Are brands making a mistake by investing in retail media? It’s more complicated than that, says Katie Streeter Hurle, Chief Strategy Officer, SMG
It may seem like an odd question to ask coming from me, and in the context of the enormous growth and attention retail media has enjoyed this year and predicted future investment from brands.
A key reason retail media is growing at speed is because of its ability to deliver exceptional conversion rates. Indeed, some in the sector, particularly in the US, believe retail media will begin to charge a premium for its ability to deliver results that outperform other media.
The ability to engage people in-the-moment at the bottom of the funnel is an indisputable strength. But a media sector that just offers proximity to purchase as a super-power is surely one with limited long-term potential. Just like any other media sector, retail media leaders have been keen to promote retail media’s through-the-funnel omnichannel potential. But inevitably there’s a degree of introspection especially as the sector is at a very early stage. The question of whether retail media should stop trying to own everything in the funnel and focus on conversion is being asked.
Until recently there has been very little research to support retail media’s full funnel potential. Yes, we can see an occasional brand lift study at a campaign level on the upper funnel, but what about wider studies on retail media’s effectiveness in this area?
As part of an ongoing focus on the wider impact and effectiveness of retail media, we are working with The Path To Purchase Institute and research company MESH Experience to address a series of areas, for example, how effective is retail media at driving brand penetration? How much do digital retail media touchpoints drive in-store purchase and vice versa? How much impact does creative optimisation have on campaign performance? But we have started with a more fundamental question: can retail media drive brand awareness and equity?
Our study used a baseline survey to capture brand health metrics as perceived by consumers, combined with existing research studies from the past 16 months using US and UK data. Over three months, we tracked the real time experiences of more than ten thousand respondents, over 6 categories, who recorded the paid retail media they experienced. We then compared the post responses across respondents and compared results to the experiences they had to see how perceptions had changed.
We filtered out owned media, such as websites and product on shelf, and earned media such as PR and experiences such as buying a product so that only pure retail media advertising was measured enabling accurate comparison with the effect other mass media touchpoints had on people.
The findings show that not only is retail media driving conversion and huge impressions – but it is a brand builder too. Specifically, the study found retail media makes people 2.5 times more likely to consider a brand, multiplies brand affinity by 2.2 and delivers a Net Promoter Score (NPS) of x2.4.
When it comes to ‘experience engagement’ retail media scored lower than other paid advertising when rated by consumers for ‘positivity’ (RM 67% and non-RM 69%). However, for ‘persuasiveness’ it scored higher (RM 60% non-RM 56%) and for ‘relevancy’ it also scored higher (RM 68% non-RM 65%).
The objective of the study was not to suggest that retail media can replace other mass media. However, it does point to the important role retail media is playing on a daily basis keeping brands top of mind. It found 34% of total paid experiences for brands captured are coming from paid retail media; 52% of people report a retail experience in the average week and 1.9 experiences per week per person are retail media across a brand category.
It found retail media delivers an uplift multiple ahead of other mass paid media across various metrics such as knowledge (RM 2.5, non-RM 1.8) memory of a brand (RM 3.3, non-RM 1.5) and trust (RM 2.5, non-RM 1.6). For awareness, retail media is driving an impressive 3.6 times improvement.
The strength of the findings provides the sector with ammunition to argue that yes, it is a true cross-funnel medium.
So, what are the implications for brands and agency planners?
First, there is still a significant amount of education needed around the capabilities of retail media today. In some businesses, there still exists a notion that retail media is simply on-site search – this is far from the truth & is a hugely outdated view. Retail media is any media owned or operated by a retailer, or that uses retailer data in its activation. Under this definition, retail media is anything from activity in a store, on a website, via addressable TV or DOOH.
Secondly, it’s worth noting the context. A huge amount of energy and money is being focussed now on enhancing and digitising in-store environments (where the vast majority of UK and US sales occur) to enable retail media networks to utilise sales and loyalty data and critically to create a closed loop, integrating store and online commerce into a single media operation that drives performance and profit.
Retail Media Networks are beginning to form clear, differentiated propositions around audience and delivery characteristics. Hard work is being done at a national level to create measurement standardisation, and access to retail media estates is being streamlined.
It’s also important to remember the potential integration of retail with other media. Amazon and Walmart have committed to unifying their estates with TV, and UK players are experimenting with broadcast partners. Mixing OOH into retail media campaigns is standard practice. In this era of retail media, where a connected campaign can be activated across a whole ecosystem of channels at a 121 customer-level, we need different and scalable measurement solutions that capture the full effects of campaigns – not just those at the bottom of the funnel.
Put all this together and we have a very strong case for planners to explore how brand building creative strategies for endemic and non-endemic brands can be enhanced through retail networks. And we also have a case for integrating mid and upper funnel measurement methodologies to ensure we’re not underreporting the total effects of campaigns.
This is the first wave of data in what we hope will be a series, exploring specific roles retail media can play across the funnel. More research is needed from a range of sources, and we need more dialogue about what this means for retail in the media mix.
For an early-stage media sector that has enjoyed the first flush of hype, the study provides hard evidence that retail media has strong foundations for growth.
Author
Katie Streeter Hurle is Chief Strategy Officer, SMG
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
You are in: Home » Retail Media » GUEST COMMENT Are brands making a mistake by moving their budget into retail media?
GUEST COMMENT Are brands making a mistake by moving their budget into retail media?
