Retail Media Networks hog all the headlines. Now it’s the turn of the non-retail media networks to grab the limelight. Indeed, the range of ad networks appearing means that we might have to come up some new labels as ‘Retail Media Networks’ clearly apply to retailers.
So where do the latest announcements from PayPal, Uber, Chase or Revolut fit in? ‘Financial Services Media Networks’ hardly rolls off the tongue and the ‘Commerce Media’ moniker being thrown around by AdTech and Media Agencies is not going to catch on – as what exactly is ‘commerce’?
These new Non-Retail Media Network are yet more walled garden networks like Meta or Amazon who have become a publisher with an ad network as they have an incredibly rich data set.
Regardless of labels, the new announcements are very interesting for reasons we shall see. Let’s start with Chase.
PayPal Advertising Network
PayPal is developing an advertising sales business built on the vast amount of data collected from tracking purchases and spending habits of its users.
To lead this new initiative, PayPal has brought on Mark Grether, who previously started Uber Advertising, which went from zero to over $900m in just four years.
PayPal’s aim is to sell advertisements not only to its customers but also to external advertisers who do not sell products through PayPal. PayPal Advertising is one of the newer networks that can really offer retail media-like propositions to non-endemic advertisers.
Non-endemics are brands that do NOT sell with retailers to whom they advertise. For example, if you were a grocer with great 1st party customer data, you might be able to target financial services, travel, telco, automotive or office materials by saying “we have great audience data and you can advertise against it”.
Why advertising? The majority of PayPal revenue comes from transaction fees (90.4%) while revenue from other value-added services accounts for only 9.6% of revenue. Advertising provides a high-margin scaleable business that has a USP that is attractive to advertisers: in the press release, PayPal claim that their data could provide insights into purchasing behaviour both online and in physical stores.
In the first quarter, PayPal processed 6.5 billion transactions from about 400 million customers, according to their latest earnings report. 36 million merchants use PayPal in over 165 countries worldwide. Indeed, in certain countries, penetration of Paypal with eCommerce is over 80%.
Chase Media Solutions by JP Morgan Chase:
JPMorgan Chase’s new digital media business, Chase Media Solutions, was announced on April 3. They claim that their solution can deliver targeted advertising to their 80 million customers.
What’s the driver? Their first-party transactional data full of customers’ purchase histories. Retail Media Networks (RMNs) have transactional data from the individual retailer’s purchases in their own stores and channels.
In contrast, Chase customers’ purchase histories span a wide range of retailers and businesses.
Revolut Advertising Network
Revolut – one of the many app-only banks that have taken Europe by storm – is also planning an advertising sales network. They have hired a TikTok executive to lead a ‘media strategy’ as it seeks to diversify revenues/
Revolut’s head of growth Antoine Le Nel told the Financial Times that “Revolut could become a media business . . . a place where you have an audience and data about the audience and you monetise this. We could in the near future derive a “proper chunk” of its total revenue from targeted advertising. We know how users navigate inside the app, we know some of their interests that they have because they’ve clicked on this and that”.
Revolut has hired a sales team of about 30 people for its media strategy and have an internal target for revenue derived from advertising of about £300mn by 2026. Its entire business generated revenues of £923mn in 2022.
What drives non-retail media?
Why are these non-retail media networks popping up? Andrew Lipsman, founder of consulting firm Media, Ads + Commerce points out that “Financial services companies need substantial growth in ad sales to impact their overall financial performance, as their primary businesses generally have higher profit margins than retail chains,” Lipsman noted. “These sorts of media networks could potentially charge higher ad rates than some retail networks due to its detailed consumer data. For instance, PayPal might group consumers by their relative affluence, or their status as business travellers“.
The final words can be left to Rich Muhlstock, President of Chase Media Solutions. According to him “Our deep understanding of consumer spending across categories has driven us to reimagine what retail media networks can offer. Like retailers, we have first-party data and a dedicated audience. But what sets us apart is the unrivalled scale and insights from our customers – having long-served as a trusted guide for their financial decisions. Chase reaches across brands, merchants and shopping verticals, providing a comprehensive view of purchase behaviour; this strengthens the degree of personalisation, helping brands deliver offers that stoke consumer interests.”
