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Hogarth Retail Media Agencies

How the top holding companies are battling it out over retail media

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By Sam Bradley, Journalist

November 17, 2023 | 14 min read

For our Deep Dive into The New Retail Landscape, we take a look at what the industry’s biggest players are doing in the retail media space and quiz analysts and agency bosses about what lies ahead.

Supermarket aisles showing colourful goods on shelves, with a trolley in the distance

Big agencies have been working to burnish their capabilities in retail media in recent years / Unsplash

Amid gloomy economic weather, retail media has provided encouragement to the media side of the ad business this year as a novel channel now maturing, which meets marketers’ desire for measurable, direct media that can bear the expectations of premium brands.

According to a study released last week by the World Federation of Advertisers and advisory firm Ebiquity, more new investment will be heading towards retail media than into any other channel in 2024. Their survey, which polled 92 top brand marketers collectively responsible for over $50bn in media spend, found that 25% expected to increase retail media spending by over 10%, and 35% expected investment to rise up to 10%.

And per research firm Kantar, from a survey of 900 marketers, 32% said they had allocated more budget to retail media this year – and 46% expected that to increase in 2024.

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A handful of brands will attempt to deal directly with retail media networks – which include traditional retailers fresh to the advertising business, such as Tesco or Carrefour – and digital marketplaces quick to the punch, such as Amazon.

But it’s the advertising holding companies that dominate media buying and planning into other channels that will hope to capture much of the investment flowing into this channel. Each has been working to market its expertise and capabilities in the area – but how do they shape up against each other?

One of the earliest movers in this area was Publicis Groupe. It acquired CitrusAd and Profitero in 2021 and 2022. That, combined with its now-established Epsilon business, has helped it surf the initial retail media wavea factor behind its positive growth in 2023, at the same time as rivals have struggled.

According to group boss Arthur Sadoun, retail media “is going to be a big part of our client spend in the future.”

Epsilon, CitrusAd and Profitero, he told investors during this quarter’s earnings call, have each become crucial to that effort. “Not only have we leveraged the technology that we bought four years ago, but we have added new bricks that allow us to continue to accelerate in growing segments like retail media,” he said. “Retail media will continue to help us outperform.”

Current state of play

According to senior Forrester analyst Nikhil Lai, Publicis is the early leader in this area. “They bought those two [CitrusAd and Profitero] at the right time; they established credibility and technical wherewithal in the space before any other holding company had been able to do,” he says. And it’s been able to bring solutions to market faster than competitors, too, allowing it to actually realize demand and get it on to the bottom line.

The aim of matching its French rival in this regard was one of the motivations behind Omnicom’s deal to acquire Flywheel, announced last month. And given the American group’s new taste for acquisitions, it might not be the last effort in that direction. “Omnicom is late to the game, but they have a ton of money to spend,” says Lai.

How might Publicis hope to build on that lead? A survey earlier this year conducted by Epsilon found that 37% of retailers now offer programmatic advertising options – suggesting the market has plenty of room to grow. The firm is working with retailers to bring more of them into the fold; in 2022, it struck an agreement with French supermarket Carrefour for a retail media joint venture in Europe and Latin America called Unlimitail. The latter, you may recall, is a territory already targeted for growth by Publicis’ creative agencies.

Alban Villani, chief executive officer for CitrusAd in Europe, the Middle East and Africa, tells The Drum that the sector is no longer limited to ‘endemic’ brands – that is, consumer brand names you’d usually see on supermarket shelves. That, added to expanding inventory supply, should fuel further investment into the category. “With the end of third-party cookies approaching, retailers’ customer data will hold the key to personalized customer targeting,” he adds. “Those retailers who can master the art of reliably identifying customers on the open internet, connecting with customers wherever they are and independent of which device they are using, will have the competitive edge.”

Japanese holding company Dentsu – which owns networks such as Dentsu X and Merkle – is also of interest in this area, says Lai, who describes its offer as a “close second” to Publicis’. He notes that Merkle and Dentsu have found success in serving both sides of the aisle, flogging retail media inventory through their media businesses while working to provide the necessary inventory among retailers that are already clients of its other services.

“Dentsu has focused on being a consultant – in some cases, a shadow IT team for retailers trying to stand up a media solution,” he says.

Turning retail media into a product

Dentsu’s retail media capabilities were previously split across its various agencies, including iProspect and Merkle. This year, it has created Dentsu Shop, an “integrated solution” that bundles up its commerce and retail media expertise from different agencies into a single commerce service. Damien Lemaitre, global commerce director of media at Dentsu, tells The Drum: “It’s really about offering an end-to-end holistic solution for our clients. The client doesn’t see if it’s coming from iProspect or Merkle – it’s coming to them from Dentsu Shop.”

He says it has seen success since it first began introducing the Shop proposition to new and current clients by helping solve two key areas of concern – navigating the already confusing retail media landscape and then providing the requisite infrastructure to exploit it in a cookieless era through Merkle.

