Essential Retail Media Glossary: For Retailers, Brands, and Agencies
In recent years, the retail media industry has undergone rapid evolution, with daily introductions of new features, guidelines and metrics. It goes without saying that staying informed about the terminology and latest industry trends is crucial in this dynamic landscape in order to drive meaningful connections, make informed decisions and achieve your business objectives.
From global retail giants to local e-commerce marketplaces, and from brands to advertising agencies, our glossary covers the terminology that powers the retail media ecosystem. The glossary is structured around the key stakeholders involved within the industry and the primary features of the latest retail media offerings.
Retail Media Ecosystem
Agency — a media company that works on behalf of their customers to manage advertising processes, including planning, buying and optimization of campaigns.
Brand — a supplier or manufacturer that sells its products directly to a retailer or distributor rather than to end consumers.
Endemic Brands — suppliers and manufacturers that sell their products with a retailer with whom they advertise. E.g. A utensil manufacturer that actively sells and advertises their products on Walmart.
Non-endemic Brands — suppliers and manufacturers that do not sell their products through retailers with whom they advertise. E.g. insurance, travel and financial service agencies advertising their solutions through a grocery retailer.
Retail Media Networks — a closed-loop digital advertising ecosystem where retailers offer ad spaces on their online and offline platforms to brands and sellers, allowing them to target shoppers directly within the shopping journey.
Commerce Media — a term that is used to describe non-retail companies creating media offerings similar to retail media. One of the examples involves the prominent US bank JP Morgan establishing its own media network.
Omnichannel retail media — a strategic approach to advertising that retailers employ to reach shoppers at their different stages of journey, from initial awareness to sales, using multiple advertising channels.
Self-serve retail media services — advertising approach that gives total control to advertisers, allowing them to manage their campaigns without involving a retailer.
Managed retail media services — retail media method whereby retailers manage advertising campaigns on behalf of their brands.
Demand Side Retail Media — involves advertisers buying ad placements from e-commerce marketplaces or retailers to target specific audiences.
Supply Side Retail Media — involves e-commerce marketplaces and retailers selling their ad placements to advertisers, allowing them to reach shoppers within their platform.
Ad Server — a tech platform that manages and delivers digital ads to websites or apps, enabling the display of ads to shoppers.
Ad Exchange — an online marketplace where advertisers and publishers can buy and sell digital ad inventory through real-time auctions or direct sales.
Ad inventory — available space within a website or app where advertisements can be placed.
Walled gardens — digital platforms owned by big tech companies that control the access to their content and data.
International advertising Bureau (IAB) — a global organization that sets standards and guidelines for digital advertising, including retail media.
Advertising formats
Native ads — advertising that seamlessly blends with the content of a website or a platform, providing interruption-free user experience for shoppers.
Digital Onsite — the placement of retail media advertisements on retailers’ eCommerce sites, apps and platforms. Onsite advertising includes Sponsored Product Ads, Sponsored Brands, Cross-sell and Upsell Ads.
Off-site Programmatic — the placement of retail media advertisements outside of retailers’ shopping websites such as social media, connected TV and digital-out-of-home.
In-store retail media — a retail media advertisement placed within physical stores of a retailer such as digital signage, self-checkout ads, endcap screens and more.
Connected TV (CTV) — retail media CTV ads. Compared to traditional tv ads, retail media offers brands and retailers target upper-funnel branding and lower-funnel performance marketing activities.One of the examples of retail media CTV is Amazon’s use of ads in its Prime Video.
Reporting
Closed-loop reporting — considered as the main benefit of retail media networks, closed-loop measurement provides reporting and analysis of the whole customer experience, from the very first ad exposure to the final purchase.
Incrementality — a process of measuring the true impact of advertising campaigns — determining whether advertising leads to increased product sales. Incrementality distinguishes between customers who buy because of advertising and those who would have bought anyway.
Viewability — a metric that measures ad impressions that have actually been seen by users. In other words, viewability measures what percentage of an ad was visible on shoppers’ screens for a certain amount of time.
Direct Sale Attribution — a conversion event where a customer purchases the specific product that they saw in the ad. This means that the customer sees an ad for a particular product and directly makes a purchase of that exact product.
