By Marty Swant

As retail media networks grow their market share among advertisers, new privacy regulations are creating both new opportunities and new risks.

Part of the broader world of commerce media, retail media networks sit alongside e-commerce while also competing with e-commerce channels for advertisers’ dollars. But when it comes to data privacy, the industry at large faces various levels of risk: cookies, pixels and trackers on businesses’ websites could inadvertently expose shoppers’ data, according to a study by Lokker, a privacy tech company, that analyzed 100 top e-commerce websites in the U.S.

Some retailers have operated their own retail media networks for years. However, more have recently created, overhauled and expanded their own data-driven sales platforms to attract new advertisers looking to reach shoppers — partially thanks to marketers’ increased appetites for first-party data to replace third-party cookies amid more stringent privacy standards. But even if the raft of regulations coming online in the U.S. further fuels the retail media boom, some experts say it leaves agencies to navigate further fragmentation and new legal gray areas.

Since California passed new privacy protections in the wake of the 2018 Cambridge Analytica scandal, a growing number of other states have recently followed suit with their own versions as Congress continues to explore federal legislation. In addition to the Golden State, other laws will take effect this year in Colorado, Connecticut, Virginia and Utah, followed by Iowa in 2025. Laws in Montana, Oklahoma, Indiana and New Hampshire have also each been signed and another dozen states have statutes or bills in progress. As state laws go into effect and consumers become more aware of how ad-tracking works, marketers and consumer advocates are closely tracking opt-in and opt-out rates of various data-sharing methods.

With the promise of offering more first- and second-party data and millions of intent-based shoppers, companies have built a host of new capabilities through in-house tools and new partnerships with social networks and ad-tech companies. For example, Dollar General announced a new partnership with Meta in March to help reach customers living in rural areas.

At Dollar General, growth is “exceeding our expectations,” said Chad Fox, the discount chain’s chief marketing officer. Rather than being just a retail media network, he said Dollar General’s strategy is focused on also being an audience provider, with between 10% and 20% of its media network being on-site while the rest is off-site, according to Fox. Since launching its platform in early 2022, Dollar General’s media network has expanded from 21 advertisers to 51 partners now, with plans to onboard another 100 advertisers by next year.

Even though retail media growth was driven largely by the deprecation of third-party cookies, some experts say the sector still lacks guardrails in ways similar to other parts of the digital advertising ecosystem. The fragmented landscape of privacy policies in different states and across various platforms also has some wondering if quality retail media data can be both scalable and durable.

There are also questions about how state privacy laws and …read more

Source:: Digiday

Author: Aaron