Marketing leads at Pepsi and P&G share priorities for building retail media strategies

As consumer privacy pressure ramps up, consumer-facing brands are increasingly turning toward major retailers including Walmart, Target and Lowe’s that have used their own first-party customer data to build out robust media networks. Using privacy-preserving technologies such as data clean rooms, retailers are able to share valuable first-party data with brand partners, which can then leverage this data to create and deploy highly-targeted campaigns.

As the retail media space grows more crowded and brands face higher hurdles to win over brand loyalty and dollars, here are three top priorities:

1. Tap into the intersection of digital and shopping in new ways

US consumers now spend an average of eight hours per day on digital devices. And it’s informing the ways they interact with brands and shop.

In the days of yore, shopping often began with a written list. Now it often starts with search or with social media. “90% of America is within 10 miles of a Walmart, but the most important Walmart store is actually in your pocket,” said Mic Zavarella, vice-president of marketing at PepsiCo.

Consumer-focused brands such as PepsiCo and Procter & Gamble (P&G) are homing in on this reality with new marketing strategies. In a major Super Bowl LVI push, PepsiCo kicked off a TikTok challenge that generated 8bn impressions and saw fans upload 2m of their own videos, drawing them into the conversation and driving incremental lift for the brand.

And as social media use and social selling continue to grow, PepsiCo isn’t looking back. Zavarella predicted that working more closely with social platforms through media networks will enable better performance measurement for marketers. “We’ve been thinking about these social media tools for years, but [the next step is] being able to work with them now in a real closed-loop measurement process where we’ll be able to not only target folks using the granularity of [consumer data from] Walmart, [but also] to measure the impact as a response,” he said. “It’s about driving growth and incrementality, but that kind of information also makes us better marketers.”

Meanwhile, P&G last year launched a major push across various touchpoints in an effort to boost social engagement and drive conversions. The corporate giant tapped Jackson State coach and former NFL star Deion Sanders to release a limited-edition Gillette razor; the star then joined branded livestreams where he told social media users just how much he loved using the product.

Both brands leveraged Walmart Connect, the retailer’s media network, to pull off the respective stunts. “[Reaching today’s consumers means] being relevant and being a part of the fabric of their lives ... [as we see a] convergence of content, commerce and communication,” said Jacques Hagopian, senior vice-president of North America marketing at P&G.

2. Prioritize effective uses of data

While marketers are drowning in data, more data doesn’t always equate to better marketing – and not all data is useful. As Zavarella put it: “We have more data than we’ve ever had in the past – but in a lot of ways that makes it even more difficult, because you’re talking about consumers with an expectation. They expect personalization; they expect you to remove friction from the purchase. It’s not just about having the data, but how you use the data.”

This is especially true in retail media, he said. He suggested that brand marketers leveraging retail media networks shouldn’t simply grab at whatever data they can, but rather dedicate more resources to “taking those insights and crafting them into meaningful strategies.”

At the same time, as consumer privacy concerns grow more pertinent – with lawmakers introducing increasingly stringent policies and tech titans including Apple and Google moving away from tracking-based advertising technologies – brand marketers are considering more careful data management and governance.

“There needs to be common [data] governance standards around third-party verification, performance and incrementality,” said P&G’s Hagopian. “It’s foundational for brand safety.”

3. Harness seasonal events and major cultural moments

As consumer brands look for more valuable ways to work with retail media partners, they’re discovering the value of tapping into short-lived moments in time – whether they be viral trends or seasonal moments like the holidays and back-to-school.

A strong retail media partner “can help amplify a moment” and equip brands with the knowledge they need to capitalize on a consumer trend or specific event, said Kara Rousseau, vice-president of marketing at Walmart Connect.

With the holidays rapidly approaching, it’s something on which the retailer’s merchandising and marketing partners are focused. “What a time to be in retail, with all the changes that we’ve been through,” said Todd Wetmore, a merchandising director at Walmart. He noted that it’s an especially valuable “opportunity to reset expectations,” since consumers are “going to be building new habits” this holiday season.

For one, many consumers will celebrate the holidays in more traditional, pre-pandemic kinds of ways – traveling and spending time with family and friends, which will undoubtedly inform their shopping decisions. At the same time, of course, a growing number of consumers are feeling financially pressed under rising economic strains. Consumer-facing brands have the responsibility and opportunity to assess the many ways that consumer sentiment and behavior are evolving in light of these and other trends.

Ultimately, forging relationships between consumer brands and retail media partners can be a complete victory, experts said. Equipped with valuable first-party retailer data, brands can more effectively reach their target audiences – while benefiting the retailer by directing consumers back to their stores to pick up branded products. At the same time, consumers receive messages that resonate with them – without compromising their data privacy.

For more, sign up for The Drum’s daily US newsletter here.