By Ollie Turner, UK Commerce Lead, Wavemaker
If you speak to any marketers and/or brands about the possibilities and opportunities that retail media can deliver, there’s a consistent trend: excitement and eagerness but also hesitancy.
A hesitancy because there’s no one-size-fits-all approach to retail media, and given the razor sharp focus and interest, the industry is starting to feel the pressure to succeed in the medium. GroupM predicts retail media to be worth £7.6bn by 2026, and figures such as this, albeit daunting, show there’s a massive opportunity that cannot be ignored.
But it’s not just the value of the sector that is daunting; it’s keeping up with the pace of change. Retail media may not be new, but innovations are occurring in the market constantly. Consider the growth of self-service platforms in the UK, such as Dunnhumby Sphere, Nectar360, and Criteo Max. Having run more than 15 new off-site retail media campaigns with Nectar and Dunnhumby, it’s fair to say our team knows the value of these ‘self-serve’ platforms better than most.
Why are retailer-owned propositions so valuable? These platforms are some of the leading global players in providing brands access to their audiences and, through this retail media proposition, have developed systems that plug those audiences into off-site media channels and measure sales off the back of them.
For marketers and brands looking to capitalise on self-serve in retail media, these are some factors to be aware of:
It’s hard, complex and breaks ways of working
Through the agency lens, integrating multiple ecosystems from each retailer into an agency is hard. The team requires new skills, language and knowledge. This stands for those specialising in commerce and wider client, communications and strategy teams. All stakeholders must understand retail media’s value and how it can be integrated into a media plan.
Brands aren’t immune, either – it can really challenge the brand team’s way of working. For example, does retail media sit with a shopper, brand, or digital commerce team? Moreover, if it sits with multiple teams, what processes are in place to ensure each campaign is complementary to the overall brand objective? Simply put, if the brand team is after awareness, the shopper team after consideration, and digital commerce after a return on ad spend (ROAS), how do all these people, who are also working with different agencies and retail media teams, complement rather than clash with each other?
In other words, what’s to prevent shopper and digital commerce briefing in two ITVX campaigns using Dunnhumby audiences if they work with different agencies? Ultimately, agencies play a key part in agnostically connecting different briefs, but they require full cooperation from the brand. Without this symbiotic relationship, the foundations quickly begin to crumble.
Budget is a blocker to unlocking innovation
Due to these challenges with brands and agencies, budget can be the biggest blocker to retail media achieving its full potential. By plugging itself into offsite channels like Meta, ITVX and Display, retail media’s P&L responsibility is unclear.
Unfortunately, there isn’t a quick fix and no one in the industry is clear on the answer yet. But from our perspective, the best way to approach this is to get all stakeholders around the table with the retailer to align on the number one priority for the brand. Aligning on the brand’s ‘North Star’ is the easiest way to start conversations about retail media. Then suddenly, the budget starts to become available.
Once brands do it, they really want to scale it because it works…
All the campaigns we have run across Dunnhumby, Nectar360 and Criteo Max have exceeded the category benchmarks, and they have generated a significant ROI and numbers of incremental customers for Wavemaker’s CPG clients.
This success can be attributed to a few factors: audience planning, selecting the right media channel, having a bespoke creative direction, and a team of expert activators who optimise budgets. This is pivotal because retail media campaigns will not be successful without a team that understands audience creation and activation.
… however, scaling has its own challenges
The first challenge lies in the fact that it is manual, and each campaign is nuanced. The more popularity, the harder it gets to scale. Retail media platforms are still manual and require many hours to set up and run campaigns effectively, as well as to optimise in flight and report on. Each offsite media channel has its own nuances to get retailer audiences, and each retailer platform has a different audience set-up entirely. Again, working with activation specialists is key as a team that can deal with those intricate challenges will avoid mistakes such as overspending or underperforming.
The second challenge is around creative specifications. Each channel has its own specs with specific guidance and we’ve found that, generally, CPGs cannot create the bespoke assets at the velocity required to keep up with the agency’s campaign creation pace.
Moreover, the gap widens further when addressable elements are introduced. To put things bluntly, things can get messy. Going back to that North Star approach and involving activation and creative teams from the get-go will allow for better planning. It will also mean that bumps in the road are ironed out easily instead of teams falling prone to those last-minute panics.
Retail media’s insight helps develop media strategies
Retail media enables us to see conversion and sales outside of retailers’ walled gardens – the silver bullet for every CPG. But taking advantage of the silver bullet needs a different strategy. One that considers how many customers we need to generate from media to reach a particular target and moves away from simply increasing penetration. This will be more effective for CPGs and make the conversation more strategic and long-term.
