data

The rise and rise of retail media: how brands can leverage its power

Leave a Comment / Adtech, Data, Technology / By

Retail media first started to see signs of significant growth in 2016, and it only took five years to 2021 for the market to grow from $1bn to $30bn – less than half the time of social media and a third of the time of search to reach the same figures.

What drove this meteoric growth? There are four key factors that Econsultancy suggests created this opportunity for retail media:

  • Retailers facing mounting pressure to unearth new income streams and boost profit margins.
  • Brand leaders struggling to drive growth in fiercely competitive markets.
  • Brands needing to pivot their targeting approach with the crumbling of third-party cookies.
  • The evolution of online consumer behaviour impacting customer journeys and purchasing decisions.

Of course, retail media providers have benefited hugely from this revenue stream. However, it also provides opportunities for brands and agencies to effectively reach new and existing customers.

In this quick guide, we’ll cover what retail media is, its unique value proposition, best practices that brands and agencies can use to take advantage of this massive advertising channel, and examples of brands succeeding with retail media.

What is retail media?

Retail media is the ad space ecommerce retailers sell on their websites or apps to brands who want to influence buying decisions at the point of purchase. However, this can also apply to advertisements retailers place inside their physical stores.

According to Criteo, retail media “enables brands to boost their visibility on the digital shelf”, similar to an endcap or special in-aisle feature in a physical store.”

To manage this channel, retailers have created Retail Media Networks (RMNs), where they can manage their owned media promotional placements and third-party brand advertisements.

Although similar to PPC and Paid Search, the main difference with RMNs is where the ads appear (i.e. on a retailer’s site/app versus Google search results).

A unique value proposition for brands

According to the Skai State of Retail Media 2023, “96% of surveyed individuals confirmed that their retail media programs achieved desired brand impact.”

The primary benefit RMNs provide is access to the retailer’s first-party data for relevant and accurate targeting capabilities, which has gained significant importance with the coming demise of third-party cookies.

Another benefit is providing a brand-safe environment, giving brands the confidence that their ads won’t appear alongside misinformation, hate speech or other types of content they don’t want to associate with (a common downside of advertising in social walled gardens).

For agencies, retail media platforms create a streamlined media buying process to help track and manage campaigns across multiple retailers.

Key players in retail media

It’s no surprise that Amazon is currently dominating the market share of retail media globally, and in Europe specifically, it’s almost 640% ahead of its closest competitor, eBay.

In the US, Amazon is still at the top of the leader board as the most important RMN to marketers, but Walmart and Target are in close pursuit, with others such as Instacart, Kroger, Meijer, and Best Buy trailing behind.

In the UK, dominant RMNs include Tesco, which launched its RMN towards the end of 2021 and continually evolves its offering thanks to 21m Clubcard holders; and Sainsbury’s (powered by Nectar360), which boasts the UK’s largest coalition loyalty programme with over 20m members.

Retail media best practices for brands and agencies

While the benefits of including retail media in the marketing mix are clear, how can brands  leverage its power? 

Foster collaboration, not silos: Investing in retail media isn’t a one-department decision. It affects marketing, ecommerce, trade marketing, finance, and multiple key decision-makers within the business, particularly those developing brand strategies. To avoid missing critical information and conflicting interests, it’s best to create internal collaboration opportunities and data-sharing rather than operating in silos.

Invest in building expertise: Even if outsourcing advertising to agencies, it’s still best practice to develop internal expertise on retail media to provide overall strategy and better understand the impact of campaigns. Having internal data analysts and experience in performance marketing are great foundations for transitioning into a retail media strategy.

Be selective with RMN partners: Rather than relying on ‘spray and pray’, a better approach is to evaluate potential partners according to your most important criteria using a joint business planning strategy:

  • Does the retailer’s positioning and objectives align with the brand?
  • What are their strengths and weaknesses, and their short vs long-term goals?

Answering these questions can help narrow down potential RMN partners that would provide the best collaboration opportunities for the brand.

Identify the right metrics: Finally, when building a retail media strategy, it’s crucial to consider which KPIs should be tracked according to the brand’s goals. For example, if the goal of the campaign is to increase customer acquisition, brands can use the RMN to track product sales, sometimes even at the SKU level. However, if the goal is to increase brand awareness, the RMN should be able to report on the number of impressions the ads achieve.

If partnering with multiple RMNs, it’s important to understand there is no industry standard – each network will be working to its own methodology in terms of campaign execution and reporting. 

Brands doing it right: examples of retail media campaigns

There are a number of brands seeing overwhelming success with retail media. Here are just a few we’ve handpicked from Amazon case studies:

Solo Fresh Coffee

The Japanese coffee brand Solo Fresh Coffee saw a noticeable decline in product page visits, and their sales had seemingly peaked, so they reevaluated their strategy to focus on brand awareness. They hired Barriz, an Amazon Ads advanced partner, and using Amazon’s media planning suite and Amazon’s DSP, achieved their goals:

  • They increased the volume of the audience browsing Solo Fresh Coffee’s product detail pages by 209% YoY in January to March 2023.
  • Compared with sales goals, actual sales increased by 14.4%, while YoY sales went up 35%.

