Why Brands Shouldn’t Shift Ad Budgets to Display Too Quickly

The headlines in 2023 for retail media have so far been dominated by all the new bells and whistles of this relatively young advertising offering. These new baubles include (but are definitely not limited to) promises of measurement and incrementality, onsite and offsite display audience expansion options, and a sprinkling of CTV partnerships that promise to reach new shoppers and spur double-digit growth.

But, as someone who has her head under the hood of retail media and has been tinkering with it since its inception, if we’re all being honest here those hopes are still in development. In the meantime, search is measurable, consistent, widely understood and accepted. And every retail site has a version of it.

In this Wild West of a retail media rodeo, search is your trusty steed that plods along and doesn’t let you down. Let’s not then forget that, and let’s definitely not make extreme cuts to the search budget and transfer the monies into other investments, even if some of our partners might be encouraging us to do so.

Harvest existing demand 

Search is a powerful catalyst for brands. The shopper has transmitted a specific intent signal, whether in the research or demand phase of their customer journey. And while the quality and efficacy of each retailer’s organic search capabilities differ wildly, all have put effort into creating a flywheel effect when it comes to determining search results, be they organic or paid.

Amazon gives us the most obvious example of this. Its search results and product pages are permeated with sponsored products. Results pop up based on an algorithm that rewards sales velocity, seller metrics and reviews, and product ratings. In some cases, the result is even based on the likelihood that the product will result in a conversion. This last metric, sometimes called propensity, is particularly difficult for new brands or SKUs to achieve since they lack historical sales or review data. So they would need to make up for it by paying for visibility via sponsored products or other advertising.

All this said, the burning question in retail media remains the same as it does with Amazon, Google or any search engine results page (SERP). When it comes to branded searches of a product, should the brand simply appear? After all, that is precisely what the user queried. But just like on Amazon and Google, the branded terms still require defensive budgets to stave off competitors that would attempt to filch your name for their own advantage.

For example, if a shopper queries “Palmolive,” the brand’s products will likely appear in the SERP, but competitors like Dawn, Method or other challenger brands you might not have heard of will also show up. And as much as you’d like to believe that you’d land at the top of the fold for a search on retail media for your own brand name that you’ve trademarked and put millions of dollars behind, that’s not always the case.

The price of making that assumption can be costly in terms of lost market share and digital shelf space. So remember, all is fair and love and war … and search.

Keeping your search crown 

So where does that leave you today as you get bombarded with offers of programmatic and streaming on retail media? Always test, learn, iterate—of course. But don’t ignore the core. Instead, use those fundamentals to help you evaluate the new offerings that people are trying to sell you.

First, a retailer’s website basics must be rock solid. Organized categories must make sense, be user-friendly, contain multiple product images and detailed product pages, be mobile-friendly and be externally search-friendly. If you Google your product, does one of the retailer’s pages with your product come up? If you search for your product on the retailer’s site (brand name or non-brand name), what’s the experience like?

If you are having trouble converting a shopper already on a retail site that is explicitly searching for your brand, how much harder do you think it will be to convince the shopper to leave an external site to click on that banner ad to go to a retailer, begin their research anew and then convert?

Let’s say the retailer has terrible onsite search capability and you want to bring shoppers to your products offsite. You could try narrowing the targeting and layering on first-party retailer data. But again, once the shopper is past that first-click experience and tries to perform an onsite search or click on another product, they may end up leaving due to the poor experience before ever converting. Repeat this tactic and you might even be filling your own retargeting pool with incorrect shoppers that you’ll end up trying to reengage later to no avail. 

Do your housekeeping

We’re still living in a search-based world. Yes, we’re headed toward some really smart audience-based recommendations, not just previous purchase-based but far more sophisticated. These include basket-building and new-to-brand, which will help your brand move up the funnel and extend reach. As we move toward more consistently measurable, predictable and provable display, I recommend taking the following search-oriented housekeeping steps for your brand on retail media. 

Non-brand onsite search evaluation: If you haven’t walked the floor of the digital retailer for your own brand recently, you should. Observe if the ads that show up alongside the organic products are a match, or if there are mismatches that look out of place. 

Search your branded terms for relevancy and accuracy: Check on conquesting. Are there competitor brands bidding on your brand terms? While Amazon allows this, Walmart does not. Know the rules. There may also be personalized results based on your past shopping and search. So pull up an incognito window and note where the experience can be improved on SERP as well as individual product pages that are important to your brand. 

Budget: Last year, depending on the category, brand and retailer, a brand typically saw a budget split of 80% (search) versus 20% (display), with 2023 ad spend expected to shift even more toward display. My recommendation is to make that shift to more display tactics gradually, as these capabilities mature and come out of beta.

Mature partners: If the retailer has partnered with an established technology to run the display offering, research that company, too. The more mature that platform is, the more confident you can be in that offering. 

Search is still king. And will continue to be.

New stuff is fun. Audiences are fun. First-party data is the supposed backbone for these new offerings. But we have to continue servicing existing demand and recognizing the powerful role search continues to play on the path to conversion.

As retail media offerings mature, we will start to see more in-store connections and activations that are traceable to audiences, digital and physical, whether at a cohort or individual level. When that fully happens, I will gladly come back and revise this. But in the meantime, I’ll keep searching.