On July 15, 2021, Publicis Groupe’s Epsilon announced that it would acquire CitrusAd. The acquisition combines the service-oriented Epsilon, whose strengths in retail media lie in offsite monetization and first-party data enrichment, with tech platform CitrusAd, which excels in onsite monetization.
We think this matchup of providers in the retail media space will give existing clients of Epsilon and CitrusAd a compelling omnichannel media monetization solution. It will give retailers good access to demand sources as well, with Publicis’ large client base of endemic and non-endemic advertisers and CitrusAd’s demand-side integrations.
This will not be the last acquisition or merger in the retail media space though. This is just the beginning of a larger shift in the retail media partner ecosystem. We predict that further consolidation will come as:
- Google emerges as a bigger player. Google has been in the retail media space for some time through its Ad Manager offering to help retailers place display ads onsite. We have spoken to several retailers that use one tech platform for search ads onsite, like CitrusAd or Criteo, and Google for onsite display. But at the same time, retailers tell us that they are planning to consolidate their media monetization stack in the next three years. So look for Google to build and buy its way into more facets of retail media like data and store monetization going forward to meet retailer needs.
- Retailers demand omnichannel solutions. Retailers with advanced media networks are investing heavily to monetize their e-commerce sites, first-party data, and physical stores. Walmart’s omnichannel investments in its Connect platform paid off recently: It saw a 95% year-over-year increase in ad sales. That means partner decisions for retail media will increasingly skew toward providers that are able to activate media campaigns across touchpoints. But the current ecosystem of providers is very fragmented. That will change as traditional shopper marketing platforms merge with onsite media tools.
- Advertisers flock to retailers for customer data access. The third-party cookie is going away, which means audience targeting will change drastically. This puts retailers with a media business and large loyalty programs in a great position to allow brands to target consumers in a more granular way. Watch for marketing database agencies outside retail media to move into this space, with acquisitions of activation platforms to make data monetization the largest revenue stream in retail media.
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