Jameson

The best-selling Irish whiskey in the world, Jameson wanted to drive awareness of its Black Barrel product and credentials during a key, yet fiercely competitive selling period in the alcoholic beverage industry: Christmas. 

Jameson developed full-funnel activation with Amazon Ads with an omnichannel measurement strategy (which included an offline sales study with Circana Lift). The results of their campaign were impressive:

  • Streaming TV ads delivered a 98% completion rate, exceeding the Amazon Ads internal benchmark.
  • The campaign also drove a strong ROI across offline and online sales, with a 31% uplift vs Circana benchmarks, while offline sales specifically saw an 81% uplift vs Circana benchmarks.

Milk-Bone

For dog lovers worldwide, Milk-Bone is a household brand of dog treats that cater to every dog’s age, dietary needs, and palate. What’s particularly interesting about this case study was the use of Alexa interactive audio ads to create a branded audio experience.

The success Milk-Bone found in this case study shows great promise for voice-activated devices and advertisements:

  • Amazon’s first-party insights showed a new-to-brand rate of 31% among customers who asked Alexa to add Milk-Bone products to their basket, outperforming the category benchmark rate by 1.4X.
  • The results from a campaign-specific brand lift from a third-party measurement vendor, Kantar, showed a 1.7X consideration lift due to the exposure from branded experiences with Alexa.
  • Over 11K users engaged with the More Dog branded experience, with almost 86% of sessions lasting more than 30 seconds.

Now is the time to diversify with retail media

Data shows the growth of retail media will not slow down anytime soon, especially in a world where brands must reevaluate their approach to reaching their target audience without third-party cookies. Adding a retail media strategy to the marketing mix can help this obstacle into an opportunity while reaching brand new audiences.
If you need help articulating your thoughts on retail media or digital marketing, we can help. Chat with us todayto learn more.

attention metrics

Tackling the attention deficit, one impression at a time

Adtech, Data / By

As up to 10,000 ads continue to flood our screens every day, the fight to gain real human attention has never been so rife. 

But as this figure rises – while attention spans remain the same – the chance of us seeing an ad inevitably diminishes. This results in what we call the attention deficit – something the ad industry is striving to overcome.  

But how do we begin to measure true attention, let alone improve it?

Combining viewability with attention

For years, the industry has focused on standardising metrics around viewability, i.e., how much of an ad is visible on screen and for how long. And this is still important. After all, you can’t engage with an ad if you can’t see it.

But the industry is beginning to recognise that ‘viewable’ does not equal ‘viewed’. In fact, as consumers, we ignore almost 35% of all programmatic display ads. And so it’s become clear that viewability metrics alone are not enough. They are more like ‘hygiene’ metrics rather than predictors of quality. And that’s why we need to bolster this campaign insight with attention data. 

Steps to leveraging attention

As Rob Hall, CEO at Playground xyz explains, there are generally four steps to leveraging attention.

First, you need solid research. This should be from your own campaign data, but also learnings from other brands who have tested the impact of different ad formats, content types, devices, channels or targeting strategies on attention metrics.

Second, once you’ve gathered this, you can use it to enhance your channel planning, by creating and scheduling campaigns that have the best chance of performing. 

Third comes the task of actually measuring attention, by tracking key attention metrics such as hover rate and touch rate on a mobile device, plus more traditional performance metrics such as CTR, bounce rate and conversion rate.

And finally, to have the best chance of engaging your audience in the long term, you need to be able to optimise in real time according to what’s working and what’s not. This kind of dynamic creative optimisation (DCO), focused on attention, will be a key driver of campaign performance over the coming years. 

Using data across TV, desktop, tablet and mobile, we can measure a whole range of attention metrics. But perhaps the most prevalent is Attention Time.

The new metric in town

Attention Time is important in any campaign because it measures how long a user is physically eyeballing the ad. Once you’ve measured this, you can then look at a host of other user activities, such as clicks, cursor position, touch rate, scroll rate and depth, audio on/off, volume etc. 

Measuring engagement with eye-tracking data

As Lumen Research’s MD Mike Follett suggests, eye tracking data, used at scale across different channels, shows that “when users do look at an ad, it tends to perform really well”.

There are a number of attention technology partners on the market including Lumen, Playground xyz, Amplified Intelligence and Adelaide, that can help marketers determine true engagement through two main types of eye-tracking measurement: proxy-based and gaze-based. 

When testing creative or context, gaze-based (or eye-gaze) metrics are generally thought to be a more accurate method than proxy-based metrics. This is because they demonstrate that a user has actually engaged with an ad. This data comes from vast opt-in panels of consumers allowing eye-tracking cameras to follow the path of their eyes across the screen as they consume the open web. 

