Footwear brand Clarks has achieved significant marketing success through retail media networks, as former go-to marketing channels have become less reliable.
Media retail networks are fast becoming a popular way for brands to gather first-party data on their customers, as companies like Google limit cookies that use code to track what users are doing across multiple sites.
“The simplest way to think about it is: sponsored products on an e-commerce site,” said Andrew Lipsman, principal retail and e-commerce analyst at intelligence company Insider Intelligence. Reportedly, the end of cookies on Google is coming in the third quarter of 2024. Retail media advertising spending will reach $160 billion in the U.S. by 2027, according to a 2022 report by media investment company Group M.
Clarks, a footwear company with a nearly-200-year history, has been investing in multiple retail media networks since 2020. “We invest a portion of our marketing budget in the media networks of some of our top accounts, including Amazon, Macy’s, Nordstrom and The Bay [owned by Hudson’s Bay Company],” said Adriana Talatinian, vp of marketing for the Americas at Clarks.
Companies like Nordstrom run extensive retail media networks. Nordstrom’s onsite channels include sponsored product ads, display placements like banner ads and dedicated brand pages. Its offsite channels include paid social across a variety of platforms, including Meta, Pinterest, Tiktok and YouTube, plus search and shopping ads through Google, and a variety of influencer options.
According to a Nordstrom spokesperson, the Nordstrom retail media network grew over 50% in 2022 versus 2021. “In the fourth quarter, we expanded our advertising offering to brands and categories adjacent to Nordstrom, launched offsite partnerships with TikTok and Pinterest, and scaled on-site advertising with display ads on Nordstrom.com,” they said in the earnings for Q4 2022. “Our brand partners value the opportunity to connect with our highly engaged and loyal customers with a strong return on ad spend, particularly as advertisers look to diversify their media mix.”
Clarks’ investment in retail media networks comes with specific data benefits. “This allows us to use their first-party data to target both new and repeat consumers,” Talatinian said. “It’s been an effective way to use a portion of our wholesale budget to ensure we’re top of mind among our competitive set and have a marketing presence at the key retailers where our consumers are already shopping.”
Along with access to first-party data on shoppers, Clarks leverages media networks to sell exclusive items only available through that retailer. It shows up in immersive ads that show up on the retailers’ existing website, as well as in displays and other marketing channels.
“The long-term opportunity with RMNs is about leveraging that retailer’s first-party data on people who are brand and category buyers. The [goal] is to target them with ads in other environments, namely off-site display, video and, increasingly, streaming TV,” said Lipsman. “The digitization of stores and in-store signage will also be part of this, as it can then be used by brands to promote themselves within the context of a multi-brand retailer environment, like Macy’s or Nordstrom.”
Talatinian said the data that media networks have provided Clarks is on par with that from other forms of digital marketing and, in fact, far stronger than more traditional cooperative marketing investments. “The consumers we are able to reach are high-intent purchasers, especially within the department store space where traditional marketing tactics aren’t as impactful,” she said. One of Clarks’ top-performing retail media network partners led to a 40% year-over-year increase in the brand’s own website traffic, said Talatinian. She declined to specify which retailer.
However, retail media networks are forcing new limitations. “Many branded landing pages used to be free, but now come at a cost,” said Talatinian. “This raises the high entry barrier while also making the space much more competitive, from a brand perspective, with more players entering the market.” As time passes, Talatinian expects more retailers will convert their digital spaces into pay-to-play environments.