PubMatic Study: Advertising On Retail Media Is 50% More Effective Than Social Media
PubMatic has released a new study examining the influence of digital media on shopper behaviour at the top and bottom of the funnel. The research found that retail websites are approximately 50 per cent more effective at driving a response from shoppers than social media.
Commissioned by Inside Retail and conducted by PubMatic, 500 Australian shoppers were surveyed in March 2024 to help retailers and advertisers understand how consumers engage with and respond to advertising across different types of media.
Driving higher engagement with retail media
Driving engagement at the top of the funnel — whether by raising brand awareness, informing or sparking curiosity — is crucial to lead consumers down the path to purchase. The study found that 34 per cent of shoppers engage with ads seen on retail websites (which includes retailer websites, brand websites, and online marketplaces).
Delving further into this category, the subset of ‘retailer websites’ – defined as online stores that sell multiple brands – achieves an even higher engagement level at 41 per cent, compared to 32 per cent with non-retail websites, and 29 per cent with out-of-home advertising, such as screens in shopping centres. Social media is the least effective channel with only 27 per cent of shoppers engaging with ads on the platform.
Retail websites get powerful responses from shoppers
Moving down the sales funnel, retail websites are around 50 per cent more effective than social media at getting a response from shoppers (defined as clicking the ad, visiting other websites to find out more or looking for the product in physical stores), with 64 per cent of shoppers in the region found to be responsive to retail website ads compared to 43 per cent for social media. This gulf widens with age: social media sees a dramatic fall in response from consumers over 40, while retail websites maintain strong response rates up to 60, with only a shallow decline beyond.
Engaging and getting a response from families
Retail websites drive the most advertising engagement across young families (with children under 10) and middle families (with children aged 10–18) — the two highest spending market segments. Among young families, 39 per cent of shoppers are engaged by advertising on retail websites — where they can immediately buy something — compared to 34 per cent on social media. Retail website advertising engagement in middle families rises to 42 per cent, while social media engagement falls to 30 per cent, the lowest of any media surveyed.
At the lower end of the funnel, retail websites maintain their strong performance with families. Response rates are consistent across both young and middle families at 72 per cent and 73 per cent respectively, compared to social media where a 64 per cent response rate in young families falls to 53 per cent in middle families, where it is again the lowest performing media channel in the segment.
Non-retail sites also perform better than social media
The study found that non-retail websites, such as news, lifestyle, etc., also outperform social media when it comes to driving responses to advertising, making them the better choice for advertisers looking to scale campaigns offsite and extend audience reach beyond retail sites. This includes clicking on ads to find out more (22 per cent on non-retail compared to 17 per cent on social media), and going to another website for more information (22 per cent vs. 18 per cent).
“Retail websites provide an exciting opportunity for advertisers to target high-value audiences across the full sales funnel in a privacy-compliant manner, without relying on third-party cookies,” said Peter Barry, VP of addressability and commerce media, APAC at PubMatic. “By utilising a combination of retail-site advertising and non-retail sites on the open web, advertisers have the ability to successfully scale campaigns, extend audience reach in the evolving digital advertising landscape, and boost customer engagement in the APAC region”.
Methodology:
To help retailers and advertisers navigate the challenges of modern digital media programming, PubMatic surveyed 500 randomly selected Australian shoppers in March 2024 to better understand how they feel about and engage with advertising on different types of media.
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