Industry Seeks to Understand, Leverage Retail Media Networks

Attendees learned a lot of hard facts about retail media networks during the Path to Purchase Institute’s Retail Media Forum, a virtual event held March 30-31. They received actionable takeaways about what to consider when planning their activity, what to do when executing their programs, and how to evaluate their performance at the end. (Recordings of every Retail Media Forum session are available to members of the Institute in the presentation library at P2PI.org.) How to Navigate the Retail Media LandscapeReid Greenberg, EVP, Global Digital & E-Commerce Practice, KantarThere are four big trends taking place right now that make retail media more important than ever. Direct results are now media imperatives. Retail media is getting bigger and bigger, spurred by the COVID-19 pandemic. We’re getting into a world that will have no more (or much less) third-party data, so retailers are gravitating toward new ways to use their first party information about shoppers to attract money from advertisers who still want to target personalized ads. From many verticals, the journey from discovery to actually purchasing is being dramatically compressed.Focusing on the big four retail media players will be critical:Walmart has a massive system behind its Walmart Connect platform, but execution and transparency needs improvement. The retailer has data on 150 million shoppers per week, and its omnichannel shoppers spend twice as much in stores over time.Kroger is very hungry to figure out how to become a disruptive advertiser outside of its store to drives sales back to its 84.51 platform. Measurement is more holistic than other media providers and connects to broader marketing efforts. The ability to turn off an ad after it has driven a purchase enables greater relevancy.Amazon Advertising is a behemoth in terms of its capabilities, offering advanced measurement techniques and tools along with massive reach and high shopping frequencies, but it offers limited exposure to its advertising team.Target’s Roundel allows media buyers to use their own demand-side platform and is very conscious of where ads show up, promising “brand-safe” placement. The retailer is very clean in its design and architecture, but lacks benchmarks as a newer player in the media space. Connecting the Retail Media Ecosystem: Roundel & CriteoDavid Peterson, Vice President, Sales, Roundel, Target; and Sherry Smith, Managing Director, Retail Media, Americas, CriteoRetail media isn’t just a shopper marketing play anymore. It’s delivering full-funnel marketing solutions. Recognizing this, Target renamed its in-house media company Roundel in 2019, signaling plans to be a more aggressive player in the sector. Since doubling down on its media network, the retailer has seen growth in its e-commerce business – fueled by the COVID-19 pandemic – and most notably in its alternative fulfillment services such as Drive Up curbside pickup, which grew 600% in 2020. As shoppers embrace more ways to shop at the retailer across digital and in-store, brand marketers need to adapt their strategies to reach shoppers wherever they are and, according to Peterson, retail media is in a great position to do that. Among other key takeaways:Omnichannel shoppers at Target spend four times more than in-store-only shoppers and 10 times more than online-only shoppers.Retailer media networks have the ability to measure results that help inform not only if a campaign was successful, but how it can be improved in the future. Retail Media: Overview, ComparisonsMindy Fashaw, COO, Pacvue; Karen Satterlie, E-Commerce Manager, HenkelAmazon and Walmart own and operate their own platforms, while Instacart (a third-party marketplace) and Criteo (a platform provider) place advertisements for retailers. Amazon generally has the highest amount of paid placements, and that number has continued to increase in the past year. Walmart, in contrast, has fewer paid placements on the first page of search results, but Walmart category buyers have the capability to manually push or pin certain SKUs to top placements. Amazon’s platform offers huge scale but is complex, competitive and expensive. Walmart’s is growing fast, but it has a low click-through rate. Instacart delivers high conversion but no store- or region-specific data. And Criteo covers a wide range of retailers but no keyword-based targeting. Among other key takeaways:The number of paid placements on the first page of search varies across platforms. Retailers are really aware of the prime real estate these search results represent, and therefore they’re changing the placements in which advertisers have opportunities to invest.While paid keyword search is important, brands shouldn’t get stuck on that alone. It’s also important to show up anywhere on the retailer site where people are shopping. Retail Media 3.0: Retail Marketing NetworksSpencer Baird, EVP & President, Martech, Inmar IntelligenceThe evolution of retail media networks has involved three phases:Retail ad networks, “which was kind of code for, if there’s a way to monetize it, let’s figure it out, let’s get the logo slapped on and let’s make some cash,” said Baird, whose career includes time at H.J. Heinz, Dannon, Kellogg and Ahold Delhaize/Peapod.Retail media networks, which is “the here and now … age of retailers stepping forward, enabled by ad tech companies, putting their stake in the ground,” he said. “It’s much more integrated between marketing and merchandising on the retail side, and you’re seeing a lot of good behavior on the CPG side.”Retail marketing networks, which is the “next generation,” according to Baird. “We think media is too narrow, and frankly creates a lot of confusion. In the world of retail marketing networks, it’s a high degree of integration between marketing and merchandising, it’s monetization in the context of shopper needs, and it’s a whole new territory of opportunities.”The difference between media networks and marketing networks is “monetizing hoping you meet shopper