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Hard lessons in aligning the worlds of retail and media


By Nicole Kivel, Managing Director, Northern Europe, Criteo

One of the greatest myths surrounding retail media is that retailers are transforming into fully-fledged media owners. Retail media cannot detract or distract from their core business of retailing and so discrepancies persist between how retailers want to sell their inventory and how the media world is used to buying.

Each new retail media network is distinct from the other, not only in the scale and nature of its shopper audiences, but in its vision of how retail media should operate and support the core business. Across Europe, there are different focus areas dependent on the retailer that span from trade focused, to incremental marketing demand based on audience value, or a hybrid of both.

By contrast, the networks that succeed are embracing the fact that retail media has evolved far beyond a trade and shopper marketing play, to extend full funnel across multiple channels. There’s now far more to building a compelling media proposition than simply digitising end of aisle displays.

Reconciling new demand sources

Ultimately retail media has to emulate the whole journey of the consumer. Offsite and instore are essential components in influencing and guiding decisions, alongside sponsored products and display onsite. As retail media moves up the funnel, new demand sources like brand marketing and performance marketing need to be added to the mix.

The challenge is that with trade, shopper, brand and performance teams to work with, a large agency could be handling 30 plus channels just for that one brand, split across self-service and managed service networks. 

There’s a huge amount of work to plan, activate, track and drive the performance in this environment, without which persistent problems like duplicative reach and spend, format limitations, lost performance and competition with other channels will continue to impede results.

To mitigate some of these issues we’ve seen brands reshape internal teams, linking shopper teams and digital teams, and agencies have worked to link channel teams with different configurations. While these efforts go some way towards streamlining processes, problems can still arise working across retailers who lack common currencies, language and ways of doing business.

Unifying retail with the rest of advertising

Retail media must learn from search and social that success lies in how the media owners unify and integrate their ecosystem with the rest of the advertising ecosystem. Advertisers need familiar measurement to connect the dots and the data, ensuring the message of all channels trying to reach the same consumer tells a cohesive story. 

Significant steps forward have been made with the introduction of a set of measurement guidelines by the IAB. Alongside this, agencies are doing an awful lot around education, pushing retailers think beyond basic performance metrics like ROAS and embrace upper funnel KPIs like consideration, new-to-brand and market share shifts. Bringing some of the sensibilities of media into the retail space is fundamental to unlocking brand spend.

There’s still a long way to go before we reach a standardised model. There are lots of different ways of approaching it, but harmonising the go to market strategies from retailers will dial back the complexity significantly.

Knowing yourself as a retailer

In the end, standardisation should help advertisers connect with new and relevant shopper audiences they didn’t previously have access to. While larger networks, like Walmart or Target, are well placed to give advertisers a broad view of many audiences through the funnel, other specialist retailers play a vital role in reaching specific audiences. 

There are hundreds of retailers with a unique proposition to bring to market and more progress will be made as these players begin to recognise and lean into their distinct offer to brands. For instance, if a fashion retailer only thinks in terms of endemic clothing brands, they’re shutting off demand for potentially thousands of advertisers in adjacent verticals like travel who are looking to find new audiences.

Added to this Criteo’s ‘The Great Defrag’ report found 58% of brands and 51% of agencies around the world would like to see other commerce led verticals beyond retail – for example, airlines, hotels, and financial services – further monetise their digital footprints.

This broader activation of first-party data in new verticals is what differentiates the category of ‘commerce media’, an evolution from retail media. With brands and agencies already planning to spend more on the category, there is still room at the table. 45% of brands and agencies say they plan to meet 2024 objectives by looking for opportunities to invest in non-retail verticals that offer similar first-party data and closed-loop features to retail media.

Realising these opportunities relies on a rationalised approach across everything from the formats and ad-types made available, the sales channels and resources engaging with brands and agencies, through to the choice of KPIs for each execution. The key is for each retailer to take the time to understand who they are, what data they have and how they are taking it to market.

Nicole Kivel, Managing Director, Northern Europe, Criteo

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