By Gemma Carver, Chief Commerce Officer, mSix&Partners
Retail media has been heralded as the third wave of digital advertising. And this (relatively) new kid on the block is swimming against the tide during the cost-of-living crisis. It is the fastest growing area of UK commercial media this year with an expected growth of 25% in 2023 and is projected to reach £6.5 billion in revenue by 2027.
With 71% of shoppers starting their product search on a retailer site rather than on Google, this presents a huge business opportunity for media agencies and large retailers alike. Brands are seeking out our expertise to effectively navigate and utilise this fast-moving space – one where they can reach and connect with their customers throughout the buying journey. But that’s only possible if agencies revisit the way they work with clients.
A mindset shift
As retail media leaves an ever-growing footprint on a digital media landscape also made up of search and social, it is time we stopped treating it as a separate entity outside the rest of the media planning process. It needs to be at the heart of a brand’s comprehensive buying strategy, not an afterthought.
A fully integrated approach where retail media informs and interacts with other campaign elements will allow agencies to make the best use of data and insights, target the right audience for the client, and deliver better business outcomes.
Think beyond retail media data to define strategy
Data and insights start with gaining an understanding of the consumer needs, the channels, and touchpoints they interact with on their journey from awareness through to consideration and purchase.
As we know, there are many ways to gain this understanding, ranging from the old-fashioned approach of panel data and primary research through to more predictive methodologies like growth mining via channels such as search and social to understand and anticipate needs.
The trick though is to be able to translate the insights gleaned from these sources into media formats and messages that address that audience need at the right point in the funnel.
At mSix&Partners, we work with clients using this approach to inform the content and creative we deploy across retail media and beyond. Our goal is to make sure our retail media targeting meets consumers wherever they are on their journey, connecting needs with product at the right time in the right place.
Reaching the right audience
The introduction of data clean rooms has allowed marketers to safely combine first-party data with third-party data for more accurate consumer targeting and richer customer insights. For example, Amazon Marketing Cloud is a treasure trove of insight into on-platform consumer-behaviour and allows a level of targeting that is rivalled only by the major US retailers including Walmart and Kroger. As an agency, we have been able to identify overlap for both Programmatic and Paid search activity to understand the customer journey more, and therefore we are able to see where the gaps are in terms of coverage. It’s important to also understand what kind of background your target market is coming from, and AMC helps us see this to then adjust our messaging through ad copy and creative.
When we work with clients, we also encourage them to think holistically about how consumers search for products they want. Making sure your organic content is fully optimised for on-platform searches is key.
Leveraging on platform SEO and engaging, impactful creative to drive traffic to your products, then allows paid media retargeting at a later date. Indeed, according to WARC engaging content is second only to market and brand size in importance and Kantar estimates the most creative content drives 12x ROI and 4x profit
Business Outcomes
With 60% of clicks now going to the first three products in a search, the winners will be those who have a firm grip on key metrics such as glance views and dwell time and who understand what actions to take to translate those interactions into purchases and loyal customers. ROAS will remain an important metric but for established brands with finite budgets, the smart money is focussed on CAC to LTV ratio. That’s because by understanding the revenue you make over the lifetime of a customer and comparing it to cost of acquisition, you can make more strategic decisions about where and how to invest your retail media budgets. Clean rooms, where anonymised data can be combined are an important way of gaining a true cross channel CAC to LTV ratio.
Making it work
With all signs pointing to integrated planning, this means e-commerce teams need to become an integral part of media investment teams. They shouldn’t be brought in at the end to add the ‘cherry on top’. They should be an integral part of a team that is working towards one goal across the media touchpoints.
But how can you support this integration process and ensure you are maximising the potential results without overburdening your workforce? Leveraging machine learning and artificial intelligence to unlock greater efficiency and stay on top of rapidly evolving consumer behaviours is a good place to start.
But what does efficiency look like? At mSix we are using a whole range of AI enabled tools to do everything from optimising content to generating insights, copy, creative and brand and channel performance recommendations saving time and creating additional value for our clients across the retail media ecosystem.
A common goal
The rise of retail media has forced media agencies to rethink their approach to working with clients. Those that find a way to bring it into the fold alongside more traditional media planning will not only be able to maximise the benefits for their clients, but they’ll be also able to stay ahead of the curve when it comes to an element of the industry that shows no signs of slowing down.
