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Retail Media Networks Are The Next Big Advertising Channel

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The fastest growing ad-supported digital media channel is Retail Media Networks (RMN’s). It’s a retail-owned digital platform that sells ad space to marketers. With RMNs advertisers gain access to a retailer’s first-party data such as purchases made at the point-of-sale that enhance a marketer’s targeting capabilities with personalized messaging. Another advantage is an advertiser can send a relevant message when a consumer is in a shopping mode instead of using other digital platforms and in a brand safe environment. Additionally, accessing first-party data from retailers is a suitable and privacy compliant replacement for cookies.

GroupM estimates globally retailers garnered $88 billion in ad revenue last year and will reach $101 billion this year. This represents 18% of all global digital advertising and 11% of all advertising. GroupM projects retail media advertising to grow by about 60% by 2027, exceeding the expected growth for all digital advertising.

Forrester projects strong ad revenue growth for RMN’s in the U.S. market with ad dollars doubling over the next four years. McKinsey is also forecasting robust growth, expecting ad spend to grow from approximately $45 billion to over $100 billion by 2026. Fueling the growth are advertisers, it was reported this year 74% of brands have a separate retail media budget, a threefold increase from 2021. McKinsey expects 80% of RMN ad spend will stem from incremental ad budget increases. eMarketer predicts RMNs will be the third big wave in digital advertising following search and social.

Rick Ducey, Managing Director, BIA Advisory Services, says, “Retail Media Networks have become a valuable resource in brands’ marketing mix. As retailers become their own media, selling available ad inventory in their digital platforms (websites, mobile apps, social media, etc.), is a no-brainer and a win-win for the retailer and the brands they carry to engage consumers in their purchase journey at the point of sale.”

Ducey adds, “This inventory is accessible programmatically. But what if…local media publishers also rep this ad inventory. Some large media companies have hundreds and hundreds of local sellers on the streets who could sell that premium inventory at higher rates than can be achieved in programmatic platforms.”

In its latest ad spend forecast Magna Global said large retailers have been developing advertising sales through keyword search or display ads on apps and websites as e-commerce revenue continues to flourish. Magna notes, retail media is being fueled primarily by consumer brands that are reallocating their “below-the-line”, trade-marketing in-store budgets toward digital retail networks. In addition, retail-owned media networks tend to be immune from the privacy-based limitations on data usage and targeting, since they are accessing their own first-party data.

Nikhil Lai, Senior Analyst, Performance Marketing at Forrester says, “Advertisers use of RMNs encompasses the entire purchase funnel from awareness to point of purchase. Essentially, retail media holds the entire funnel accountable to delivering a verifiable revenue impact. In addition, the results of retail media campaigns can inform brands’ pricing, product, packaging, and distribution strategies.”

With retail media network’s ability to link impressions to direct purchases, a McKinsey report found 70% of marketers had enhanced returns from advertising on retail media networks compared to other media. As a result, the estimated cost-per-thousand CPMs to advertise on a retail media network are costly in the range of $20 to $50 making it comparable in pricing to connected TV.

While RMN’s have been around for several years, its usage quickened during the pandemic when stay-at-home consumers relied heavily on ecommerce. Last year the ad revenue for Amazon
AMZN
Advertising, the largest RMN, totaled $31 billion, a year-over-year increase of 48%. With double-digit growth expected again this year, Amazon could reach $40 billion in 2022.

The revenue success Amazon has experienced has prompted other retailers to ramp up their retail network capabilities which involves building the infrastructure and hiring talent. Walmart
WMT
, Target
TGT
and Kroger
KR
have been actively collecting shopper data and improving their advertising capabilities.

There are however, many other prominent retailers that have launched an RMN recently with more expected. For example, CVS launched the CVS Media Exchange and competitor Walgreens
WBA
started the Walgreen Advertising Group. Also, Dollar General
DG
, Ulta Beauty, Petco, eBay. Lowe’s, The Home Depot, Marriott, Dick’s Sporting Goods, Macy’s, Best Buy
BBY
, Michael’s, Nordstrom, Kroger and Albertson’s (that have announced plans to merge).

According to Forrester’s fourth quarter 2022 “CMO Pulse Survey”, 45% of advertisers say that their biggest challenge with retail media is that they have “too many RMN’s to manage,” 40% say their biggest challenge is difficulty comparing performance across RMNs.

