Shopping for retail media? Go through the lessons learned from search marketing first
“Data-driven thinkingis written by members of the media community and contains fresh insights into the digital revolution in media.
Today’s column is written by Bryan Wiener, CEO of Profitero.
Barely a major line item a year ago, retail media is the new black – catching the attention of brand marketers and enticing them to open their wallets in numbers unimaginable at this time last year.
Accelerator is doing more online shopping due to the pandemic. EMarketer saw nearly 40% year-over-year growth in e-commerce advertising in 2020, accounting for 12% of all digital ad spend. Additionally, nearly every major retailer has launched or announced the launch of an advertising solution, the most recent being Walgreens in December.
And brands integrating this new channel into their media mix can benefit from a boost by applying lessons learned from the early days of research. There are uncanny similarities to many growth inhibitors encountered in early-stage search marketing, albeit with a few new twists.
Two of the biggest challenges are ecosystem alignment and data connectivity. Solving both could give retail the opportunity to take search marketing to heights that Google can’t.
Ecosystem alignment: getting all stakeholders on the same page
Brands need to adopt a more effective retail media strategy to stand out on the crowded digital shelf, especially since e-commerce generally has a less attractive economy than brick-and-mortar for brands (one item for one other day).
Yet for too many brands, maximum effectiveness is impossible because traditional buyer and consumer marketing is siled, with separate agencies, analytics and chief experience officer oversight for the e-commerce and marketing teams. media. This structure does not work in the era of e-commerce where the boundaries between consumer and buyer have blurred.
Established brands are already taking a hard look at organizational structure realigning teams to better connect the dots between sales and marketing. However, to be successful, budgets and service providers must also be fluid across channels and managed by stakeholders who have the expertise to execute superbly in each channel.
This dynamic is played out in real time between full-service advertising agencies and specialized agencies. When search and social media began to gain momentum more than a decade ago, the agency Dentsu 360i, of which I was CEO or president for 14 years, was first able to compete with agencies full-service, then, to avoid trivialization, fully integrating.
I expect the same dynamic to play out in e-commerce.
Each brand should weigh the cost of simplification against the benefits of specialization. Brands should consider the importance of e-commerce to their business, the size of their e-commerce budgets relative to other media, and conduct an assessment of their current agency’s capabilities versus specialized offerings.
Data Connectivity: Product and Advertising Analytics Integration
Retail media is much more complex than research. This requires buyers to understand the dynamic changes and interconnected relationship between the supply chain, competitive pricing, and consumer ratings and reviews that drive organic conversions and impressions. All of these levers go well beyond making a brand visible.
And the real-time nature of all of these measurements is a key consideration. Too often, media buyers making minute-to-minute retail media decisions don’t have all the information at their fingertips to make optimal decisions.
When search was less mature, brands optimized keywords based on historical data rather than looking at how real-time analytics could expand the addressable market to drive profitable revenue. This has created opportunities for smarter, more scrappy brands. Take for example Red Roof Inn, an early 360i customer. Even with a lower budget than its competitors, it has delivered huge performance gains by using flight tracking data to automatically adjust creative and bidding for mobile search in areas where flights have been canceled or seriously delayed.
In-stock pricing represents the simplest example of how real-time analytics can combine with retail advertising strategy to improve campaign performance. Spending advertising dollars on out-of-stock products creates damage beyond the lost sale. Brands lose, on average, 42% of their online sales when stock levels fall to low levels (stock levels below 30%). It also takes several days for sales to fully recover after even a single day out of stock.
Going on the offensive, brands dramatically increase their return on investment by monitoring competitors’ availability rates and aggressively increasing bids and spending on out-of-stock products elsewhere, a strategy known as conquest. .
Finally, this real-time data must be constantly tested. Running analytics tests on the optimal relationship between SEO and SEM to drive ROI was a differentiator early on in research, but now it’s table stakes. The same phenomenon exists in retail media, which requires gathering and watching the right data in real time, then setting up test and control groups to deliver optimal volume and efficiency: two practices that are still far from the standard operating procedure today. .
At the end of the line
Complexity and fragmentation are the enemies of the weak, but present monstrous arbitrage opportunities for the best and brightest. The best way brands can position themselves to win? Align budgets; deploy advanced media buying strategies that leverage product and advertising analytics; and facilitate collaboration between internal and external service providers.