Four industry changes that have made Retail Media a ‘Brand Marketing must’

Retail Media and Shopper Marketing have long gone hand-in-hand, and for quite obvious reasons. If the ultimate objective of Shopper Marketing is to help a Customer make a decision in your product’s favour, there’s little better opportunity to do so than right when they’re deciding what to buy. Retail Media gives Shopper Marketers the ability to influence at an absolutely critical point in the grocery journey.

For Brand Marketers, the correlation between Retail Media and their own discipline has typically been a little less transparent. Useful though it may be for attracting shopper attention, Retail Media has long been perceived as less suited to the longer-term goals of brand building and perception shaping that Brand Marketers pursue.

As the CPG landscape continues to evolve though, we believe that there are now four key issues helping to create a stronger tie between Brand Marketing and Retail Media than ever before.

1. The siloes separating Shopper and Brand Marketing teams are crumbling, and data is the key

Part of the same organisation though they may be, Shopper and Brand Marketing teams don’t always work that closely together. Typically, they work with different objectives, different KPIs, and different datasets, and are naturally quite segregated as a result. Over the past few years, however, we’ve seen first-hand evidence that the barriers between those teams are beginning to fall – and Retail Media is an undoubted contributor to that.

Retail Media serves as an innate connector between Shopper and Brand Marketers. It provides them with a common dataset for audience targeting, common insights for understanding shoppers, and a common mechanism for campaign measurement.

This means that, while Shopper Marketing teams focus at the lower, more transactional end of the funnel, Brand Marketers can use the same information – and in some cases, the very same Retail Media platform – to identify and target shoppers much earlier in their journey. Both teams can now track a Customer all the way from awareness to intent to action, a powerful unification of a previously disconnected path.

2. Efficiency is becoming more important in the age of zero-based budgeting

Zero-based budgeting isn’t new. A growing number of CPGs have embraced the practice, with Brand Marketing budgets coming under specific scrutiny. As a result, hard-to-quantify activities like TV or cinema advertising can be particularly difficult to greenlight.

Of the many advantages that Retail Media offers, perhaps the most compelling in this environment is its direct link to both shoppers and sales. Retail Media enables brand marketers to reduce waste by augmenting their tried-and-true reach and frequency media plans with more efficient and better targeted Retail Media activations. More importantly, perhaps, Retail Media gives brand marketers the opportunity to understand the impact of their investments on sales, offering CMOs a handy tool with which to defend brand budgets.

Both Brand and Shopper Marketing teams also have much to gain from the other benefit on show here: insight.

In addition to driving performance, Retail Media gives Brand Marketers the opportunity to understand the levers underpinning their media performance. Who to target, who not to target, which channels to use, and what kind of creative to apply; Retail Media gives CPGs better insight into all of those factors. That can be hugely meaningful for Brand Marketers, particularly when they’re being asked to prove value before they’ve even made a move.

3. Increasingly sophisticated Retail Media offerings are helping Brand Marketers refine their tactics

Pre-digitalisation, Retail Media mainly took the form of in-store aisle fins and other physical assets such as magazines and coupons. While those tools haven’t disappeared, they have been supplemented with an ever-expanding range of placements and channels that have much greater relevance to Brand Marketing teams.

As alluded to above, Brand Marketers work much further up the sales “funnel” than their Shopper Marketing peers. In the digital age, that means using channels like Facebook to raise awareness of the Brand at huge scale. Ordinarily, that would rely on using the channel’s own targeting methodologies to reach out to potential Customers.

With the growing sophistication of Retail Media offerings, though, many Retailers now provide Brands with the ability to use the same loyalty and purchasing data they use for “onsite” targeting on other channels too. That means that Brand Marketers can use the same channels they’ve always used to generate awareness, just much more effectively.

Better data isn’t the only driver of change here, however. Many Retailers are also becoming increasingly innovative in the way that they approach advertising opportunities on their own websites, giving CPGs the ability to run better integrated, co-branded campaigns with high-impact ad formats – as well as sales-centric, transactional ads. That presents a clear opportunity to Brand Marketers.

4. Self-service Retail Media platforms are changing the dynamic for Brands and Agencies

Very often, Brand Marketing teams enlist the support of advertising Agencies. Traditionally, that has precluded those teams from investing budget into Retail Media. Why? Because for the longest time, Retail Media has been delivered solely through managed service offerings. For Agencies, who rightly like to consult on everything from data to inventory, managed services essentially strip away the levels of granularity and control that they’re used to.

As might be expected, technology is the major driver for change here. With a growing number of Retailers now offering self-service Retail Media offerings, Brands and Agencies have the ability to see for themselves what opportunities those platforms present. Self-service offerings essentially allow Brand Marketers to lift the hood on Retail Media, peer deep into the engine compartment, and tune things however they see fit.

We’re not there yet, of course. There’s still some way to go before Retail Media is the first port of call for Brand Marketing budget holders – either in-house, or external. But as the number of self-service offerings continues to grow, those groups will at least have a better chance to see what Retail Media can do when employed as a Brand-centric tool.

Spending on Retail Media has been projected to reach £2.4bn in the UK alone by 2024[1]. As this stratospheric growth continues, there can be little doubt that much of it will be being driven by Brand Marketers. As they become more informed about the benefits that Retail Media can deliver, and as Retailers and technology providers increase the scale and sophistication of their offerings, Brand Marketers are finding themselves better equipped than ever to capitalise on that gigantic latent potential.

[1] Who’s really driving the increase in retail media? – The Drum, 26^th April 2021