strong demand and growth potential for retail partnerships .

• Challenges: Limited control over ad plachigher costs per ad impression, with potential limitations on how retailer-specific data can be utilized.

3. What This Means for Brands and Their Advertising Strategies

For brands, this shift opens up new, data-rich avenues in the world of streaming, but it’s important to approach these opportunities strategically. Here’s how brands can make the most of these new capabilities:

• Data-Driven Targeting Opportunities:
  With retailers’ first-party data, brands can reach consumers based on actual purchase histories, browsing patterns, and preferences. This level of targeting is 30% more effective at engaging audiences than traditional demographic-based TV ads , making it a powerful tool for brands looking to drive highert.

• Cost-Effective Reach and Attribution:
  Retail media streaming ads offer a lower barrier to entry for brands, including small and medium-sized businesses. While TV advertising was traditionally out of reach for smaller brands, these streaming opportunities let them target narrower audiences, making it possible to get results on smaller budgets. Advertisers see an average of 11% higher ROI on streaming ads than traditional TV , partly due to better audience matching and performance tracking.

menting Other Advertising Channels:**
Integrating streaming ads with existing digital and in-store campaigns can reinforce a brand’s presence throughout the customer journey. For example, a brand can use data from in-store purchases to create retargeting campaigns on streaming platforms, delivering a cohesive omnichannel experience that aligns with a customer’s shopping habits.

• Choosing the Right Partner or Platform:
  Brands should carefully evaluate whether to go with a retailer’s in-house streaming service or a partner network. In-house options might offer richer data integration, while partnerships could expand reach and tap into diverse audiences. Brands should weigh factors like budget, target demographic, and data accessibility in making this choice.

4. Examples of Retailers Successfully Expanding into Streaming TV Advertising

• Amazon: Amazon’s Prime Video ad placements allow brands to leverage Amazon’s comprehensive first-party data to drive higher engagement. In 2022, Amazon accounted for more than 10% of the digital ad market , largely due to the strength of its data-driven ad offerings.

• Walmart
  Connect, the retailer allows brands to place ads across multiple platforms, including streaming. Walmart’s data integration helped its ad business grow by 40% in 2023 , highlighting the demand for retail-connected streaming options.

• Kroger & Roku: rtnership with Roku has enabled targeted streaming ads based on consumer purchase data, providing measurable lift in brand awareness and sales. This partnership saw an average 12% increase in ad recall for brands compared to non-targeted streaming ads .

5. Tips for Brands Considering Streaming TV Advertising Through Retail Networks

• Define Objectives: Start by identifying whether the goal is awareness, acquisition, or retention, and align the streaming campaign accordingly.

• Start with a Test Campaign: With many retail media networks offering flexible budgets for streaming ads, brands can start small, learn from initial results, and scale based on performance.

• Leverage Shopper Insights: Retail networks’ data offers insights on consumers’ purchase behaviors. Brands can use these insights to deliver ads that resonate with viewers based on past interests or purchase trends.

• Integrate with Other Channels: To reinforce brand messaging, brands should integrate streaming ads into their broader campaigns. Cross-channel integration has shown to improve conversion rates by up to 20% .

Conclusion: Embracing the Retail Media Network Evolution in Streaming TV

Retail media networks are opnew world of streaming TV advertising that combines the power of digital targeting with the reach of traditional TV. Brands, especially those who’ve never ventured into TV before, now have a new, data-rich channel to explore. By selecting the right approach—whether it’s an in-house solution or a partnership model—and aligning streaming ads with their broader goals, brands can capitalize on this evolving landscape for improved targeting, engagement, and ultimately, ROI.

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