These are the 4 keys to future-proofing any retail media program
Retail media promises reach, relevance and privacy-safe targeting, and there are a few simple ways to ensure your retail media program is positioned for long-term growth, writes Microsoft Advertising’s Kya Sainsbury-Carter.
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Retail media is one of the fastest-growing digital advertising categories, with eMarketer predicting US retail media spend will hit $61.15bn in 2024. With this growth and resultant brand interest, retailers are expanding their sphere of influence, diversifying their revenue streams and helping brands reach new and valuable audiences.
Not all retailers who set out to build a retail media program are successful, so what does it take to stand out in the crowded marketplace and build a lasting retail media program?
Organizational readiness and C-level sponsorship
Retailers generally have big aspirations for retail media program growth, yet often need to work through the internal organizational structure required to address the complexities and trade-offs.
For example, the merchandising team is responsible for brands’ relationships, positioning and sales performance. Meanwhile, the retail media team is responsible for integrating advertising into the brand and consumer experience and selling high-performing advertising to brands, thus needing access to merchandising’s relationships.
In my experience, it can be challenging for all parties to perform their roles effectively when retail media has been ‘landed in the org’ as an initiative sponsored by a single executive (which is often the case). A more holistic organizational structure enables retail media growth alongside and in healthy balance with traditional merchandising goals.
Organizational readiness requires sponsorship at the C-level, a structure that aligns retail media and merchandising, and shared retail media objectives and success metrics across leaders. With CMO tenure averaging 40 months (the lowest level in more than a decade), standing up a leadership-sponsored program can be particularly challenging.
A dedicated partner or a small set of partners
Given the growth of retail media, there has been a proliferation of industry players focused on helping retailers monetize their data assets and inventory and supporting advertisers as they navigate this audience engagement opportunity, resulting in a complex partner landscape.
Building a high-performing and durable program takes a holistic approach with a dedicated partner or small set of partners with deep expertise in the retail media space, scaled technology and proven media sales capabilities.
This is easier said than done as early moving retailers leverage the partners and innovations that best suit their needs at the time. However, achieving a unified advertiser experience and delivering cross-channel performance can be difficult. Starting with a holistic plan and unifying legacy efforts is beneficial to program growth.
The right partner (or partners) – and I purposely say ‘partner’ and not ‘vendor’ – brings depth, tech expertise and value-added services that drive media sales momentum and create engaging consumer experiences.
Holistic, diverse inventory supply spanning onsite, offsite and in-store
Shopper behavior is no longer limited to an e-commerce site or brick-and-mortar store. Consumers seamlessly navigate across sites, stores and screens. For maximum targeting effectiveness, retailers must activate their first-party data across onsite, social, open web, in-store and growing channels like connected TV (CTV).
Connecting with shoppers where they are and how they engage requires combining offsite and onsite capabilities. Onsite represents the highly trafficked pages on a retailer’s site. While with offsite, retailers can leverage their data and help brands reach shoppers outside the retailers’ web properties, including on the open web and CTV.
Lastly, many retailers’ most important revenue source is still brick-and-mortar stores. In-store is an opportunity to extend retail media programs into physical stores, bridging traditional shopper marketing with the digital age and creating sticky shopper experiences and savings opportunities.
In totality, a retail media program that spans all inventory types provides the best audience reach and performance to participating brands, making it more likely that those brands and their agencies will prioritize the program.
Sophisticated advertising tech and rich data
In a recent IAB Europe and Microsoft study, the top barriers to investment in retail media by agencies and brands were integration with other adtech, lack of data and lack of technology. These findings suggest that retailers must focus on their tech and data offerings to enable growth.
Agencies, as facilitators in this ecosystem, want a simple solution that makes it easier for brands to reach audiences and execute campaigns. Where possible, retailers need to remove complexity and friction for brands.
One way to do this is through a holistic, omnichannel solution that enables advertising throughout the shopper journey, has a simple set-up, offers unified tracking and reporting, and leverages increasingly important retailer data for more targeting and customization, and richer measurement and attribution.
BJ’s Wholesale Club is leveraging our omnichannel SaaS platform to provide brand partners with opportunities to target their shopper base at every step of their journey with relevant onsite, offsite and in-store advertising. This tech stack offers audience targeting and an efficient and scalable experience for BJ’s and its brands, enabling it to unlock real-time sales and performance metrics and grow a successful program.
Retail media in 2023 and beyond
The growth forecasts for retail media are ambitious and exciting. A holistic approach with the right internal sponsorship and external partners, cross-channel inventory and advanced omnichannel technology enablement is vital to the success of both retailers and brands.
Kya Sainsbury-Carter is vice-president of global partner and retail media at Microsoft Advertising.