Marketing Report
Retail media is 50 per cent more effective than social media at driving responses to advertising, report

Retail media is 50 per cent more effective than social media at driving responses to advertising, report

PubMatic, an independent technology company delivering digital advertising’s supply chain of the future, 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% 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% 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%, compared to 32% with non-retail websites, and 29% with out-of-home advertising, such as screens in shopping centres. Social media is the least effective channel with only 27% 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% 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% of shoppers in the region found to be responsive to retail website ads compared to 43% 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% of shoppers are engaged by advertising on retail websites — where they can immediately buy something — compared to 34% on social media. Retail website advertising engagement in middle families rises to 42%, while social media engagement falls to 30%, 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% and 73% respectively, compared to social media where a 64% response rate in young families falls to 53% 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% on non-retail compared to 17% on social media), and going to another website for more information (22% vs. 18%).

Peter Barry, VP of Addressability and Commerce Media, APAC, PubMatic: “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. 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.”

The full report can be accessed here