How Thrive Market Is Building A Different Type Of Retail Media Network

As retail media networks become table stakes for retailers, Thrive Market is charting a distinctly different course. While public companies like Walmart benefit from advertising as a profitable revenue stream — contributing 30% of the retailer’s bottom line according to Solomon Partners — Thrive’s status as a private Public Benefit Corporation has allowed it to prioritize member experience over immediate revenue gains.

This approach appears to be working. Since launching in November, Thrive’s retail media network has doubled revenue expectations, with over 25% of brand partners investing in the platform within its first month. But for a membership-based retailer that maintains full control over its inventory — no marketplace sellers here — success is measured differently.

“Finding that right balance of ad density on the page is super important,” explains April Lane, Thrive Market’s Chief Merchandising Officer. “We want to make sure that these ads are not only useful to brands, but also useful to members.”

It’s a timely test case as retail media surges toward what EMARKETER projects will be a quarter of total ad spend by 2028.

Members, not Customers

Thrive Market’s membership model creates unique requirements for its retail media approach. Unlike typical ecommerce platforms where customers purchase one or two items, Thrive’s members average 15-20 items per basket. This basket-building behavior necessitates a different advertising strategy.

“When we think about how to layer ads into that experience in a way that’s tailored to them and makes sense to them, we knew that sure, a lot of things like sponsored products in search, out of the gate, makes total sense,” explains Lane. “But after that, we’re going to have to really start to think through – is there a place for ads in our auto ship experience? What does that look like?”

The membership model also creates heightened sensitivity around ad density and user experience. While Thrive Market declined to provide specific ad performance metrics, Lane emphasized the importance of balance: “Finding that right balance of ad density on the page is super important. We want to make sure that these ads are not only useful to brands, but also useful to members.”

Technology Partner Selection

This focus on member experience heavily influenced Thrive’s selection of Instacart’s Carrot Ads as their retail media technology partner. “We sat down and made a really comprehensive list of criteria. And part of that criteria actually came from talking to our brands,” says Lane. Key requirements included self-service capabilities, robust measurement tools, and integration with popular ad management platforms like Pacvue.

Lane, who previously spent 12 years at Amazon where she helped launch retail media on Amazon Fresh, brought valuable perspective to the partner selection process. “Fast forward to 2024, it’s 12 years after those days. And there’s actually a lot of good technology on the market today,” she notes. “For our size and scale, it doesn’t make sense to reinvent the wheel. It also, frankly, from a brand perspective, doesn’t make sense for us to stand up a separate platform that requires a brand to learn yet another tool and system.”

Celebrating Emerging Brands

While many retail media networks focus primarily on large CPG brands with big ad budgets, Thrive Market’s approach reflects the company’s affinity with emerging brands.

This focus influenced key platform decisions. With over 7,500 SKUs from hundreds of brands, many of them smaller players in the health and wellness space, self-service capabilities were crucial. “One of the challenges we have is we carry a long tail of brands,” says Lane. “In today’s day and age, most brands expect to be able to manage these types of programs on their own and be able to optimize them over time.”

The vendor-based model, where Thrive maintains direct relationships with brands and controls inventory, also enables tighter integration between advertising and product curation. Unlike marketplace-based retail media networks where ad relevance can be harder to maintain, Thrive’s curated approach helps ensure ads align with both member expectations and brand objectives. Early results support this strategy: the company reports “incredibly healthy” click-through rates on sponsored product ads, which they attribute to the high relevance of ads served within their curated catalog.

Looking Ahead

The platform launched with sponsored product ads across multiple page types including search, browse, product listing pages, and “Buy It Again” carousels. Early performance has exceeded expectations, with revenue doubling projections in the first two months.

Future plans include expanding into display advertising and video formats in spring 2024. The company is particularly focused on developing unique advertising integrations that align with their membership model, including potential innovations in auto-ship programs and deal experiences.

“We’re going to need to really think through how we thoughtfully integrate advertising throughout the entire site,” says Lane, emphasizing the importance of finding a technology partner willing to tackle these unique use cases.