Growing numbers of U.S. shoppers head to the web to purchase consumer packaged goods (CPGs), a trend that clearly illustrates customers’ increasing desire for convenience. This online shopping trend has also led to a goldmine of data for CPG retailers about their customers’ needs, preferences and buying habits. By tapping into the right channels and strategies with their retail media advertising, CPG brands can capitalize on this data to spur growth and use ad spends more effectively.
In this article, we’ll cover the following topics while exploring how CPG brands can excel in retail media advertising:
- What Makes Retail Media Advertising a Smart Choice for CPG Brands
- The Best Retail Media Channels for CPG Ad Success
- 6 Strategies for CPG Brands to Excel in Retail Media Advertising
What Makes Retail Media Advertising a Smart Choice for CPG Brands
Retail media advertising refers to placing ads on retailer-owned platforms such as Amazon, Walmart Connect and Instacart. This growing media vehicle (which was forecast to claim 20% of U.S. ad spending in 2024) gives CPG brands an opportunity to target shoppers during their purchase journeys. By placing ads where consumers are actively shopping, brands can influence purchase decisions closer to the point of sale, increasing the likelihood of conversions. (And the power of retail media seems to be growing — surveys show that 85% of marketing agencies and brands say its ability to boost upper-funnel awareness is increasing.)
Another key advantage of retail media advertising is the access to rich first-party data it delivers. This data enables precise targeting based on shopper behavior, preferences and purchase history, helping brands deliver personalized ads that resonate with their audience.
While the retail media space is crowded with CPG advertisers, it’s not widely considered to be oversaturated. The high level of competition highlights the importance of standing out. Strategic targeting, creative messaging and leveraging retailer-specific tools can help brands differentiate themselves on retail media networks.
The Best Retail Media Channels for CPG Ad Success
Top retail media channels for CPG ad placement include Amazon Advertising, Walmart Connect, Target’s Roundel and Instacart Ads. Here’s a closer look at these leading choices and their unique strengths:
Amazon Advertising
As a pioneer in retail media, Amazon provides unrivaled reach (encompassing more than 275 million consumers in an average month), advanced targeting options and robust analytics. It’s a go-to choice for brands looking to scale campaigns and tap into wider audiences.
Walmart Connect
Walmart’s platform combines access to in-store and online shoppers with vast first-party data. This makes it ideal for brands aiming to reach value-conscious consumers at scale.
Target’s Roundel
Target integrates its rich shopper data to create highly personalized campaigns. Brands can leverage Roundel to engage loyal Target customers with precision.
Instacart Ads
Focused on grocery shoppers, Instacart is a good choice for promoting household staples and driving impulse purchases via highly relevant targeting.
Other Niche Platforms
Retailers like Kroger and CVS offer specialized media networks, such as Kroger Precision Marketing and CVS Media Exchange. These platforms cater to specific consumer bases, such as grocery or healthcare shoppers, providing opportunities for brands to effectively target niche audiences.
6 Strategies for CPG Brands To Excel in Retail Media Advertising
To thrive in retail media advertising, CPG brands need a combination of data-driven strategies, creative execution and informed campaign optimization. Consider tapping into these six effective tactics when executing your CPG brand’s next retail media campaign:
1. Choose Your Platforms Strategically
When selecting a platform, carefully consider your CPG brand’s goals and audience. For new product launches, a broad-reach platform like Amazon might be your ideal choice. Walmart, Target or a niche platform may be a better fit if you’re looking to connect with specific shopper demographics or drive in-store sales. Testing multiple platforms and analyzing performance data can help you refine your approach and maximize impact.
2. Invest in First-Party Data Integration
Combining your brand’s data with retailer insights enables precise targeting based on shopper behavior and preferences. This alignment can help you prioritize efficient ad placements that align with your target audience, plus deliver more relevant and impactful messaging with your campaigns.
3. Differentiate Through Creative
In a crowded marketplace, compelling creative is key. Use visuals and messaging that evoke an emotional response while highlighting your product’s unique value. Aligning your creative approach with the retailer’s brand identity can also enhance trust and make your ads more credible to shoppers.
4. Focus on Performance Metrics — and Optimize
Track key performance indicators like return on ad spend (ROAS), conversion rate and cost per acquisition (CPA). Also, evaluate your campaign’s performance with closed-loop measurement, which connects every step of the customer journey — ad exposure, clicks and sales — to provide a direct link between your advertising efforts and actual purchases. As you gain more campaign insights, use audience segmentation to refine your targeting, and test creative variations to identify what drives the best results.
5. Allocate Ad Spend Wisely
Campaign budgeting decisions should be informed by factors like product category, profit margins and the expected return on investment from specific channels. Retail media ad spend for CPG brands typically accounts for 15% to 30% of a brand’s overall ad spend, depending on goals and market conditions, with a 2022 survey indicating an industry average of 18%.
6. Collaborate Closely With Retailers
Fostering strong partnerships with retailers can open doors to premium ad placements, co-branded promotions and greater access to valuable insights. By collaborating strategically and developing strong retailer relationships, you can amplify your CPG brand’s reach and deepen consumer connections.
Boost Your CPG Marketing Efforts with Brandon
Could your brand use the help of an ad agency that specializes in retail media advertising for CPG? At Brandon, our team of data-driven marketing professionals has leveraged retail media for numerous CPG brands to put their products in more consumers’ carts. To learn how we can help your CPG brand boost the performance of its marketing campaigns, contact us today.
Cary Murphy
Chief Strategy Officer
Cary Murphy is our Chief Strategy Officer at Brandon. He has been in marketing for over 30 years, starting his own agency from scratch and growing it into a market leader. He sold his agency to Brandon in 2016 and joined their leadership team, bringing his expertise to a wider audience. He’s also our category leader for B2B and CPG, working with clients such as Nucor Steel, Wastequip, Green Giant, Idahoan Foods, and Victory Beer. He helps clients create brand stories and strategies that increase sales, boost customer loyalty, and generate media coverage. He doesn’t settle for the status quo or conventional wisdom. He finds hidden connections and patterns and turns them into compelling narratives that resonate with customers. Cary is a smart and inspiring leader who challenges and supports his peers to do their best work. He believes that discipline is more important than motivation, and that good habits are more powerful than goals. Cary is a leader who combines talent, experience, and passion, with something else. A skill that he learned and honed over decades of practice and experimentation. A skill that helps him uncover the remarkable in both people and products.