Retail media — WTF are you? Do you know yet?
Opinion
Retail media seems to be the ‘new shiny channel’, but what really is it, what could it do for media planners, and how can we learn from mistakes made with programmatic?
I am writing this on the back of the excellent The Future of Brands event, where a couple of the talks honed in on “retail media”. The viewpoints and silver bullets, as pithy and quotable as they are, ironically created so much disparity for me, and raised more questions than answers.
Although I’d consider myself pretty knowledgeable on media and advertising, I came out of it, chatted to Editor and a fellow Future 100 member, and honestly asked, “What the f*** even is retail media?”
Hell, I’d better find out as I am working on an agency project to identify its strategic approach. Criteo cite retail media as “the third wave of digital”, say that 9/10 retailers claim commerce brands are “queueing” to use their properties. The biggest media buyer of all, GroupM, forecast 25% growth here in 2023, and even bodies such as WARC in its marketers toolkit predict global retail media investment reaching $121.9bn in 2023; tantamount to the 4th largest channel and up 10% year-on-year. Massive, basically!
How new is this, really?
We understand the elements of sponsored search, display and using data to capture browsers on sites, we therefore get a sense of clarity. But then you hear the terms shopper marketing or commerce media in the coffee queue between sessions, and it is clear conflation and confusion is everywhere.
There are multiple “definitions” and too many to cite. Though I notice it depends who is saying it. Networks speak of “Return on AdSpend” (ROAS). A data company all about “Audience”. Commercial bias aside, is it any wonder we’re confused? Retailers are now media companies. Media companies partner with data companies. Not a straightforward ecosystem.
But this term retail media is not new. It’s a word that has been co-opted by digital and ad-tech players. Though traditional retail has done this for years. They are all doing their thing and although not necessarily wrong, they are just wildly contrasting. So where do we go from here?
Let’s not do what we always do…. Jump straight in
Anytime a new “channel” or trend comes along, I always think the same, Maybe walk before we run. Look how as an industry we butchered programmatic. The channel had a branding problem, and only in the last few years has the PR and products (brand safety, contextual etc) improved. Programmatic was always a mechanic; a buying mechanism, but due to line item breakouts and network agency parlance it became a ‘channel’, real-time bidding (RTB).
We all know where rushing got us? RTB became a synonymous code word for fraud, bots, and viewability issues. Premature adoption = unintended consequences.
The point is, it became much maligned before it had a chance to thrive, and we don’t want history repeating itself. Industry strongmen denying grey areas for clarity and pitch cut-through. A clear “position” carved out without being open to evolution. But you can’t serve the food until it is cooked. I worry we’ve become so obsessed with short-term performance driven ROI imbuing any digital activation, we have neglected true advertising principles.
In an ideal world, retail media addresses its fundamental challenges in terms of relevancy (product/data), transparency, privacy, UX, technical integration and even measurement.
This is endemic of all digital media, sure, but can this be a call-to-arms to get things right, learn from the past and make retail media the best “wave” yet?
Beyond activation: beyond the last touch, please!
It seems we are zoning in on a ROAS loving dystopia as retail media is branded as a performance paradigm, and of course you have platforms with things like self-congratulatory “Amazon cost of sales” (ACoS). It feels very tactical right now, and to think of retail media as a glorified fulfilment line in its early stage feels dangerous.
The Media Leader’s own Ella Sagar wrote last month about retail media moving beyond activation, it shines a light on the key consideration – to view it more holistically on the media and indeed marketing plan. Especially something I made a note/scribble of myself; Ezekiel Taiwo of Deliveroo, who is working on their own retail monetisation capabilities, nailed how retail media needs to evolve, from ‘in basket to in market’. I like it.
Consideration of further data and audience sets makes sense, though my hope is more brand awareness activity could be deployed.
Mind the gap: what it could be vs how it is now
According to the IAB, (honing in on the best position btw) “retail media allows advertisers to reach consumers in an environment conducive to purchasing”. Full funnel/user journey marketing fundamental stuff right? Or for the pedants, consideration and conversion?
Still, this whole capture demand/performance schtick of retail media needs an untangle and quick.
Let me explain. Brands with more position on the digital shelf, from sponsored placements, through to display or special partnerships, will improve their share of voice with greater ‘shelf’ space. It ties to mental availability — a key brand awareness tenet.
Retailers can add higher revenue streams as brand advertising benefits prevail. Things like investment in user experience are key too; alignment of images, placements, load speeds, product description lengths etc.
The creative is cited as an expectation within retail media. Maybe it is. But your product feed image of a bottle of olive oil could probably work harder. Networks and advertisers must not treat this as a given.
The Affiliate space has a huge opportunity to finally come out of the shadows, and reposition a lot of their unsung work to show how it really is a driver of commerce.
I look at some retail media partnerships with mixed feelings too. Take Shopify with Criteo. Without doing the exact numbers and leaning on anecdotal experiences with small businesses, Shopify typically serve smaller shops with smaller ad budgets (hence ROAS obsessed); Criteo are about relevancy and retargeting and efficiency. A match made in heaven I imagine, but doesn’t help either commerce advertisers’ or players’ minds open up on the possibilities of retail media (or indeed media as a whole)!
There are some positive collabs though in the market to be emulated.
Amazon’s partnership with Pinterest for example. The easy-breezy visual search tool has linked up with Bezos’ behemoths to power brand discovery with relevancy whilst activating Amazon’s unrivalled purchase data. This feels less like a bolt-on activation and more considered earlier on the path to purchase.
The answer? To avoid the race to the bottom, plan retail media properly
In my first ever contribution here I warned of not confusing strategy with the self-serve platforms. This feels apt again given the array of media companies peddling their inventory. With more anxiety than ever on the amount of platforms, how can we unify planning?
Retail media should be defined more for what it is/does (much closer to the IAB’s goal of selling relevant audiences) than trying to earmark to any channel.
It should be a holistic term. a media activation that moves prospective buyers towards a commerce goal…
It needs cross-channel thinking and smart planning. Like any media brief too, because it is in the main across many media channels.
Whether you are selling a bottle of olive oil or life insurance through traditional channels, you should adopt sensible planning principles and view platforms and media with both the curious and the sceptical eye to understand true possibilities.
Amazon does things that outdoor ads can’t. Retailer websites capture demand, but are unlikely to offer the reach another fame-driving channel would achieve.
The boring answer is: it depends. Try adopting a guiding star of driving commerce, regardless of media objective and channel, (meanwhile retail media can develop its offerings); at least until we work out what it really is!
Simon Akers is a marketing consultant, media strategist, and founder of Archmon, a marketing consultancy for brands and agencies.