Tesco has a major new media offering for advertisers: here’s what you need to know

Powering the strategy is a newly created ‘Media and Insight’ division of Dunnhumby, the retailer’s data analytics arm, which promises to help brands and their media agencies engage more effectively with Tesco's customers.

Underpinning the entire offering is Tesco Clubcard, which is now used in 80% of transactions by more than 20 million households in the UK. Tesco says this data can not only help marketers target ads across its vast media real estate but enable them to shape new products coming to market.

“As the UK grocery sector evolves, we want to ensure we provide a more relevant and personalized offer to meet our customers’ changing needs," says chief customer officer Alessandra Bellini.

"Our new platform will bring together the wealth of customer knowledge we have, with the insights from Dunnhumby, and use it in a way that helps our brands to be more efficient and targeted and ultimately to serve our customers better."

Here’s a breakdown of the offering.

Media

Tesco’s big pitch to brands is that it can rival some of the biggest media owners in the UK in terms of its reach. It claims that campaigns run via Tesco Media will be seen by up to 58% of the British population each week; that’s higher than Sky and equalling the reach of Channel 4 and Facebook. So it's launched ad products in five areas:

Website and App

Tesco’s online platforms record over 65m visits every month. New products to reach that audience include:

Onsite display advertising: it’s massively increased the inventory available on its grocery site with a variety of new display and banner ads options which can be bought programmatically by next year.

Relevant sponsored search: it’s been trialling this since earlier this year but has expanded the range of product and category searches that brands can sponsor.

In-store

Over 11 million shoppers visit Tesco stores each week.

Tesco Radio: It trialled in-store radio six months ago and introduced advertising for its own-brand items. It saw a 12% uplift in sales and is now expanding the trial with six external brands. It expects a full launch in April.

Scan as you shop: Over 50m transactions take place using its scan as you shop devices. So now it’s putting advertising inventory on them. Brands could run an ad when the device is in a particular location (i.e a Coke ad in the drinks aisle) or an ad could appear for a complementary product once an item is scanned (ie an ad for Dorritos dip if a bag of chips is scanned). Trials begin in select stores in January before a full roll out.

In-store digital display: It’s seen success in some stores with its in-store digital screens, particularly with beauty brands, and will be putting more in across its network in 2022. It will also have a team set up to help brands develop the right in-store content for these screens.

Facebook partnership

It already has partnerships with Sky, Google and Facebook allowing brands and media agencies to combine data sets for better targeting and measurement. It’s expanding the partnership with Facebook to launch ‘Facebook Self Serve’ allowing brands to add specific Tesco Clubcard audiences to their Ads Manager account.

Co-branded ATL ads

Tesco’s Food Love stories campaign has been running for nearly five years. It has experimented with promoting third party brands in some of the ‘Stories’ but plans to make that a more established advertising offer as well as accessible to smaller brands who might want to use the ‘Love Stories’ platform to target people in certain regions or specific audiences.

Tesco Real Food

Three million users now visit the Real Food website for recipe guides. It wants to offer more content partnerships as well as sponsored recipies, display, and video inventory to brands.

CRM

Open rates for Tesco emails are 50% while 87% of recipients open its direct mailings, such as the magazine and vouchers. It plans to expand the range of advertising on offer for these products.

Insight

As well as a host of new media opportunities, Tesco is also trying to work more with brands behind the scenes on product development, launch and measurement.

Category development: It's created a self-serve platform that will give brands access to insight on its 20 million Clubcard customers and profiles it's created using 1,000s of data points as well as access to three years of data on product sales, week by week, SKU by SKU. The aim to to give brands greater insight into the performance of products and the customers buying them.

Innovation: Tesco wants to better partner with brands to create, launch and measure new products at every stage of the development cycle. It will help them identify the new opportunities in the market, work on everything from ideation to development with real customers, as well as the launch and targetting of the product at the customers most likel to buy it.

Media measurement: Tesco talked up 'closed loop' measurement which is says will help brands pinpoint the sales uplift from individual campaigns. It's also offering real-time measurement analytics for its onsite and in-store ads.