Paul Skeldon
Are brands making a mistake by investing in retail media? It’s more complicated than that, says Katie Streeter Hurle, Chief Strategy Officer, SMG
It may seem like an odd question to ask coming from me, and in the context of the enormous growth and attention retail media has enjoyed this year and predicted future investment from brands.
A key reason retail media is growing at speed is because of its ability to deliver exceptional conversion rates. Indeed, some in the sector, particularly in the US, believe retail media will begin to charge a premium for its ability to deliver results that outperform other media.
The ability to engage people in-the-moment at the bottom of the funnel is an indisputable strength. But a media sector that just offers proximity to purchase as a super-power is surely one with limited long-term potential. Just like any other media sector, retail media leaders have been keen to promote retail media’s through-the-funnel omnichannel potential. But inevitably there’s a degree of introspection especially as the sector is at a very early stage. The question of whether retail media should stop trying to own everything in the funnel and focus on conversion is being asked.
Until recently there has been very little research to support retail media’s full funnel potential. Yes, we can see an occasional brand lift study at a campaign level on the upper funnel, but what about wider studies on retail media’s effectiveness in this area?
As part of an ongoing focus on the wider impact and effectiveness of retail media, we are working with The Path To Purchase Institute and research company MESH Experience to address a series of areas, for example, how effective is retail media at driving brand penetration? How much do digital retail media touchpoints drive in-store purchase and vice versa? How much impact does creative optimisation have on campaign performance? But we have started with a more fundamental question: can retail media drive brand awareness and equity?
Our study used a baseline survey to capture brand health metrics as perceived by consumers, combined with existing research studies from the past 16 months using US and UK data. Over three months, we tracked the real time experiences of more than ten thousand respondents, over 6 categories, who recorded the paid retail media they experienced. We then compared the post responses across respondents and compared results to the experiences they had to see how perceptions had changed.
We filtered out owned media, such as websites and product on shelf, and earned media such as PR and experiences such as buying a product so that only pure retail media advertising was measured enabling accurate comparison with the effect other mass media touchpoints had on people.
The findings show that not only is retail media driving conversion and huge impressions – but it is a brand builder too. Specifically, the study found retail media makes people 2.5 times more likely to consider a brand, multiplies brand affinity by 2.2 and delivers a Net Promoter Score (NPS) of x2.4.
When it comes to ‘experience engagement’ retail media scored lower than other paid advertising when rated by consumers for ‘positivity’ (RM 67% and non-RM 69%). However, for ‘persuasiveness’ it scored higher (RM 60% non-RM 56%) and for ‘relevancy’ it also scored higher (RM 68% non-RM 65%).
The objective of the study was not to suggest that retail media can replace other mass media. However, it does point to the important role retail media is playing on a daily basis keeping brands top of mind. It found 34% of total paid experiences for brands captured are coming from paid retail media; 52% of people report a retail experience in the average week and 1.9 experiences per week per person are retail media across a brand category.
It found retail media delivers an uplift multiple ahead of other mass paid media across various metrics such as knowledge (RM 2.5, non-RM 1.8) memory of a brand (RM 3.3, non-RM 1.5) and trust (RM 2.5, non-RM 1.6). For awareness, retail media is driving an impressive 3.6 times improvement.
The strength of the findings provides the sector with ammunition to argue that yes, it is a true cross-funnel medium.
So, what are the implications for brands and agency planners?
First, there is still a significant amount of education needed around the capabilities of retail media today. In some businesses, there still exists a notion that retail media is simply on-site search – this is far from the truth & is a hugely outdated view. Retail media is any media owned or operated by a retailer, or that uses retailer data in its activation. Under this definition, retail media is anything from activity in a store, on a website, via addressable TV or DOOH.
Secondly, it’s worth noting the context. A huge amount of energy and money is being focussed now on enhancing and digitising in-store environments (where the vast majority of UK and US sales occur) to enable retail media networks to utilise sales and loyalty data and critically to create a closed loop, integrating store and online commerce into a single media operation that drives performance and profit.
Retail Media Networks are beginning to form clear, differentiated propositions around audience and delivery characteristics. Hard work is being done at a national level to create measurement standardisation, and access to retail media estates is being streamlined.
It’s also important to remember the potential integration of retail with other media. Amazon and Walmart have committed to unifying their estates with TV, and UK players are experimenting with broadcast partners. Mixing OOH into retail media campaigns is standard practice. In this era of retail media, where a connected campaign can be activated across a whole ecosystem of channels at a 121 customer-level, we need different and scalable measurement solutions that capture the full effects of campaigns – not just those at the bottom of the funnel.
Put all this together and we have a very strong case for planners to explore how brand building creative strategies for endemic and non-endemic brands can be enhanced through retail networks. And we also have a case for integrating mid and upper funnel measurement methodologies to ensure we’re not underreporting the total effects of campaigns.
This is the first wave of data in what we hope will be a series, exploring specific roles retail media can play across the funnel. More research is needed from a range of sources, and we need more dialogue about what this means for retail in the media mix.
For an early-stage media sector that has enjoyed the first flush of hype, the study provides hard evidence that retail media has strong foundations for growth.
Author
Katie Streeter Hurle is Chief Strategy Officer, SMG
Read More
You may also like
Register for Newsletter
Receive 3 newsletters per week
Gain access to all Top500 research
Personalise your experience on IR.net