Forrester’s Nikhil Lai says, “Advertisers should prioritize a few networks, rather than spreading their budgets too thin across dozens of RMNs. To solve the challenge, advertisers should work with solution providers, like Skai, Pacvue, MikMak, and CommerceIQ, who provide visibility across RMNs.” Forrester reports one-quarter of retailers with an RMN are making over $100 million in annual ad revenue.

eMarketer estimates in 2022 Amazon will have a 76.9% share of retail digital media ad spend. By comparison, Walmart is the second largest at 6.1%, followed by Instacart at 1.9%. The gap between Amazon and rival retailers have been slowly narrowing. For example, in 2021 Walmart’s RMN Walmart Connect generated $2.1 billion ad revenue, a 136% increase from 2021. Target’s RMN rebranded as Roundel reached $1 billion in ad spend last year. This year Instacart is expected to surpass $1 billion for the first time.

Forrester reports on average the margins for RMNs range from 50-70% and even more with on-site advertising at 70%-80%, notably higher than other ad-supported media. Forrester’s, Nikhil Lai, notes, “Advertising’s high-margin income offsets losses in other parts of retailers’ businesses, such as first-party product sales, third-party seller fees, physical store sales, and subscription services.”

Financially, the future of RMNs is promising. Nikhil Lin expects growth will come from such data poor product categories as CPG and consumer electronic brands. Both verticals want to influence shoppers at the point-of-sale and are driving the adoption of retail media today and for the foreseeable future.

The growth of RMNs come at a time when despite inflation and other concerns about the economy, ecommerce has been setting records. Adobe Analytics reports this year Black Friday generated a record $9.12 billion in sales, a 2.3% increase surpassing $9 billion for the first time. Online sales for Cyber Monday also set a record totaling $11.3 billion for the day, +5.8% from 2021.

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What to stream this weekend: ‘Civil War,’ Snow Patrol, ‘How to Die Alone,’ ‘Tulsa King’ and ‘Uglies’

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Hallmark launching a streaming service with two new original series, and Bill Skarsgård out for revenge in “Boy Kills World” are some of the new television, films, music and games headed to a device near you.

Also among the streaming offerings worth your time as selected by The Associated Press’ entertainment journalists: Alex Garland’s “Civil War” starring Kirsten Dunst, Natasha Rothwell’s heartfelt comedy for Hulu called “How to Die Alone” and Sylvester Stallone’s second season of “Tulsa King” debuts.

NEW MOVIES TO STREAM SEPT. 9-15

Alex Garland’s “Civil War” is finally making its debut on MAX on Friday. The film stars Kirsten Dunst as a veteran photojournalist covering a violent war that’s divided America; She reluctantly allows an aspiring photographer, played by Cailee Spaeny, to tag along as she, an editor (Stephen McKinley Henderson) and a reporter (Wagner Moura) make the dangerous journey to Washington, D.C., to interview the president (Nick Offerman), a blustery, rising despot who has given himself a third term, taken to attacking his citizens and shut himself off from the press. In my review, I called it a bellowing and haunting experience; Smart and thought-provoking with great performances. It’s well worth a watch.

— Joey King stars in Netflix’s adaptation of Scott Westerfeld’s “Uglies,” about a future society in which everyone is required to have beautifying cosmetic surgery at age 16. Streaming on Friday, McG directed the film, in which King’s character inadvertently finds herself in the midst of an uprising against the status quo. “Outer Banks” star Chase Stokes plays King’s best friend.

— Bill Skarsgård is out for revenge against the woman (Famke Janssen) who killed his family in “Boy Kills World,” coming to Hulu on Friday. Moritz Mohr directed the ultra-violent film, of which Variety critic Owen Gleiberman wrote: “It’s a depraved vision, yet I got caught up in its kick-ass revenge-horror pizzazz, its disreputable commitment to what it was doing.”

AP Film Writer Lindsey Bahr

NEW MUSIC TO STREAM SEPT. 9-15

— The year was 2006. Snow Patrol, the Northern Irish-Scottish alternative rock band, released an album, “Eyes Open,” producing the biggest hit of their career: “Chasing Cars.” A lot has happened in the time since — three, soon to be four quality full-length albums, to be exact. On Friday, the band will release “The Forest Is the Path,” their first new album in seven years. Anthemic pop-rock is the name of the game across songs of love and loss, like “All,”“The Beginning” and “This Is the Sound Of Your Voice.”

