Reshaping the retail media ecosystem with scale, simplicity, and innovation

Retail media is top of mind

Last month I attended Cannes Lions where the conversations around retail media with agencies and brands continue to grow, much like the industry growth itself. Projections show that this growth is poised to continue:

• Retail media represents 16% of global advertising spending¹
• Retail media is the fastest-growing advertising channel. Retail media ad revenues will grow by an average of +11% annually through 2028 to reach $216 billion²
• Non-retail commerce partners like Chase and United Airlines are making major investments in digital media marketplaces
• Generative AI is transforming retail and retail media, increasing efficiency, enhancing creativity, and evolving personalization

Evolution is required to take full advantage of the opportunities in retail media

While there is great opportunity ahead, retail media is also facing significant challenges. In my recent industry conversations with retailers and brands, several have referred to retail media as being in its ‘teenage years.’ The industry recognizes lots of promise, but maturity and evolution are needed to maximize the true potential of retail media.

These ‘growing pains’ challenges include:

• Platform complexity – New point solutions are emerging for retailers alongside a growing need for omnichannel solutions. Retailers would benefit from more simplicity in their options and the ability to activate omnichannel retail media programs.
• Fragmented buying challenges – With the proliferation of retail media walled gardens, buyers are paying a heavy operational tax as they navigate through various platforms, so are looking for more unified ways to access retailer supply.
• Marketplace inefficiency – Due to a lack of a cohesive approach and standardization, the advertising experience is often poor, and this may impact shoppers due to less relevant ads.

Our commitment to the future of retail media

The above challenges and the rapidly changing retail media market, while currently disruptive, also represents a tremendous opportunity. At Microsoft Advertising, we are committed to leading and adapting our retail media business to align with industry shifts and trends. We are leveraging our strengths and unique advantages to move the industry forward, connecting our demand into retail media supply at scale, tapping into our history and expertise driving world-class partnerships, and innovating with curation and generative AI.

A path towards growth through partnership

Through our evolved and expanded collaboration with Criteo, we intend to chart a new path forward for retail media, empowering the entire ecosystem with scale, simplicity, and innovation.

Advertisers and brands deserve simplicity and transparency in how they buy, with an ability to reach people with personalized advertising that they love. We are doing this via a planned integration between Criteo and the Microsoft Advertising Network for retail, which would offer scaled demand access to Criteo's retail media supply. Advertisers would be able to access a rich array of retailers with this integration through a single point of entry via Microsoft Advertising Platform, driving performance growth with scale.

Retailers deserve not only to monetize their inventory but to leverage a simplified omnichannel platform and program management. To achieve this, we plan to work with Criteo as our preferred partner to serve our retailer clients' onsite needs moving forward.

Continued innovation with curation and generative AI

Beyond our work with valued partners like Criteo, Microsoft continues to innovate our retail media offerings for advertisers.

Using Microsoft Curate, retailers can extend and monetize their onsite audience with curated deals that can be made available in any DSP. This makes it easier for advertisers to seamlessly buy offsite retail media in the same place as their other digital ad buys.

And to bring the latest advancements to the advertising ecosystem, we’re integrating Microsoft’s leading generative AI technologies into our advertising platforms. One of our recent innovations is our AI-powered Retail Media Creative Studio which makes it easier for advertisers to create and optimize campaigns at scale. We plan to make this available to Criteo clients in the future.

Together, with advertisers, retailers, and partners, like Criteo, we look forward to shaping the future of the retail media industry as we step into this next chapter.

To partner with Microsoft Retail Media, contact us.