Driving growth and ROI through Retail Media
Retail Media has rapidly emerged as a cornerstone of modern marketing strategy. With its potential to unlock new revenue streams, optimize media spend, and enhance brand equity, it’s no wonder that retailers and brands alike are investing heavily in this channel. Building on our previous explorations of Retail Media’s transformative impact on CPGs and the role of clean rooms, this article delves deeper into the practical applications of this dynamic space. Through insights from recent client projects and a conversation with Bas van Kesteren, Global Head of eCommerce at Sanofi Consumer Health Care, we’ll share actionable strategies for maximizing Retail Media’s potential.
Frontrunning brands already spend >30% of their marketing budget on Retail Media
Retail Media represents the third wave of digital advertising, following the waves of search and social media. This channel is projected to grow to $165 billion by 2027, making up 25% of total ad spend. It offers unparalleled targeting capabilities by leveraging first-party data from retailers, addressing the diminishing role of third-party cookies.
Embrace Retail Media along a multidimensional funnel
Today, on- and off-site Retail Media optimizes full and cross-funnel performance: awareness, consideration, conversion. This comprehensive approach allows brands to engage consumers at multiple touchpoints throughout their journey, increasing the chances of conversion at each stage. By using both on-site media (such as product listings and sponsored ads on retailer websites) and off-site media (such as display ads on third-party sites or store touchpoints), brands can create a seamless and consistent experience that drives engagement and sales.
Bas van Kesteren emphasized, "What's happening in this specific topic is that as Walmart and Tesco are embracing this, they are getting to a much more superior offer. Why? Because they don't just offer you the front end on a website. They also own all these stores. So they give you more touchpoints and they have superior data because you can track the full omnichannel conversion."
Integrating data from these various touchpoints allows for better personalization and targeting, which can significantly improve the effectiveness of campaigns. Brands need to move beyond traditional funnel thinking and adopt a more holistic view that captures the complexity of modern consumer behaviour.
Be aware: Retail Media is not just a media buy
When buying products, value-added services, and personalized experiences from a retailer, various incentives come into play that impact both the retailer and the consumer. Retailers leverage retail media as a significant revenue stream by monetizing first-party data and offering personalized marketing strategies. This approach not only boosts the retailer's income but also strengthens their customer relationships by tailoring promotions and advertisements to individual consumer preferences.
As Bas van Kesteren noted, "Retail Media is not just a media buy. Be aware that you're dealing with retailers, which adds layers of complexity and requires a holistic strategy," highlighting the importance of treating retailers differently from traditional media sellers and adopting a comprehensive approach to navigate the complexities of retail media effectively.
Additionally, retailers can direct advertising budgets towards their own customers, creating a dual advantage where they benefit from both product sales and ad revenues. This dynamic fosters a more engaged and loyal customer base, ultimately enhancing overall sales and brand loyalty.
Despite emerging aggregators, Brands need to manage an increasing number of (fragmented) retailer-owned Retail Media Networks
Despite emerging aggregators, brands need to manage an increasing number of fragmented retailer-owned Retail Media Networks. This fragmentation presents both challenges and opportunities. On one hand, it requires brands to navigate a complex landscape of different platforms, each with its own set of rules, data, and measurement standards. On the other hand, it provides access to highly targeted and valuable first-party data that can enhance the precision of advertising efforts.
Brands must also be prepared to invest in technology and talent that can support these efforts. This includes adopting advanced data analytics tools to make sense of the disparate data sets and employing skilled professionals who understand the intricacies of Retail Media. By doing so, brands can turn the challenge of fragmentation into a competitive advantage, leveraging the unique insights and capabilities of each platform to drive better outcomes.
Majority of the effort is on Organization (capabilities, Ways of working, governance)
To capture the full potential of Retail Media, 80% of the effort should focus on organization (capabilities, ways of working, governance), and 20% on technology. This highlights the importance of establishing clear goals, defining measurable KPIs, and ensuring that all team members are aligned towards these objectives. The key to success lies in fostering a collaborative environment where sales, marketing, and e-commerce teams work together seamlessly. Companies should focus on establishing clear objectives, defining what success looks like for their Retail Media campaigns, and ensuring these objectives are communicated across all teams.
Developing shared KPIs is crucial, creating metrics that can be used by both sales and marketing teams to measure the effectiveness of their efforts and drive alignment. Fostering collaboration by encouraging regular communication and collaboration between different departments ensures a unified approach to Retail Media. Additionally, investing in training equips teams with the necessary skills and knowledge to navigate the complexities of Retail Media effectively.
Bas van Kesteren emphasized, "Establishing cross-functional teams and dismantling silos between sales and marketing are key steps for success. Make sure cross-functional teams jointly look at metrics across the funnel, so not in isolation!"
Set up plan & team, Drive first results, Scale and extend value
To optimize Retail Media campaigns, a strategic balance between local insights and global best practices is essential. Local teams possess invaluable knowledge of consumer behaviours and preferences, enabling tailored strategies for maximum impact. Simultaneously, leveraging proven global methodologies ensures efficiency and scalability.
By combining these approaches, businesses can enhance brand performance, accelerate product innovation, and drive sustained growth. The most important thing is to get started at a local level, while involving global teams to ensure scalability. Effective execution requires a deep understanding of local markets, achieved through meticulous research to identify unique consumer characteristics. Global strategies should be adapted to align with these local nuances while preserving overall brand consistency. Empowering local teams with decision-making authority and fostering a collaborative environment where knowledge is shared across markets are crucial for long-term success.
Are you interested in creating more seamless experiences for your customers and unlocking the benefits of Retail Media? We can help!
Retail Media is a powerful tool that can transform digital advertising strategies. By understanding the "why," defining the "what," and adopting a new way of working, brands can harness the full potential of Retail Media. Building cross-functional teams and leveraging both local and global synergies are essential steps to optimize consumer journeys and drive growth. We've successfully implemented these strategies with our clients, so we know how to guide you through the process.
Ready to get started? Contact our experts Steven Koolen and Emile Röell now to explore opportunities for collaboration, and together, let's drive positive impact!