needs” vs. “meeting needs trusting that you’ll sell a lot more and [then] be able to monetize on a much higher level,” he explained. “Those two things send you in very, very different directions.” Retail Media and Macro Shopper StrategiesModerator: Ethan Goodman, SVP of Commerce Media, The Mars Agency; panelists: Marie Catanzaro, Team Lead, Shopper Activation, Mars Petcare; Stephen Chriss, Customer VP, Shopper & Omnichannel Marketing, Campbell Soup Co.; Lisa Matos, VP, Sales Capabilities and Commerce, Conagra BrandsThis panel discussion addressed retail media topics such as which discipline/functional team should own it, how it should be funded, which KPIs should be reported, how it fits into joint business planning, and even if it should include in-store offerings. Panelists suggested retail media needs to be handled in a hybrid manner internally, which requires the need to remove silos. Companies should treat their activity as one demand-connected commerce experience across trade and sales, and can lean on the media team for execution. In regard to pushing back on retailer demands, panelists suggested there needs to be a bit of a balance. “They respect us, we respect them. We’re trying to grow each other’s business,” Chriss said. Other takeaways included:Not all retailer platforms are created equal, both from an inventory standpoint and the data they provide. In regard to JBP alignment, every retailer is different. Some isolate their networks so they aren’t included in strategic planning.Brands ideally need consistent measurement across platforms, and often want a hard-core ROI perspective. Return on advertising spend (ROAS) needs to evolve as a metric. An unbiased third-party measurement provider could be the answer. Shopper Behavior on Retailer WebsitesPeter Breen, Editor-in-Chief, Path to Purchase InstituteThe Institute fielded an online survey of 1,000 shoppers In January with the goal of answering two questions that are critical to any discussion about effective retail media activation: Why are shoppers visiting retailer websites, and what are they doing when they get there?In terms of trip drivers, 68% of respondents said they typically visit retailer websites with a specific goal in mind rather than being prompted by any advertising or promotional tool. However, 31% of shoppers were inspired by emails from the retailer, and more than 20% were inspired by digital ads they encountered either on social media, search engines, or other websites (such as entertainment, sports or brand websites).Once they get to the retailer website, shoppers take advantage of a wide variety of tools to help them find and buy the products they want. While only one tool is currently utilized by a majority of shoppers – the search engine at 61% – nearly all tools have a significant impact on the purchase decisions of shoppers who are using them.In general, shoppers are tapping into tools that help them accomplish three actions:Decide which products to buy, such as product ratings and reviews.Plan the trip, like reviewing their purchase history and compiling a shopping list.Find deals, such as consulting the digital circular and searching digital coupons.One final significant fact: 39% of online shoppers said the typically visit the retailer’s website to begin a trip that ultimately ends with purchases made in a brick-and-mortar store.For additional results from the survey, read "A Shopper-Centric View of Retailer.com." Challenger Brands Leveraging Retail MediaJohn Denny, VP, E-Commerce & Digital, Cavu VenturesPhysical store distribution has dominated CPG strategy for the last century, but digital is now influencing the vast majority of sales even if they still occur in stores. The tools that have been created to influence today’s consumers are more powerful than anything that has previously existed, and challenger brands are far more likely than larger companies to leverage them in innovative new ways to accelerate quickly. Challenger brands:Understand that e-commerce success drives retail demand. Their strategy is to launch through their own channel first and then follow with physical retail.Go all in on digital strategies. They prioritize the new digital platforms and invest at aggressive levels.Zig when everybody is zagging. They leverage e-commerce and retail media to build the brand while everyone else focuses merely on ROAS and performance.The entire industry believes that retail media is about return on ad spend and performance marketing, but it can be a brand-building platform from day one. The idea that performance advertising is all that matters is a myth. The reality is that brand messaging outperforms performance messaging 80% of the time. Kellogg & Omnichannel Sales at KrogerGail Horwood, Chief Marketing Officer, Kellogg North America; Cara Pratt, SVP, Kroger Precision Marketing, 84.51It’s hard to ignore the rise of gaming. More than 50% of the U.S. population is engaging in some form of gaming, and core gamers spend more than 15 hours a week on the activity. Recognizing this consumer behavior, Kellogg identified multiple brands in its portfolio, such as Cheez-It and Pringles, that over index as go-to snacks for gaming. Armed with the insight of this emerging gaming/snacking occasion, the manufacturer teamed with Kroger for a program with Xbox that leveraged the grocer’s Kroger Precision Marketing media platform. Horwood noted that working with retail media networks is a learning journey because “if we simply evaluate retail media only through the ways we’ve evaluated our traditional media investments ... we’re missing a larger opportunity.” Among other key ways Kellogg approaches retail media:It looks at holistic measurements. Traditionally, Kellogg has used marketing mix modeling, but now it’s augmenting that with new tools and measurement strategies.It leverages data. The company is always game to mine new sets of data, such as KPM’s loyalty and consumer data, to unlock unique activations for shoppers.It has dedicated resources. The manufacturer is allocating the resources