Boots Media Group: how retailers are maturing into media companies

Boots Media Group: how retailers are maturing into media companies

Boots Media Group (BMG) is part of a maturing trend of retailers becoming more like media companies, industry leaders have said.

BMG announced itself as a media agency offering its brand partners a scaled advertising platform across the Boots app, website and in-store as well as access to first-party data of its 17 million Advantage Card members to create larger and more targeted joint marketing campaigns.

The new scheme is being delivered by Threefold Agency, a specialist in retail partnership advertising.

Ollie Shayer, omni-media director for Boots UK & ROI, highlighted in BMG’s promotional material: “It is our ambition to deliver a true agency service- treating our suppliers as clients, and working collaboratively with them to harness the scale, reach, connectivity and brand equity of Boots in order to achieve high-performing campaigns that resonate with Boots customers.”

‘Massive ramifications’

WPP companies Ogilvy and MediaCom are Boots’ advertising and media agencies for their own brand.

Mudit Jaju, global head of e-commerce at WPP company Wavemaker told Mediatel News: “This isn’t a new trend in any way – we’ve seen it in some capacity for several years now, but what we’re seeing is that the solutions have become really scaled and turnkey.”

Jaju went on to explain that retailer media is now seamless with either self-serve solutions or third parties like Threefold Agency to help build their sales house where a few years ago it was a clunky and manual process.

He added: “All the retailers are seeing the massive success that Amazon has had with Amazon advertising, and are also looking to fix their ecommerce P&Ls.

“Being a pre-eminent retailer in the UK it has massive ramifications and impact. I would expect Boots to show up quickly on the media plans of several of their core suppliers, and follow what is now a well-trodden path.”

Jaju highlighted that whether BMG follows the Amazon model with “the trifecta of search-on site display-DSP” or offers a more high-spec integration in line with their ambition to be a lifestyle brand is something to look out for in future.

In recent years, major US retailers like Walmart, Target and Kroger have developed similar omnichannel advertising platforms connecting brands to millions of customers and insights.

Brands ‘slow to create a strategy’ around first-party data

Walmart Connect, Roundel and Kroger Precision Marketing are the media arms of these retailers respectively with each acquiring new partners and companies to add new brands and tools to their platforms; most notably Jet.com being acquired for $3.3bn in 2016 by Walmart Connect and most recently a DSP to buy and coordinate more digital ad space.

Jim Hawker, co-founder of brand performance agency Threepipe Reply, which has a specialist Amazon division call Emergent Retail, described BMG as having a “compelling proposition”.

He explained: “The retailer has a wealth of first party data and can serve a range of ad formats at the point of purchase. Many brands have been slow to understand and create a strategy around this, so it will be an area of growth over the coming years.”

Hawker added that brands can achieve a lot on retailer sites without as much spend or complication with third party cookies as optimising their own sites and this will also accelerate brands’ digital knowledge and strategic decisions choosing between building their own brand online or investing in third party retailers.

The death of the cookie is related to this trend, Hawker added, as brands can try to figure out a complex attribution solution outside of it or have the ability to target the consumer at the right time on a retailer site using their first-party data.

Game changer for suppliers

However, Jonathan Lewis-Jones, managing director of Publicis Commerce, told Mediatel News this trend is going to be accelerated as retailers “totally restructure” the way they work with partner brands.

“We’ll start to see retailers providing stronger shared services around non media services like analytics, emerchandising and reporting,” Lewis-Jones said.

“This will be a game changer for suppliers – who will ultimately be able to ‘trade’ with retailers – which is a far cry from the opaque trade deals of the past, that were really just seen as a cost of doing business.”

From the suppliers point of view, this new relationship “gets really interesting”, Lewis-Jones added , when they can target consumer on and off-site with a common identifier.

“[This means] brands will be able to seamlessly merge consumer and trade activity effectively around one consumer journey and one set of targets,” he said. “This then becomes the nirvana for brands that can finally integrated activity across marketing and sale functions which has been forever siloed.”

The agency behind the agency

Threefold Agency is one of three agencies forming part of Shopper Media Group (SMG), a leading company in connected commerce advertising.

It specialises in an in-house model where they embed teams in their client’s company to offer single point of contact end-to-end advertising service for supplier brands, in Boots’ case this would primarily be health and beauty brands.

Some of Threefold Agency’s other clients using this model include the Very Group, Coop, Deliveroo and Signet Jewellery.

Kate Birtwhistle, partnership development director at Threefold Agency said it has been working with Boots for the past 18 months on a consultancy basis and won the work earlier this year.

They have been setting up BMG over the last four months and Birtwhistle said of the partnership: “Boots joins us as a large retailer and the model is always the same. We establish an in-house agency and we operate as an extension of the retailer team to build campaigns for supplier brands.

“Essentially, we are delivering campaigns on behalf of the retailer. It is the best of both worlds.

“We are getting lots of interest from retailers on this, it’s a hot topic.”

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