Despite the rising investment into retail media, it’s not yet a favorite channel – Kantar’s survey ranked it ninth out of 23 potential channels – in part due to the myriad media options now available.

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Forrester’s Lai says that CMOs still have a number of questions about this emerging area. Those concern the number of networks that have already emerged (too many to deal with, say marketers), comparing performance across the ones they’re already using – and most of all, rationalizing investment in retail media to compare it correctly and intelligently with other channels, such as digital display, direct mail or broadcast.

“The industry is very fragmented by market or by region. There is no consistency,” says Lemaitre. To help clients effectively access Amazon’s retail media inventory, it’s training agency staff in partnership with the e-commerce platform. Meanwhile, adding new network inventory is a “priority,” particularly in the Americas and Europe; it’s also pursuing aggregator relationships – on both sides of the aisle, as Lai noted – with the aim of making things more straightforward.

“Dentsu is one of the largest companies working with retailers, we have about 250 national and global retailers in our portfolio. That makes us a very good partner with aggregators to discuss and then scale [retail media],” explains Lemaitre. By working with retailers and aggregators, Dentsu can offer a simpler retail media experience to advertisers.

Retail media investment has been strongest in the US, which is also where Epsilon and Merkle are based. Lemaitre estimates that Asia Pacific retailers are two years behind the curve in this area due to waiting longer to invest in their media businesses. “There is a lag within that space, making the go-to-market proposition harder. And the super apps, which have a very strong hold in China, Indonesia and Thailand – they are protecting their game,” he adds.

Despite a smaller retail media footprint to date, Havas is investing in the area. Pedro Ramos, head of e-commerce at Havas Media, says it’s been focusing on European markets. “In Poland, Allegro used to be the only retail marketplace. Now there are three or four.”

Like Dentsu, it has created a pooled solution across e-commerce and retail media, dubbed Havas Market, with around 500 specialists across 23 countries. Ramos says many of the projects it’s carried out to date have focused on providing software capabilities to retailers (a recent partnership with SaaS firm Mirakl aims to sharpen this expertise area), as well as media buying services to advertisers – via three product lines focusing on insights, forecasting and analytics.

“We’re opening the doors to 400 different marketplaces for the brands that work with us,” he adds. In the shorter term, Ramos says Havas has been moving to meet demand around Amazon. “To be honest, in the last year, it’s all been about Amazon,” he says. TikTok’s commerce platform is one area of alternative focus. “We’ve been working in the platform since May. Clients that already work with us on their social channels want to expand and they want to sell their products on TikTok.”

Connecting to wider business concerns

Havas’s ultimate aim, according to Ramos – one it shares with its competitors – is to effectively link retail media capabilities with wider commerce ones, whether that’s e-commerce customer experience work or the work of logistics and inventory (unsexy it might be, but it’s no good advertising a key product via a retail media network if you haven’t ordered enough stock).

As well as providing a simpler, more straightforward all-around commerce offering to clients – something we know they're concerned about – it makes the agency’s integrated offer more attractive. According to Samantha Bukowski, GroupM global head of commerce, the WPP media network’s retail offering covers retailers setting up their media businesses, but its “core“ focuses first on “advertisers looking to invest in retail media,“ and aims to connect it to its other commerce capabilities.

“Our commerce practice spans four key pillars — strategy, media activation, creative and data and technology — working as a connected unit to deliver business results for clients across all four points of sale: eRetail, physical retail, social commerce, and direct to consumer,“ she explains.

Though it hasn’t created a wrapper like Dentsu Shop or Havas Market, GroupM’s offer also pulls from multiple agencies – namely Wavemaker, EssenceMediacom and and Mindshare. “The continued fragmentation of commerce and digital media make it dangerously easy to allow silos to crop up in businesses, which is why our integrated structures are intentional in how they promote efficient, holistic business management without sacrificing the specificity of the knowledge we know our clients expect,“ says Bukwoski.

“Commerce, and more specifically retail media, requires deep specialist expertise rooted in an understanding of each retail ecosystem, the algorithms that power them, and the connected nature of sales, operations, trade, content, and advertising in the retail world. The unification of our commerce offering is our mechanism for fostering that specialism and is the unifying layer of which all of our commerce talent is a part.“

“Unique to retail media, relative to any other media as like you have to be commerce aware, you have to be inventory aware, when planning media,” says Lai. “[Agencies] are saying: let’s go from being PPC specialists to strategists. Let’s level up to your CFO’s problem. He’s trying to take market share growth from X to Y, so how do we put that into a media plan across Amazon and Walmart that actually hits that market share growth goal rather than just optimizing spend?”

Dentsu hopes that its acquisition of Tag earlier this year – and its ability to churn out vast amounts of creative assets – will help it achieve that goal.

While Lai says that British group WPP hasn’t been “as keenly focused on [retail media]… and they have less traction with their solutions,” it’s been pointing to its Hogarth production business for similar reasons. WPP’s creation of Everymile, an e-commerce management company, could also amplify its proposition as it ramps up.

This article was updated 17 November to include further information on GroupM.

Hogarth Retail Media Agencies

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