Asos will now be delivering more sponsored and targeted ads to its shoppers in an effort to generate increased consumer demand and bolster partnerships with more brands. The e-commerce fashion retailer has entered into an exclusive deal with ad tech provider Criteo to enhance its retail media operation.
Under the three-year agreement, Criteo’s retail media technologies will be integrated to power both Asos’ sponsored ads and enhanced display ads powered by the retailer’s first-party data. The initial deployment will take place across the U.K., U.S., France and Germany, before expanding to all global territories where Asos operates.
Sponsored ads are a new featured offering on Asos.com, enabling intent-based targeting of ads within search results and product listing pages. Ads will be placed within a curated edit of approximately 70,000 products, sourced from nearly 900 global and local third-party brands as well as its mix of fashion-led in-house labels, including Asos Design, Asos Edition, Asos 4505, Topshop/Topman and Collusion.
On-site display ads, which Asos already had been using prior to the partnership, can combine branding and product information in an effort to increase brand awareness at the point of sale. In leveraging the Criteo platform to bring display ads to more pages on its site, the U.K.-based merchant can help connect new custom audiences with relevant brand messages on Asos.com and the company’s mobile app.
Off-site ads will also be provided through Criteo, which can expand the retailer’s ad targeting possibilities across thousands of premium publisher sites, as well as connected TV (CTV) to enable more commerce experiences across the buyer journey.
Retail media is a growing outlet for merchants that are looking for better opportunities to gather more customer data, and ultimately improve on their relationships with brands.
According to a forecast from eMarketer, U.S. digital retail media ad spending grew 31.4 percent to reach $40.81 billion in 2022. This year, the total will grow 25.8 percent to $51.36 billion, making up nearly 20 percent of digital ad spending.
The industry’s top two players, Amazon and Walmart, both pouring massive amounts of money into ad spending as it is, are directing more capital to their retail media programs. According to data from EMarketer, Amazon’s retail media ad spending jumped 20.4 percent in 2022, with Walmart’s spending in the category nearly doubling that at 39.7 percent.
But this kind of advertising outlet can be applied well beyond general retail, with companies like Macy’s, Nordstrom, Dick’s Sporting Goods and even the revived Lord & Taylor all launching their own retail media networks. According to McKinsey & Company, 76 percent of apparel and footwear advertisers anticipate an increase in retail media spending levels. Retailers including Best Buy and Michaels are among those partnering with Criteo for integrated targeted advertising programs.
Asos is also fortifying its retail media capabilities as it is going through a bit of a rough patch, with sales falling 4.1 percent in the company’s first quarter to 1.34 billion pounds ($1.62 billion). Asos expects to report a loss for the first half of the year.
The company identified approximately 300 million pounds ($365 million) of cost savings opportunities, including shuttering more than 35 unprofitable brands, implementing low-single-digit price increases and winding down three storage facilities.
As the e-commerce fashion retailer tries to figure out its finances, it also is still seeking a permanent chief financial officer after Mat Dunn departed the post last October. While Katy Mecklenburgh was named interim CFO in Dunn’s absence, she will step away from the role in May. Former MatchesFashion CFO Sean Glithero was appointed to replace Mecklenburgh on an interim basis when she leaves the role in May.
Asos also hired a senior restructuring executive, Scott Millar, in January, to assist its finance department as it aims to strengthen the business.
As for the Criteo partnership, Asos Media Group (AMG) expects to use the company’s solutions to scale campaign volume and resulting advertising revenue, while complementing their existing rich advertising offering across creative solutions, social media, targeted email and app push notifications.
Currently, AMG works directly with Asos’ top 150 brand partners, but now looks to onboard 200 more.
The partnership also is aimed at improving targeting and measurement capabilities for advertisers, driving greater performance and commerce outcomes including sales on Asos.com. Criteo will also support AMG’s sales efforts to brands and agencies in key markets.
“The Asos vision is to become the go-to global destination for fashion-loving 20-somethings and we want to take brands on the journey with us, helping advertisers showcase their products through our fashion lens,” said Elton Ollerhead, director of Asos Media Group, in a statement. “Criteo’s technology is proven at scale and designed for retail, which opens up enormous opportunity for brand advertisers across our key markets.”
Working with Asos’ in-house media team selling to global brands, Criteo aims to drive demand among both mid- and long-tail brand targets. Criteo also intends to spur incremental agency demand through its client solutions teams across Europe and the U.S.
“Asos is a market leader that gives its customers an exceptional shopping experience, which Criteo is excited to enhance with relevant and native advertising experiences,” said Sherry Smith, general manager, global enterprise at Criteo, in a statement. “We look forward to building our partnership and delivering best-in-class commerce media solutions for Asos brand partners.”