Our new analyst talks standardization, partnerships

Plus: How Uber, Lyft, and Instacart are building their ad businesses MARCH 18, 2024 [In-store retail media, standardization, and partnerships are on our mind]( Nearly three-quarters (74.2%) of the $59.61 billion in US digital [retail media]( ad spend we forecast for 2024 will go to [Amazon](. That leaves $15.35 billion going to non-Amazon retailers and $370 million going to in-store formats.That should excite marketers, said EMARKETER’s new principal analyst Sarah Marzano. “It's very easy for the stories we tell about retail media to center around the giants who are a bit more mature in the space,” Marzano said. “But what I’m really excited about are trends and opportunities that are afforded to what I'll call the longer tail and the emerging next frontier of retail media,” which Marzano says also includes the store. Retailers should be thoughtful about those in-store formats. “You don't want something that's effectively acting like a pop-up ad and interrupting your in-store shopping experience,” Marzano said. Avoid obscuring products. Shoppers can’t easily abandon carts in stores as they can online, but they can grow frustrated and cut shopping trips short or decide not to return. Story continues below. Instead, think about how retail media can assist shoppers on their journeys. “Maybe it's facilitating product discovery, or offering knowledge that they would want about a product and that doesn't feel disruptive,” Marzano said. Flashy investments in things like digital screens and smart shopping carts are nice, Marzano said, but the digitization of the store can also come from being more intentional about areas that aren’t necessarily innovative or new, like store audio, self-checkout screens, TVs in electronics sections, screens at gas pumps, and sampling. The long tail of retail media may also foster standardization, Marzano said. “These brands are working with multiple [retail media networks]( and they need to be able to measure the efficacy across campaigns. And right now, that's not happening.” As smaller retailers grow motivated to work together, standardization could follow. Partnerships may also emerge between retailers with audience overlap but different products, like a footwear retailer and an electronics store. Collaborations will require standardization in measurement while also creating non-endemic advertising opportunities, Marzano said. Overall, the future of retail media is bright, with US omnichannel retail media ad spend projected to surpass $100 billion by 2027, per our October 2023 forecast. “It's really interesting to watch as retailers learn how to operate in a really different way fundamentally than what they've historically done,” Marzano said. [Read online]( [How Uber, Lyft, and Instacart are building their ad businesses]( The insight: Uber, Instacart, and Lyft are trying to strike a balance between growing their lucrative ad businesses and keeping users happy. - All three platforms are relying on personalization, engaging activations, and smaller ad loads to ensure maximum relevance and engagement. A targeted approach: As with other retail media networks, Uber, Lyft, and Instacart’s appeal to advertisers is rooted in their first-party data and ability to reach consumers at key moments in the customer journey. - Both Uber and Lyft are using trip data to tailor ads based on where users are going and what that behavior reveals about them. For example, Uber served ads for Lacoste tennis apparel to riders traveling to and from the US Open, the company [told]( The Wall Street Journal. - Instacart uses generative AI to predict what shoppers are cooking based on the items they add to their baskets, enabling it to make product recommendations, some of which may be sponsored. While its in-store advertising capabilities (via its smart Caper Carts) are still nascent, the company eventually expects to be able to offer shoppers real-time suggestions based on their location and what they add to their carts. - Fellow aggregator DoorDash’s advertising model—in which the company only gets paid if users make a purchase—is incentivizing its efforts to personalize ads based on individual purchasing habits in order to maximize conversions. [How Uber, Lyft, and Instacart are building their ad businesses]( [Keep reading]( Email sent to: {EMAIL} If you cannot view the HTML newsletter, [please read it in your browser here](. [Become a Premium Subscriber]( | [Advertise with us]( [Manage your email preferences]( | [Unsubscribe]( | [Terms of Use]( | [Privacy Policy]( ©2024 EMARKETER, One Liberty Plaza 9th Floor, New York, NY 10006 [LiveIntent Logo]( [AdChoices Logo](