— For fans of raucous guitar music, Jordan Peele’s 2022 sci-fi thriller, “NOPE,” provided a surprising, if tiny, thrill. One of the leads, Emerald “Em” Haywood portrayed by Keke Palmer, rocks a Jesus Lizard shirt. (Also featured through the film: Rage Against the Machine, Wipers, Mr Bungle, Butthole Surfers and Earth band shirts.) The Austin noise rock band are a less than obvious pick, having been signed to the legendary Touch and Go Records and having stopped releasing new albums in 1998. That changes on Friday the 13th, when “Rack” arrives. And for those curious: The Jesus Lizard’s intensity never went away.

AP Music Writer Maria Sherman

NEW SHOWS TO STREAM SEPT. 9-15

— Hallmark launched a streaming service called Hallmark+ on Tuesday with two new original series, the scripted drama “The Chicken Sisters” and unscripted series “Celebrations with Lacey Chabert.” If you’re a Hallmark holiday movies fan, you know Chabert. She’s starred in more than 30 of their films and many are holiday themed. Off camera, Chabert has a passion for throwing parties and entertaining. In “Celebrations,” deserving people are surprised with a bash in their honor — planned with Chabert’s help. “The Chicken Sisters” stars Schuyler Fisk, Wendie Malick and Lea Thompson in a show about employees at rival chicken restaurants in a small town. The eight-episode series is based on a novel of the same name.

Natasha Rothwell of “Insecure” and “The White Lotus” fame created and stars in a new heartfelt comedy for Hulu called “How to Die Alone.” She plays Mel, a broke, go-along-to-get-along, single, airport employee who, after a near-death experience, makes the conscious decision to take risks and pursue her dreams. Rothwell has been working on the series for the past eight years and described it to The AP as “the most vulnerable piece of art I’ve ever put into the world.” Like Mel, Rothwell had to learn to bet on herself to make the show she wanted to make. “In the Venn diagram of me and Mel, there’s significant overlap,” said Rothwell. It premieres Friday on Hulu.

— Shailene Woodley, DeWanda Wise and Betty Gilpin star in a new drama for Starz called “Three Women,” about entrepreneur Sloane, homemaker Lina and student Maggie who are each stepping into their power and making life-changing decisions. They’re interviewed by a writer named Gia (Woodley.) The series is based on a 2019 best-selling book of the same name by Lisa Taddeo. “Three Women” premieres Friday on Starz.

— Sylvester Stallone’s second season of “Tulsa King” debuts Sunday on Paramount+. Stallone plays Dwight Manfredi, a mafia boss who was recently released from prison after serving 25 years. He’s sent to Tulsa to set up a new crime syndicate. The series is created by Taylor Sheridan of “Yellowstone” fame.

Alicia Rancilio

NEW VIDEO GAMES TO PLAY

— One thing about the title of Focus Entertainment’s Warhammer 40,000: Space Marine 2 — you know exactly what you’re in for. You are Demetrian Titus, a genetically enhanced brute sent into battle against the Tyranids, an insectoid species with an insatiable craving for human flesh. You have a rocket-powered suit of armor and an arsenal of ridiculous weapons like the “Chainsword,” the “Thunderhammer” and the “Melta Rifle,” so what could go wrong? Besides the squishy single-player mode, there are cooperative missions and six-vs.-six free-for-alls. You can suit up now on PlayStation 5, Xbox X/S or PC.

— Likewise, Wild Bastards isn’t exactly the kind of title that’s going to attract fans of, say, Animal Crossing. It’s another sci-fi shooter, but the protagonists are a gang of 13 varmints — aliens and androids included — who are on the run from the law. Each outlaw has a distinctive set of weapons and special powers: Sarge, for example, is a robot with horse genes, while Billy the Squid is … well, you get the idea. Australian studio Blue Manchu developed the 2019 cult hit Void Bastards, and this Wild-West-in-space spinoff has the same snarky humor and vibrant, neon-drenched cartoon look. Saddle up on PlayStation 5, Xbox X/S, Nintendo Switch or PC.

Lou Kesten

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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