Why buyers are failing to see retail media’s bigger picture

Opinion

Focussing mostly on sales could mean advertisers underestimate retail media’s true potential, which can work for both shopper and brand marketers.

Return on ad spend. Customer acquisition costs. Reach, engagement, and impressions.

When it comes to media measurement, there’s no shortage of ways for brands and agencies to track the impact of their investments.

So, when it comes to retail media, why is the focus still so squarely on sales?

Pushing on an open (shop) door

Let’s rewind a little. In recent years, a lot of the dialogue around retail media has focused firmly on the ecommerce side of things — and that’s entirely understandable.

As well as a global pandemic that kept people home, we’ve also seen a cost-of-living crisis that has prompted millions to seek out value wherever they can find it. Those factors have only helped to boost what was already a growing trend towards online shopping.

Naturally, advertisers tend to go where their audience is, which has led many brands to start exploring the opportunities presented by digital retail media channels.

Perhaps inevitably, though, that has also led to much of the retail media spotlight being focused on sales. If you can track the path from ad click to basket add, after all, why wouldn’t you?

For the avoidance of any doubt, I should point out that this kind of closed-loop measurement is one of the very best things about retail media.

It’s a scintillating way for brands to measure the effectiveness of their media campaigns, proving Return on Adspend (ROAS) in a way that very few advertising mediums can.

But it’s more than a ‘final nudge’

At the same time, though, I do believe that the current obsession with retail media’s impact on sales ultimately serves to downplay its true potential.

Don’t get me wrong: conversion is an essential metric, and it’s one that any marketer should have in their minds when thinking about the ultimate success of an initiative.

At the same time, suggesting that the end purchase is the only thing that matters is to downplay the vital work that goes on across the rest of the marketing funnel.

We all know that there’s much more to convincing someone to buy something than just giving them the final nudge.

This is particularly true in grocery, where the opportunities to engage and influence tend to be that much broader. That applies to the combined physical and digital presence that most grocery retailers have, but it’s also relevant when we think about the sheer range of creative opportunities that exist in the grocery space. Here, brands can tap into everything from content marketing partnerships through to sponsored digital recommendations.

While the implications of that diversity lead in to everything from reach through to the best tactics to use, they also speak to a much larger question — and that’s how brands should define the nature of success when it comes to retail media.

Measuring beyond the sale

Today, retail media is a truly full-funnel opportunity.

I say that not just from the perspective of the various channels that advertisers now have access to, but in respect of the data-driven insights that can help them find more of the right shoppers at each stage of the funnel, too.

Naturally, my main frame of reference for that claim is the Tesco Media & Insight Platform itself. As discussed in other posts, the combined scale and science of the platform gives brands immense flexibility when it comes to audiences.

If they want to focus on the 77% of all UK households that shop at Tesco, they absolutely can. If they want to zero in on the 10,000 people who are most likely to respond to a money-off voucher, they can do that too.

Wherever their priorities lie, advertisers can then engage those different audiences using the wide variety of media formats that exist within the platform.

On the high-reach, awareness-centric side of things, for instance, we have channels like the tesco.com homepage, Connected Display screens, and in-store radio. When conversion is the focus, and the audience is better defined, tactics like Sponsored Products and coupons can work wonders.

Without dwelling too long on our own capabilities, my point here is that — with the right insights and the right channels at their disposal — advertisers can use retail media to drive awareness, consideration, and loyalty as well as sales.

While “retail media” might be a convenient catch-all term, the truth is that it’s not a singular proposition; it’s one that gives brands the ability to meet a variety of different objectives.

To me, that means two things specifically.

Firstly, there’s the fact that retail media should be of interest to a range of different marketing disciplines across brands and agencies alike; used effectively, it can be just as relevant for shopper and brand marketers as it is for those who focus solely on performance.

Secondly, it also means that we need much a more nuanced definition of success.

Context matters

As with any form of advertising, the only “right” way to evaluate the performance of a retail media initiative is within the context of the overarching objectives. If a campaign is designed to reward loyalty and encourage retention, for instance, then we can’t measure its impact in the same way that we would for one designed to drive sales. Those goals are fundamentally different (even if they are connected across the longer term).

One of the major advantages to an advanced retail media offering like the Tesco Media & Insight Platform is that it gives advertisers the opportunity to understand performance across multiple dimensions.

While that includes critical metrics like sales uplift and ROAS, it also enables deep insight into a media programme’s impact on things like reach, engagement, and customer behaviours.

What does that mean?

Simply, that brands and agencies can now define success in relation to what they were trying to achieve.

Rather than having to take a generic view of performance, or wrestling with metrics that give them only part of the answers they’re looking for, they can instead focus on measuring what really matters — whatever that happens to be.

Simon Lonsdale is strategy director at Dunnhumby.