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The Future OfRetail Media& Marketplaces: 6 Predictions For 2023

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The pace of change in the retail marketplaces and retail media world seems to be increasing. It seemed that a new retail media network launched every other week in 2022. We also saw retail business models starting to fracture, and the eventual easing and overcorrection of inventory shortages that first cropped up in 2021.

Besides more new retail media networks, what will 2023 bring to brands selling and advertising on retail marketplaces like Amazon, Walmart.com and Instacart? Here are my top six predictions as a retail marketplace practitioner.

1. The emergence of “Return-On-Content” as a performance metric

The quality bar for product and brand content and performance creative has jumped significantly. Shoppers are seeing more immersive, striking, and detailed brand content online, and they are starting to expect it from all brands.

Combine this expectation with what I’ll call the democratization of premium content. In 2022, Amazon made Premium A+ product content free for all brands, a benefit that previously came with a price tag in the 8-figure range. Instacart also launched brand store pages and the ability for brands to update product content – a big shift in the ability for brands to control and optimize their positioning.

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Many brands are in “retail content debt” and have a lot to catch up on. They have ignored the investment required, and have a lot of ground to make up. 2023 will be the year where they will make good in this area.

But the challenge is in securing budget for content. To date, there’s no ROAS-equivalent metric that digital teams can use to justify an investment in content. In 2023, we will see brands adopt metrics like Return On Content in order to legitimize investment that is often viewed as “squishy”.

 

2. AI will elevate, but bifurcate, content quality

AI writing tools will make it much faster and more affordable for many brands to bridge their aforementioned product and brand content gaps. But widespread adoption of AI will create an ocean of same-same content and undifferentiated positioning.

Brands that invest in human-led, innovative content can stand out from the pack. There will be a premium on creativity that not all brands will spring for.

Consider Cheetos who launched a beautiful, custom campaign on Amazon for a niche, limited-edition “drop” style product called the Cheetos Duster. It was a PR gimmick, to be sure, but the execution was extraordinary. Creating memorable brand moments like these require a level of creative thinking that AI just cannot produce… yet.

 

3. Amazon’s ad revenue growth will be driven by non-endemic brands

Amazon’s overtures toward brands that don’t sell physical goods on the marketplace (car manufacturers, insurance companies, restaurants) will start to pay off. I have written about this topic previously for Forbes, Amazon Sets Its Sights On An Even Bigger Prize: The Non-Endemic Advertiser.

These brands face rising customer acquisition costs through other channels, and Amazon’s ad inventory, audience targeting, and measurement capabilities are robust. More non-endemic brands will wake up to this opportunity in 2023.

Meanwhile, Amazon has already made significant inroads into its core base of endemic brand advertisers, and there is less upside in this advertiser group than the existing pool of endemic brand advertisers.

4. Walmart advertising will grow its share of the retail media pie

Walmart has been investing heavily in its advertising offering. In 2022, Walmart made changes like adjusting its advertising auction format and offering a free tier of analytics. In response brands are indicating more interest in Walmart as both a sales and marketing channel.

eMarketer’s latest forecast puts Amazon’s share of retail media ad spend at 77%, compared with Walmart’s 6.2%. The size of the overall retail media pie will grow, but 2023 will see Walmart increase their share of the pie.

This will simply be due to the law of large numbers. In Q2 2022, WM said that its ads business grew 30% year-over-year. By comparison, Amazon ad revenue in Q2 was up 18% year-over-year.

5. Bankruptcy of one or more large Amazon aggregator

We have moved past the heady days of the Amazon aggregator business model, circa 2020. The basic idea was a private equity model for Amazon-based companies. But we have still not seen any of these brands get close to their aspiration of “the next Unilever or Proctor & Gamble” in terms of gaining household brand recognition.

At the same time, DTC brands are embracing Amazon, such as Peloton. These brands are moving onto Amazon and other wholesale channels for lower distribution cost. Some of these DTC brands have had great success in breaking through to the mainstream consciousness.

New competition from these proven brands creates yet another headwind for aggregator brands – in addition to the higher cost of debt and major supply chain disruptions.