needed to understand and unlock value through measurement in retail media. “This is not a part-time job for a couple of people,” said Horwood. Oreo Thins: Mondelez’s Recipe for SuccessSteven Boal, CEO and Co-Founder, Quotient Technology; Anne Martin – Customer Director, Shopper Marketing, and Steve McGowan, RVP, Omni-Shopper Activation & Strategic Partnerships, Mondelez InternationalThe emergence of retail media doesn’t necessarily mean “Out with the old and in with the new,” especially when the old is in-store merchandising. However, in Mondelez’s experience, it does mean marketers should adjust the old so it works in tandem with the new. In other words, creating a truly omnichannel experience. The CPG giant is doing that, most recently through a program with Albertsons Companies aimed at driving trips and increasing awareness of Oreo Thins that started with a digital coupon. The partners leveraged the retailer’s Quotient-powered retail media network, Albertsons Performance Media, to target shoppers that aligned with Oreo’s brand segments and used incremental in-store displays to match the online experience and drive users to the digital coupon. Among the key aspects of the program’s success:Strong retailer relationships. While retail media data and metrics are obviously important, the relationship with the retailer allows for effective collaboration on test campaigns.Linking digital and in-store. Amplifying the digital consumer experience with in-store merchandising is key to driving meaningful and measurable in-store sales velocity.Accelerating digital spending. Mondelez fully acknowledges that, as it increases investments in search marketing, digital content and media, it becomes even more critical to maximize efficiencies and campaign outcomes. What it Takes to Win with Retail MediaMike Ellgass, EVP, Retail Marketing Solutions, IRI; Abishake Subramanian - Senior Director and Head of Advertising & Partnerships, Sam’s Club Media GroupThe COVID-19 pandemic has without question spurred a massive shift in shopper behavior, and the rise of retail media has been a major part of the ripple effect it has had on shopper marketing and e-commerce. But while many retailers have come out as winners amid the pandemic, some brand marketers are still evaluating how they feel about the growing retailer-led media opportunity. Subramanian helps Sam’s Club address that by giving brand marketers what he says they need to succeed, and pushing the Sam’s Club Media Group team to think like performance marketers to better target the retailer’s members. That often means targeting members across touch points. For example, some marketers use print ads to promote an offer in an instant savings booklet and amplify the deal through digital touchpoints for deeper targeting. The goal is learning how to drive consumption and draw new consumers to a category. Providing brands with in-campaign data and insights is also becoming more critical. In terms of the future of retail media, Subramanian has his eye on:Machine learning to enhance one-to-one personalization at scale.Data partnerships to provide enhanced relevance.Campaign optimization via algorithms.Self-service tools for advertisers. Non-Endemic Opportunities for PartnershipsJanine Flaccavento, New Stream Media Solution Lead, Merkle; Brent Rosso, Former VP, Digital Media, TargetNon-endemic advertisers are brands that don’t sell directly through a particular retailer but offer complementary products or services. Retail media networks offer an opportunity for non-endemic brands to connect with shoppers that might be similar to their own consumer demographic. In defining the non-endemic advertiser at a big-box retailer, the range starts at brands in a “category sold but product not listed” (such as DTC brands). Then it continues to “consumer adjacent” (paint and appliance brands), “connected through partnership” (Redbox, MasterCard) and “connected through behavior” (Molly Maid, Mass Mutual). It concludes at “not connected but aligned to audience/mindset” (Ford, Hulu) and “not connected or aligned to mindset” (financial and home security). A total of 76% of CPG brands plan to have to non-endemic spending, and 19% of those already are doing so, according to research from Merkle.Noteworthy use cases include a co-branded effort between CVS Media Exchange and PayPal that ran on a dedicated web page, product display pages and sponsored social media updates; and Amazon’s monetization of its owned-and-operated spaces, such as on-box advertising, lockers, Prime Now and Amazon Go, Treasure Truck and Amazon Books. Best Practices for Shopper MarketersModerator: Jason Young, Digital Industry Expert; panelists: Kasey Moss, Brand Director, CHOMPS; Katie Neil, Director, Connected Commerce, Coca-Cola Co.; Nicole Rainey, Shopper Marketing Manager, Mars WrigleyBrand marketing organizations are utilizing retail media networks as both an advertising tool and a sales driver. When looking at a network’s suite of product solutions, brands have to “learn by doing” to determine where and how to best deploy the capabilities. As some networks are able to provide data in near- or real time, brands could test anywhere from a few hours to a few weeks to decide how to use the solutions. At the outset, marketers have to frame up and connect with the consumer in the right place with the right message at the right time. Depending on the end goals, they can either seek to drive shopper conversion or brand awareness. As the brand journey evolves, they should establish benchmarking and decide, “What do we want to learn out of this?” And once they learn it, ask, “What’s the path forward?” Brand marketers have to set the tone with any retailer media network and make clear:What moves the needle on their business.What exactly they need to have measured.What they need to know about the network’s ability to provide what they need as a partner.Their needs for the network to be as nimble, agile and transparentas possible to optimize performance.

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