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Retail media Retail media – advertising in online shops

Published on 08.01.2020 by Stephan Lamprecht, Journalist

Did you know that Amazon is one of the three largest advertising platforms in the USA? In Germany alone, the company generates advertising revenue of over EUR 500 million. The phenomenon is known as retail media and enables direct advertising at the digital POS.

In the past, when brand manufacturers and retailers wanted to advertise their products online, they mostly used ads in search engines, media offers and social networks. But Amazon has been continually shaking things up in recent years, and not just for retailers. Customers are increasingly starting their search for a product on the US corporation’s website, which is striking at the heart of Google’s business model.

And Amazon’s smart managers soon found a way to monetize this traffic, by using adverts, which it also sells to Google. This has given rise to a new type of advertising known as retail media.

A dynamically growing form of advertising

Retail media takes an advertising format from high street retail and transfers it to the online world. Brand manufacturers have been able to reserve better placements and promotions in supermarkets and department stores for decades by making advertising cost contributions. And this option is now available in an increasing number of online shops and marketplaces.

This form of advertising is particularly dynamic. Ad revenue for 2019 is expected to reach CHF 880 million in Germany. The media agency pilot concluded that retail media is not simply hype but is a “highly relevant discipline with dynamically growing relevance”.

The trend that’s also conquering Switzerland

The retail media craze continues to pick up speed in Switzerland too. Three marketing firms are bringing together prospective brand manufacturers and retailers with marketplaces and shops. The Cologne-based company Aimery operates in this segment with “Aimtail”, as do Converto and Retailme.

There are clear benefits for advertisers and platforms. First there’s increasing visibility in an extremely attractive environment. And second, there’s a considerably higher likelihood of purchases being made. Tarek Müller, the founder of AboutYou, believes that you “only need a small amount of advertising to gain considerably more revenue”.

Meanwhile for shop operators, retail media opens up additional options for monetizing traffic, provided they have a corresponding penetration rate.

A new type of advertising in a range of formats

With its wealth of ideas, this fledgling form of advertising is already available in a variety of formats. These include sponsored products, which you frequently see on Amazon and similar sites.

Some marketplaces can create a branded shop to bring together all products in a dedicated section. Video ads are now also possible. And premium formats are available, which are based on individual campaigns, such as those involving influencers. But of course, this doesn’t come free.

It’s certainly worthwhile for companies from Switzerland to look into developing retail media to help them benefit from the first-mover effect.

Stephan Lamprecht, journalist

Stephan Lamprecht has been following e-commerce developments in Germany, Austria and Switzerland for two decades as a journalist and consultant.

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