2022 saw some precedents in the form of Amazon resellers facing financial woes. Packable, the parent company of Amazon reseller Pharmapacks, closed its doors in 2022. Spreetail, which also operates a reseller business model, made large cuts to its workforce. The business model is slightly different to having a portfolio of owned brands, but the turmoil hints at inherent challenges with an Amazon-first distribution model.

6. Retailers start sharing anonymized shopper data

According to Insider Intelligence’s Retail Media Perceptions Benchmark report published in 2022, the three biggest factors driving adoption of RMNs (retail media networks) by advertisers are:

  1. Traffic scale (reaching a large enough audience)
  2. Traffic quality (reaching the right audience)
  3. Audience targeting capabilities (audience attributes/segmentation)

A limited audience size is the achilles heel for many retailers who want to attract profitable advertising revenue. The time cost of managing a very small media channel is close to a large one, so only the largest enterprise brands are candidates for smaller retail media networks.

The obvious solution to scale here is for retailers to partner with each other in sharing anonymized first-party data in a secure data lake. This larger pool of shopper data and advertising inventory will attract a much larger group of advertisers, and potentially the non-endemics that Amazon is wooing now, too.

Today, we are able to do something similar with Amazon’s DSP (demand side platform) and Amazon Marketing Cloud by uploading first-party DTC shopper data. Shopper profiles are anonymous, but able to be matched. This allows a brand to create advertising white- or black-lists, perform audience overlap analysis, and see the lifetime value of a customer who’s researching and transacting across both sales channels, and more. Having multiple retailers partner up will create great opportunities both for the retailers and for advertisers.

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CTV National News: Social media giants sued – CTV News

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CTV National News: Social media giants sued  CTV News

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India’s media – captured and censored

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Across almost every form of media in India – social, broadcast and print – Narendra Modi and the BJP hold sway.

With India amid a national election campaign, its news media is in sharp focus. Until recently it was believed that the sheer diversity of outlets ensured a range of perspectives, but now, India’s mainstream media has largely been co-opted by the Bharatiya Janata Party and Prime Minister Narendra Modi. Just how did the media in India get to this point and what does it mean for the upcoming elections?

Featuring:

Ravish Kumar – Former Host, NDTV
Shashi Shekhar Vempati – Former CEO, Prasar Bharati
Pramod Raman – Chief Editor, MediaOne
Amy Kazmin – Former South Asia Bureau Chief, Financial Times
Meena Kotwal – Founder, The Mooknayak

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Social media lawsuit launched by Ontario school boards

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Premier Doug Ford says that lawsuits launched by four Ontario school boards against multiple social media platforms are “nonsense” and risk becoming a distraction to the work that really matters.

The school boards, including three in the Greater Toronto Area, have launched lawsuits seeking $4.5 billion in damages against Snapchat, TikTok, and Meta, the owner of both Facebook and Instagram, for creating products that they allege negligently interfere with student learning and have caused “widespread disruption to the education system.”

But at an unrelated news conference in Ottawa on Friday, Ford said that he “disagrees” with the legal action and worries it could take the focus away from “the core values of education.”

“Let’s focus on math, reading and writing. That is what we need to do, put all the resources into the kids,” he said. “What are they spending lawyers fees to go after these massive companies that have endless cash to fight this? Let’s focus on the kids, not this other nonsense that they are looking to fight in court.”

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Four separate but similar statements of claim were filed in Ontario’s Superior Court of JusticSocial media lawsuit launched by Ontario school boards pervasive problems such as distraction, social withdrawal, cyberbullying, a rapid escalation of aggression, and mental health challenges,” Colleen Russell-Rawlins, the director of education with the Toronto District School Board, said in a news release issued Thursday.

“It is imperative that we take steps to ensure the well-being of our youth. We are calling for measures to be implemented to mitigate these harms and prioritize the mental health and academic success of our future generation.”

The school boards are represented by Toronto-based law firm Neinstein LLP and the news release states that school boards “will not be responsible for any costs related to the lawsuit unless a successful outcome is reached.”

These lawsuits come as hundreds of school districts in the United States file similar suits.

“A strong education system is the foundation of our society and our community. Social media products and the changes in behaviour, judgement and attention that they cause pose a threat to that system and to the student population our schools serve,” Duncan Embury, the head of litigation at Neinstein LLP, said in the new release.

“We are proud to support our schools and students in this litigation with the goal of holding social media giants accountable and creating meaningful change.”

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