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You are in: Home » Retail Media » OPINION The rise and rise of non-retail media networks
OPINION The rise and rise of non-retail media networks
Colin Lewis
Retail Media Networks hog all the headlines. Now it’s the turn of the non-retail media networks to grab the limelight. Indeed, the range of ad networks appearing means that we might have to come up some new labels as ‘Retail Media Networks’ clearly apply to retailers.
So where do the latest announcements from PayPal, Uber, Chase or Revolut fit in? ‘Financial Services Media Networks’ hardly rolls off the tongue and the ‘Commerce Media’ moniker being thrown around by AdTech and Media Agencies is not going to catch on – as what exactly is ‘commerce’?
These new Non-Retail Media Network are yet more walled garden networks like Meta or Amazon who have become a publisher with an ad network as they have an incredibly rich data set.
Regardless of labels, the new announcements are very interesting for reasons we shall see. Let’s start with Chase.
PayPal Advertising Network
PayPal is developing an advertising sales business built on the vast amount of data collected from tracking purchases and spending habits of its users.
To lead this new initiative, PayPal has brought on Mark Grether, who previously started Uber Advertising, which went from zero to over $900m in just four years.
PayPal’s aim is to sell advertisements not only to its customers but also to external advertisers who do not sell products through PayPal. PayPal Advertising is one of the newer networks that can really offer retail media-like propositions to non-endemic advertisers.
Non-endemics are brands that do NOT sell with retailers to whom they advertise. For example, if you were a grocer with great 1st party customer data, you might be able to target financial services, travel, telco, automotive or office materials by saying “we have great audience data and you can advertise against it”.
Why advertising? The majority of PayPal revenue comes from transaction fees (90.4%) while revenue from other value-added services accounts for only 9.6% of revenue. Advertising provides a high-margin scaleable business that has a USP that is attractive to advertisers: in the press release, PayPal claim that their data could provide insights into purchasing behaviour both online and in physical stores.
In the first quarter, PayPal processed 6.5 billion transactions from about 400 million customers, according to their latest earnings report. 36 million merchants use PayPal in over 165 countries worldwide. Indeed, in certain countries, penetration of Paypal with eCommerce is over 80%.
Chase Media Solutions by JP Morgan Chase:
JPMorgan Chase’s new digital media business, Chase Media Solutions, was announced on April 3. They claim that their solution can deliver targeted advertising to their 80 million customers.
What’s the driver? Their first-party transactional data full of customers’ purchase histories. Retail Media Networks (RMNs) have transactional data from the individual retailer’s purchases in their own stores and channels.
In contrast, Chase customers’ purchase histories span a wide range of retailers and businesses.
Revolut Advertising Network
Revolut – one of the many app-only banks that have taken Europe by storm – is also planning an advertising sales network. They have hired a TikTok executive to lead a ‘media strategy’ as it seeks to diversify revenues/
Revolut’s head of growth Antoine Le Nel told the Financial Times that “Revolut could become a media business . . . a place where you have an audience and data about the audience and you monetise this. We could in the near future derive a “proper chunk” of its total revenue from targeted advertising. We know how users navigate inside the app, we know some of their interests that they have because they’ve clicked on this and that”.
Revolut has hired a sales team of about 30 people for its media strategy and have an internal target for revenue derived from advertising of about £300mn by 2026. Its entire business generated revenues of £923mn in 2022.
What drives non-retail media?
Why are these non-retail media networks popping up? Andrew Lipsman, founder of consulting firm Media, Ads + Commerce points out that “Financial services companies need substantial growth in ad sales to impact their overall financial performance, as their primary businesses generally have higher profit margins than retail chains,” Lipsman noted. “These sorts of media networks could potentially charge higher ad rates than some retail networks due to its detailed consumer data. For instance, PayPal might group consumers by their relative affluence, or their status as business travellers“.
The final words can be left to Rich Muhlstock, President of Chase Media Solutions. According to him “Our deep understanding of consumer spending across categories has driven us to reimagine what retail media networks can offer. Like retailers, we have first-party data and a dedicated audience. But what sets us apart is the unrivalled scale and insights from our customers – having long-served as a trusted guide for their financial decisions. Chase reaches across brands, merchants and shopping verticals, providing a comprehensive view of purchase behaviour; this strengthens the degree of personalisation, helping brands deliver offers that stoke consumer interests.”
Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.
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