Industry Analyst Andrew Lipsman: 'Retail Media is the Future of All Media'

Retail media and purchase data is anything but a flash in the pan

Andrew Lipsman, independent consultant and former Emarketer principle analyst, knows exactly why retail media is so hot right now.  “I've encountered some moments where people have tried to put retail media in this box as if it's a flash in the pan, the next web three or metaverse, but it's so much bigger than that,” he says. “Retail media is the future of all media.” 

Lipsman sat down with Jeremy Bloom on the second episode of the podcast series “Why?!” to go deep on retail media and data. He packs a goldmine’s-worth of brilliant takes into this 12 minute episode. We break them all down for you here, so you don’t miss a beat. 

Retail media is a channel and a layer

Originally conceived of by Connor McKenna of LUMA partners, this means that retail media is a media channel just like social or CTV, currently capturing 20% of all ad dollars, but it’s also a data layer, which is arguably more powerful. The data layer can be used on any media channel to target and conduct closed-loop measurement using real purchase data. 

Transactions are the new cookies

Once cookies fully deprecate, transactions will be what powers targeting and measurement on the open web. Transactions, if collected in a privacy-safe manner, are persistent and remove a “hop” from the programmatic daisy chain. They are proof of an actual purchase, instead of just being an identifier that could potentially tie an exposure to a purchase. 

All retail media networks are search

Lipsman alludes to this point throughout the episode, but RMNs are built by design to capture conversions at the very bottom of the funnel. “Retail media is like Google on steroids,” he said. This is why the “data layer” part of the equation is important. Advertisers should be able to use retail data for top-of-the-funnel strategies in addition to the bottom. 

Retail data is better data

“Retail data is better data. It's the most powerful data. We have powered digital advertising to date on proxies and behavioral advertising,” said Lipsman. “But now we know what people are shopping for and buying. That's the best signal that you can have for targeting ads in the majority of cases.” 

Retailers are becoming media companies, and media companies are becoming retailers 

Retailers are spinning up RMNs and media arms within their own walls, opening up a source of revenue akin to an untapped oil well. Meanwhile, media companies and publishers are no longer able to rely on endemic ads as their primary source of revenue, so they’re testing novel ways of integrating with retailers, essentially becoming a main feeder into the marketing funnel. Lipsman gives the example of a partnership between CNET and Best Buy, where CNET is becoming more seamlessly integrated into the purchasing process, both in-store and online.

Incrementality is the Holy Grail 

Lipsman believes that ROAS is this era’s CTR — that is to say, it’s not a reliable proxy for true sales outcomes. “ROAS is the metric that really guides all ad spend. But ROAS is really just a sale that happens after an exposure, whether or not that exposure of an ad really caused that to happen,” he said. Search is a great example of how inevitable sales are captured by ROAS, since a consumer is often searching for a product with the intention of buying. Incrementality captures sales that were a direct result of an ad exposure and would not have otherwise happened. These numbers are likely to be much lower, but more accurate.  

Watch the full episode with Andrew Lipsman here.

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