The importance of traditional publishers in the purchasing funnel.
The story so far
No, this is not a story about funnel-web spiders. This is a story about publishers.
Once upon a time back in the late 90’s the internet woke up to the world of cookies, and as their relevance grew, so did the appetite for their information. Publishers, like everyone in marketing, lapped up the data. Insight could be harvested on a massive scale. Demographics, interests, engagement, shopping habits, spend, and even incomplete shopping basket data were all brought together into a pangea of information. Ads were ever more targeted to users and more revenue was driven through data centric intermediaries. All was well in the world. Agencies wanted more data, as did publishers. The purchasing funnel was, and remains mesmerisingly understood by all.
But as time went on, users got wise and privacy laws tightened. Cookies got blocked. Ads got blocked. Publishers, reliant on the ad revenue driven by the open market, were losing revenue. Big data became a Big Brother like problem. The cookie started to crumble ( excuse the overuse of the phrase).
So what’s all the fuss about Retail Media?
We are moving towards an environment with fewer cookies. This isn’t, however, an absence of data. In fact in an environment with less cookies, Retail Media is providing an obvious solution to the gap cookies are leaving behind. According to GroupM’s This Year Next Year report, retail media will grow 9.9% in 2023, and be worth $126bn in advertising revenue. It may also overtake TV ad spend by 2028. To put that in context, the global ad market is expected to grow by 5.9%. Digital media by 8.4%. Traditional digital publishers, who have been reliant on cookies and who have not benefited from a 1st party data strategy to rival Retail Media will be seeing more of their advertising spend migrating over to direct to consumer platforms. Why? Because of the data, the funnel and the economy. Huge data sources from the likes of Amazon, Nectar or Tesco Clubcard are going to provide advertisers with all they need to target consumers and boost transactions. Technology in payment, transactions and last mile platforms are going to be the place to be for those performance hungry CMO’s. So publishers, who are already drawing battle lines to take back control of their advertising inventory, are about to be moving troops to another front line. So why is this important?
Publishers and the funnel
A CMO’s average tenure in a job is two to four years. That is of course, because marketing is a very dynamic specialism, and strategies are in a constant state of flux and evolution. It is also because marketers are pressured to deliver results quickly, thriving on a positive percentage in the end of year report. It’s called Short Termism. If you have the tools at your disposal to shift the dial at the bottom of the purchasing funnel, you’d sure as hell use them. Hence the reason why money is leaking from traditional publishers to Retail Media. There are of course a multitude of benefits to investing ad spend in this way. It reduces the stages in the funnel. It is efficient and immensely effective, trackable, and your ROAS is as clear as the bright blue sky. There are also a multitude of problems with this, which is where publishers need to take note.
Things to consider.
The user experience on retail media sites, already frenetic with “buy me” messages will turn users off pretty quickly. This is called Ad Fatigue. The lean in or lean back, engaged experience of a crafted content site will be a more pleasant space in which to take note of an ad. This is Attention. Ads tracking a user round retail media giving them another two choices of sausage brands will be zoned out, and potentially blocked.
Context in a trusted environment will be lost in Retail Media. Travel ads near or in travel editorial written by travel editors or celebs, who you feel you know personally, will convert, maybe not immediately, but the ground gets laid. This is branding.
If a user is already in the Retail Media environment to buy something, they may already be committed to that environment and brand, so who is tapping into new considerations from outside sources at the top of the funnel? Are retail media ads preaching to the converted?
Last but by no means least, advertisers in a Retail Media environment may not get access to the data they need to measure the effectiveness of their ads. Publishers may be more free with sharing data in a post campaign analysis.
This always comes down to users and their experience, which includes considerations of sustainability. As consumers take control of their media environments, they will consider site speed, trust, environment and context when deciding to return to an experience. They may also consider whether the media is considered sustainable. Done effectively, it is my belief that with the right technology, retail adverts could just as easily coexist with brand advertising on publisher websites if the experience was positive. A cluttered environment, where ads don’t load, will not serve its purpose long term and the ROAS may diminish over time.
So publishers need to recognise the clear benefits of their rich environments, ensure that the testing is done, and the proof is shared and exploited. Agencies, once again, must concede that the easy path is not always the right one. Mail Metro Media’s work on attention, and the drive for data is a great step in the right direction, as is Immediate Media’s ability to draw on subscriber data and amazing contextual environments around their verticals. However individual efforts may not be enough. Context will be an evolving opportunity solved over time by tech, but the shift in spend is now. We, the industry, need to collectively ensure that the importance of publishers in our lives and their influence on us is secure, and recognise that short termism is exactly that for brands. Short term.