Indirect Sale Attribution — a conversion event where a customer purchases a product from the seller or brand that was advertised, but it may not necessarily be the exact product shown in the ad. This means that the customer sees an ad for a certain brand or seller, and then makes a purchase from that brand or seller, but it may be a different product within their product range.
Post-click attribution — attributing a conversion action after a shopper viewed an ad.
Post-view attribution — attributing a conversion action after a shopper clicked an ad.
Click-through rate (CTR) — CTR reports how frequently shoppers end up clicking an ad after seeing it. CTR is derived by dividing the number of total clicks on the ad by its total impressions.
Conversion rate (CVR) — a percentage of completed desired outcomes such as add to basket or purchase. It is calculated by taking the total number of users who completed the desired actions after seeing an ad and dividing that by the number of shoppers who were exposed to that ad.
Return on Investment (ROI) — ROI measures the profitability of ad campaigns, comparing how much advertisers’ earned or lost against the initial ad spend. The simple ROI formula is = Revenue generated / Ad dollars spent.
Advertising Cost of Sales (ACoS) — ACOS reports how much advertising dollars it took to sell a product. The formula is = (Ad Spend / AdSales) * 100%.
Return on Ad Spend (ROAS) — ROAS measures the revenue generated from advertising compared to the cost of that advertising. The calculation of ROAS is = (Revenue from ads / Ad Spend) * 100%.
Targeting
Cookie-less targeting — a targeting technique that leverages retailers’ first-party data to display ads to relevant audiences, thus, complying with the strictest data privacy regulations such as GDPR in Europe and CCPA in the United States.
Purchase-based targeting — an advanced feature that enables advertisers to target shoppers based on their purchase history.
Keyword targeting — targeting shoppers based on search terms and phrases they enter on a retailer’s eCommerce website.
Behavioral targeting — delivering ads to users based on their online behavior such as website visits, search made or content read.
Contextual targeting — displaying ads to users based on the context of the content they are currently viewing.
Placement targeting — targeting users across different pages of an e-commerce platform, including home page, product listings, and category pages.
Demographic targeting — targeting shoppers based on demographic factors such as age, gender, income and more.
Geo targeting — targeting shoppers based on the geographical location such as zip code, store location and more.
Retargeting — a strategy that involves serving ads to shoppers that previously interacted with the advertiser but did not complete the desired action.
Data & Audience
First-party audience data — data collected from a retailer’s, marketplace’s or brand’s own customer base. The first-party data is collected over time through online interactions with websites, apps, social media or other channels.
In-market audience — users that are actively researching or considering a purchase of a given product.
Predictive audiences — targeting audiences created using advanced data analytics models that predict which shoppers are more likely to interact with a specific advertisement.
Addressable audience — audiences that can be targeted in real-time with relevant marketing messages across different channels.
Data clean rooms — a privacy secure environment where advertisers and publishers can collaborate on data sharing and analysis without compromising sensitive information.
Brand safety — a set of measures that ensure that advertisements are placed within contextual and appropriate spaces. It involves avoiding the placement of ads with content that is offensive or harmful for the reputation of a brand.
Bidding and Auction
Auto-bidding — automated bidding strategy where bidding decisions are made by advanced algorithms and artificial intelligence in real-time based on various factors such as ad relevance, budget and campaign goals.
Manual bidding — a bidding strategy where advertisers manually set bids for their ads. This strategy is often suitable for experienced advertisers, enabling them to have full control over the bidding process.
Budget Pacing — a process of distributing advertising budgets evenly over a campaign’s lifetime. Budget pacing ensures that the campaign performance is maximized without exhausting the campaign budget too quickly or slowly.
Bid Suggestion — a bidding feature provided by a retail media platform that recommends optimal bid amounts for ad placements based on historical data, competition, ad relevance and campaign goals.
Bid Multiplying — a process of adjusting bid amounts by applying a multiplier, allowing advertisers to adjust bids across multiple campaigns or ad placements.
First-Price Auction — auction strategy where the highest bidder wins and pays the amount they bid. In the context of retail media, advertisers that bid the maximum amount are able to place their ads, regardless of what other bidders offered.
Second-Price Auction — auction strategy where the highest bidders only pay the amount of the second-highest bid plus an increment. The second-price auction lowers the cost for advertisers, as they now do not have to pay the highest bid.
