New Digital Shelf Institute Study Reveals the Full Revenue Impact of Media Retail Investment for Brands
Written by: Jason Fidler
“The Full Revenue Impact of Retailer Ad Platforms” provides brand manufacturers with new ways to more fully calculate return on retail advertising initiatives
BOSTON, MA, December 17, 2020- The Digital Shelf Institute, the commerce community for manufacturers, today announced the release of a new study, “The Full Revenue Impact of Retailer Ad Platforms.” Generated through insights and anonymized data from dozens of ecommerce and digital leaders at large brands, the research was built around a common question, “What is the total value of my retail media spend?” and offers a new framework for calculating how retail advertising investments positively impact sales, retention, partner activity, and other areas of the digital shelf.
With mounting pressure on the performance of the digital shelf, retailer ad spend is increasing. However, retailer ad investment often sits between marketing and sales organizations, making the total business value hard to calculate in cross-functional terms.
“Many digital leaders at large brands understand intuitively that retail advertising ROI far transcends just direct online sales, but they typically do not have the internal infrastructure or political support to prove it,” said Molly Schonthal, founder of The Digital Shelf Institute Executive Forum, a community of digital shelf executives at leading brands. “Our members each individually had one or two anecdotal pieces of evidence, but no one had taken the time and care to piece them all together. This is what sets our report apart.”
“Through the cross-industry and thought-leading work of the Digital Shelf Institute, this report is a first of its kind opportunity to understand the full revenue impact of retailer ad platforms,” said Chris Parsons, president and general manager, USA of Mayborn Group. “It synthesizes the collective knowledge and real results of many in the CPG industry so that we can all benefit in showcasing a more rounded view on ROI from our media spend.”
The study, co-authored by Schonthal and Chris Perry, digital commerce consultant and former VP and advisor at ecommerce provider Edge by Ascential, provides for the first time a useable, logical, and data-backed framework leaders can follow to further justify the full business impact of their investment retailer ad spend, a growing area of investment for many brands. The Digital Shelf Institute has also created a supplemental media spend impact calculator based on the framework.
Direct influences of retailer ad spend on revenue include:
Online Sales Growth: Running targeted retail media and product search campaigns on a retailers’ site will generate a return on ad spend (ROAS) in direct sales. For example, the average ROAS in direct sales on Amazon for product search campaigns is $3.00 to $7.00 for every dollar spent.
Offline Sales Growth: Both brands and retailers have measured up to a range of $7 to $11 spent in-store for every dollar spent online generated by retail media campaigns.
The report documents additional dimensions of retail media investment returns, including improvements in overall media value, partner relationship value, offline product placement, repeat rate, social validation and digital visibility, as well as a boost in cost per acquisition efficiency.
“Big brands generally find themselves in a Catch-22 that prevents them from appropriately investing in retail media,” said Perry. “They haven’t had great visibility into retail media impact on their business and brands, because brand marketing teams and agencies have not historically been incented to invest sufficiently in retail media to generate a measurable impact. This report will help digital and ecommerce leaders make a forceful case for more substantial investment in retailer ad platforms, given that spend's appreciable impact across other channels.”
To download “The Full Revenue Impact of Retailer Ad Platforms” and ad retail spend calculator, and to register for a January 5 webinar hosted by Schonthal and Perry which will provide more insights into the report findings, visit https://www.digitalshelfinstitute.org/retaileradspend.
About The Digital Shelf Institute
The Digital Shelf Institute is the commerce community for manufacturers. In the digital age, manufacturers have more opportunities to control their commerce destiny than ever before.
The Digital Shelf Institute brings together an ecosystem of experience to share ideas, outcomes and the strategies in the form of virtual content, podcasts, reports, and articles that will drive revenue in the years ahead.
The Digital Shelf Institute also hosts the Digital Shelf Executive Forum, an invitation-only community platform for digital shelf executives of leading brands.