By combining this with the other user activities above, you can get more granular with each impression, and optimise the ad creative or format more effectively.

Now is the time to tackle the deficit

When looking for an attention partner, be sure to ask them:

  • how they define attention (e.g. do they include all user actions?)
  • what kind of eye-tracking they use – gaze-based or proxy-based data, or (preferably) both
  • and how long they will apply optimisation to ensure the most accurate measurement

As the range of attention metrics grows, so too does the need for industry standardisation of these metrics. But for now, there’s no time to waste when it comes to experimenting and A/B testing with different creatives and formats. This way, you can get ahead of the curve before attention-first campaign strategies become mainstream, and make every impression count. 

If you need help sharing your thoughts on attention with the world, we’re here to help. Chat to us today to learn more.

This article was originally posted on Digilah (November 2023)

Welcome to the data party

Where’s the data party right now?

Leave a Comment / Adtech, Data, Technology / By

The difference between zero-, first-, second-, and third-party data

Data is incredibly valuable to marketers, agencies, and publishers, since it is used to power advertising models and generate revenue. And the amount of data we produce is accelerating. The global volume of data reached 64.2 zettabytes in 2020, and this is predicted to double by 2025.

However, privacy regulations, such as GDPR and CCPA, have made data an increasingly difficult resource to tap. In response, the online advertising industry has developed different classifications of data to help with the handling process. So, what do the terms zero-, first-, second-, and third-party data mean?

Four-party state

The ad tech industry uses four different classifications of data, depending on the degree of separation from the source of information.

Zero-party data

This relatively new term describes data which is willingly shared directly with the recipient, e.g., a customer who bought a sneaker submitting a survey to the brand. Arguably, this is a type of first-party data, the distinction being that it’s intentionally handed over rather than automatically collected.

Zero-party data also refers to edge computing ad solutions, where data is processed on-device rather than transmitted elsewhere online. This protects user privacy by minimising the data collected, while still allowing behavioural targeting and personalised ads, thereby circumventing legal restrictions on the amount of data allowed to be sent to the bidstream.

First-party data

Data which is gathered directly, for instance from customers, visitors, or social media followers. This includes information from email interactions and behaviours on a website or app. First-party data differs from second- or third-party data in that there is no intermediary between the supplier and the recipient of the information.

First-party data includes first-party cookies and advertising IDs which identify individual visitors, such as GAID, IDFA, and UID. Identity solutions use these IDs to track user behaviour while they interact with a website or app, in order to serve behavioural and contextual ads. However, targeted ads relying on first-party data alone can be sub-optimal, since their reach is limited to information from a single platform or site.

Second-party data

This refers to data collected from a partner who has in turn gathered it directly from visitors or customers. Although the data is supplied by another agent, the distinction made from its close third-party relative is that second-party data is sourced from a trusted partner, with whom there is a direct agreement on how the information is to be exchanged and used. The transaction takes place in a closed environment, such as a data cooperative, or a data “clean room” which provides the utmost security and privacy. Second-party data is usually used to periodically enrich first-party data to gain insights.

As with zero-party, there is some contention over the term ‘second-party data’, and the disagreement makes its definition a little woolly. In fact, when the Winterberry Group asked industry experts for the definition, responses ranged from “someone else’s first-party data”, to “there is no such thing”. After pinning down some specifics, the researchers proposed that any commercialisation or licensing of second-party data transforms its state into third-party. But this is by no means a hard-and-fast rule.

Third-party data

This pertains to any data received indirectly, via an intermediary agent who is not the original source. In ad tech, this data is usually gathered, aggregated, and packaged to be sold to companies to build advertising strategies.

Third-party data has historically been the most sought after in personalised advertising, allowing one-to-one retargeting of an online user. This can be achieved via cross-tracking cookies, where a user’s profile follows them online and is appended with data from each site they visit. Knowing so much about a user enables hyper-targeted ads to be served to them. However, third-party data now sees the most legal scrutiny due to the privacy implications of tracking users so closely across different sites, hence the phasing-out of third-party cookies.

So… where’s the party?

If all this has left you confused about the classification of data, you’re not alone. The rise of zero-party data, and the explosion of second-party data, are a result of initiatives by the industry to avoid falling foul of privacy regulations while retaining access to sources of data which make advertising models effective. In the age of big data, just make sure you know the legal requirements when handling it, so you can avoid having your party busted.

Image courtesy of Joshua Sortino

Subscribe to our newsletter

Don't miss out on updates from the llama.

Lexical / ̒leksikəl / adjective
relating to the words
of a language 

Contact us

General enquiries: hello@lexical-llama.com
Accounts enquiries: accounts@lexical-llama.com
+44 (0)7790 441796
Unit 4, Windmill Oast, Rolvenden, Cranbrook, Kent, TN17 4PF, UK

Llama / ̒la:mə / noun
a domesticated, woolly-haired
South-American camelid

© Lexical Llama 2024 / Privacy & Terms