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Retail media is in ‘uncharted territory,’ says Microsoft head

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Mon, Mar 25, 2024 07:01 PM

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Plus: Retail?s sell side share of digital approaches buy side share MARCH 25, 2024 “What?

Plus: Retail’s sell side share of digital approaches buy side share MARCH 25, 2024 [Retail media is in ‘uncharted territory,’ says Microsoft head]( “What’s really exciting about [retail media]( is a lot of it is uncharted territory,” said Paul Longo, general manager of retail media at Microsoft. “We’re in inning two, inning three. What’s gotten us here will not get us where things need to be.” Innovations in generative AI, breaking down marketing silos, and building out media in-stores will bring marketers and retailers to that place, he said. Generative AI is not replacing creative teams, said Longo. But it is minimizing the lift of production. “If you’re a small brand, and maybe you don't have an agency, you can have the Creative Studio [Microsoft's retail media creative solution] just scrape your product page, pull an image in, design an ad based on your style guide, and then auto-tune and optimize.” That’s good news for what Longo called “torso and tail brands,” those mid- to small-sized brands that may not have a large marketing budget but can still benefit from retail media advertising. Smaller brands are slower than big ones to advertise with new [retail media networks]( (RMNs), said Longo. AI tools that can build creative quickly and with little cost can also unlock ad spend from these brands. Story continues below. Retail media ad spend also gets held up by siloed budgets, said Longo. Shopper marketing and brand marketing teams for the same product may be completely separate, even though they may be buying ads with the same RMN. A unified head of retail media ad spend can help these brands work more “fluidly and nimbly” across channels, he said. Microsoft is focused on in-store retail media. Investing in tech that already exists in-store, rather than futuristic digitizations that shoppers and retailers are slower to adopt, can help advertisers activate and scale in-store retail media right now. Our analyst Sarah Marzano had a similar opinion, saying [in-store retail media should]( not “feel disruptive. “You don’t want something that’s effectively acting like a pop-up ad interrupting your in-store shopping experience,” she said. [Read online]( [Retail’s share of the sell side of digital advertising is approaching its share of the buy side]( [Retail’s share of the sell side of digital advertising is approaching its share of the buy side]( Key stat: Retail will account for over a quarter (28.7%) of all US digital ad spending in 2024. By 2027, it will also account for over a quarter of the sell-side market through [retail media networks](. Beyond the chart: - US retail media ad spend will reach $59.61 billion this year, according to our October 2023 forecast. - 18.5% of retail media network ad spend is coming from off-site advertising, and that share is growing, per our forecast. - With [retail media]( gaining so much of the digital ad landscape, it’s no surprise ad giants like [Google]( and [Microsoft]( are building out their own retail media tools. [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](

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