Retail Media Networks should align themselves with Mobile Gaming – MarTech Series | Region & Cash

Retail Media combines the exciting areas of retail (direct-to-consumer digital and physical in store), digital advertising and addressing target groups. eMarketer predicts that retail media networks will grow to over $52 billion in ad sales by 2023 in the US alone.1 These networks need to find the right platform to help build an incremental advertising business. Interestingly, when examining the opportunity and path to success for retailers, it seems to be a different approach: the growth platform for mobile game publishers.

Get to know the growth platform

Sometimes referred to as a growth loop or engine, the growth platform is a software-driven approach that in-app publishers often use to generate consistent value. The cyclical process has three core phases: monetization, optimization, and acquisition. In-app gaming has perfected these three phases and provides a blueprint for how retail media networks can thrive.

monetization

The name of the game is profitable diversification. App publishers have learned not to focus on a single revenue metric like CPM or the type of revenue they generate (advertising or consumer), but rather to find the right mix to increase a consumer’s lifetime value (LTV). . Such revenue may come from in-game ads or consumer spending, primarily through in-app purchases (e.g., coins, skins, level-ups). Gaming publishers thrive by continuously reviewing gaming experience data and implementing the right ad placements and formats.

For example, when players beat a few levels, a game like King’s Candy Crush will deliver strategically placed reward or interstitial ads. Furthermore, they will also consistently offer in-app purchases in their “Shop” section to allow players to obtain boosters and higher tiers.

Retail media networks can take a similar approach to gaming, choosing whether to advertise or generate more consumer revenue through digital or physical goods. Advertising can serve as an additional profit contributor as it delivers more sales at a higher gross margin compared to (res)selling consumer goods. Effective monetization means retailers effectively capitalize on their website and app visitors with optimization tools and unique demand.

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optimization

Optimization is arguably the most important element of the growth platform as it analyzes all monetization information to inform and better support future decisions. From Apple’s Identifier for Advertisers (IDFA) to third-party cookies, recent changes in privacy and addressability make gathering these insights more difficult and mission-critical.

Mobile gaming companies do an excellent job of investigating and enabling the closed-loop reports they access. While privacy changes have limited their visibility, particularly around identifying the exact person or the ad campaign that person came from, mobile game publishers can use all of this information to develop a clearer picture of their players.

Games like Scopely’s Walking Dead leverage a range of data sources via the API to aggregate and curate multiple analytics views. They look at multiple user cohorts to determine LTV over different time periods and examine their monetization and retention behaviors. This detailed analysis is crucial for a core genre game that has a long player lifecycle. So

Retail media networks can follow these examples and safely use the incredibly valuable customer sales data to inform future decisions. At PubMatic, we’ve seen campaigns leveraging these retail-driven optimizations achieve up to a 36% reduction in cost-per-acquisition (CPA) and 10% efficiency in eCPM.6 Retailers can also tailor all optimizations to their specific goals, going beyond mere pricing data and improving acquisition and business outcomes.

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acquisition

The final but critical part of the growth platform is the acquisition, which not only creates the flywheel effect, but has also been fundamentally disrupted due to the advertising industry’s recent privacy changes.

Mobile publishers, especially gaming publishers, are surgical when it comes to user acquisition. Before Apple’s App Tracking Transparency (ATT) implementation and IDFA restrictions, publishers used a variety of outlets, most notably Facebook and Google, to drive users to their games. Currently, only 40-50% of users choose to provide their IDFA for gaming. Gaming apps continue to invest heavily in acquisitions; however, they had to change their approach. As an analyst and author Eric Sufert notes that gaming publishers have moved from an intense focus on segmentation in their acquisition efforts to more customization of the app experience they control. They acquire bulk groups of users (often at lower prices than highly targeted segments) and can then group them together in ways like pre-privacy periods based on the type of game those players are playing.7

Retail media networks can model some of the approaches taken by mobile gaming publishers; However, they have options: allow their suppliers to conduct an acquisition that leverages the retailer’s data assets, or conduct the acquisition themselves. First, retailers can monetize their users on the open Internet by allowing vendors to do audience expansion deals with those users. Retailers can also choose to run their own acquisition campaigns like mobile gaming publishers, using a data-driven, targeted and strategic approach to drive their growth platform. Because this is all first-party retailer data, retail media networks (and their vendors making acquisitions) can circumvent the devaluation of third-party data that comes with all the privacy changes in the industry.

Take the next step

The opportunities in the retail media are and will continue to be significant. A strong growth platform allows retailers to accelerate their businesses exponentially, despite the uncertainty of targeting and measurement faced by the larger advertising industry. This all may seem daunting, especially when retailers need to focus on their current core business. An experienced, unbiased partner is a great resource for understanding the ecosystem and recommending technologies that can support business goals. It is important that these partners offer solutions that are retailer specific and designed specifically for them and can help provide verified and qualitative measurements. Finding the right partner can ease entry into a successful growth platform that will lead to success in both the short and long term.

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