Retail media is making waves right now, particularly for those on the brand side of the ecosystem. Whether it’s the news that two-thirds of CPGs expect to increase their spending on retail media over the year ahead, or that it’s now seen as a key brand building tool, a great deal of momentum has gathered behind the discipline in the past few months alone.
As retail media grows increasingly important to CPG brands, the same becomes true of their agencies: the more that brands rely on retail media as a way of achieving their marketing goals, the more they need their media agencies to understand and engage with it. And as much as that means having a technical understanding of retail media’s many mechanisms, it also means having a good grasp on industry terminology.
It's with that in mind that we developed our Retail Media Glossary – a bite-sized guide to some of the most commonly used phrases and acronyms you’ll hear today. You can download a free copy of the Glossary here but, if you’re in a hurry, here’s a quick look at nine retail media terms that we think every agency team now needs to know.
1. Behavioural audiences (or, behavioural targeting)
What if you could communicate with an audience based not on their background – age or income, for instance – but on their real-life actions? That’s the principle on which behavioural audiences are built, substituting assumed generalities about demographics with real insight into prior conduct.
In grocery retail specifically, we tend to think about these audiences in terms of their purchasing behaviour. Key indicators here include which products they’ve bought before, whether they’ve stopped buying those items, and if they’ve switched to a competing brand instead. Behavioural audiences can be highly useful in helping brands and agencies meet specific marketing objectives.
2. Closed-loop measurement
Measurement is critical to all forms of media and advertising, not just in terms of proving how successful a campaign has been, but as a way of understanding how things can be improved and iterated upon as well.
With “traditional” forms of media, measurement is usually limited to high level metrics like reach and impressions. While these can be useful, particularly when tracking upper funnel objectives like Awareness and Consideration, they’re not all that helpful when it comes to lower funnel goals like Conversion. You might be able to infer that a campaign drove sales, but that element of doubt will always be there.
Closed-loop measurement changes that. One of the main benefits of retail media – both in-store and online – is that it’s possible to draw a direct link between the ads people see and the products they buy. Whether it’s coupons at the till or digital product recommendations, retail media closes the loop between exposure and action, taking campaign measurement to a whole new level.
3. Customer lifecycle objectives
Speaking of being able to hit specific goals, customer lifecycle objectives play a major role in helping to match the right audiences to the right need. Say you’ve just launched a new product, for instance, and need to improve recognition of the label. Or, imagine that you’re in a fiercely competitive category, and want to ensure that your customers don’t stray from your brand.
These marketing goals align directly with customer lifecycle objectives – Awareness and Loyalty in the instances above. By knowing what your objectives are, it becomes easier to find the right audiences to target, and which channels and tactics offer the best ways to engage with them.
4. Customer relevance scores
One of the major benefits of retail media is that it provides brands and agencies with a way to get their products in front of the right customers at the right time. Exactly who are the “right” customers, though? And how do we know? Customer relevance (or customer-product relevance) scores help to answer both of those questions.
Advanced data science allows for every product that a retailer sells to be cross-referenced against every one of their customers, using past behaviours to understand how likely someone is to buy a specific item in the future. That results in a relevance score – something that greatly improves ad targeting by allowing brands to focus only those people with the highest propensity to buy.
5. First-party data
Time for a few simple ones. First-party data is any information that comes directly from a retailer – usually in the form of EPOS or loyalty programme data. This data forms the foundation on which the modern retail media industry has been built. As we get closer to a post-cookies world – and the loss of a huge chunk of “third-party” data as a result – the importance of first-party data continues to grow.
A concept that is probably familiar within most agencies already, lookalike audiences are exactly what they sound like: audiences who share similar behaviours or characteristics to existing segments, but aren’t currently buying your products. Lookalike audiences are extremely useful from an acquisition perspective.
7. Long-loop data
When you hear to data referred to as “long-loop”, that essentially just means that it covers a prolonged period of time – typically 52 weeks in grocery retail. Long-loop data is invaluable from a planning perspective, because it enables you to understand and track shifts in behaviours and purchasing habits as part of a broader perspective. The Covid pandemic is a great example of the need for long-loop data.
8. Predictive audiences
What’s the risk that a shopper might stop buying your products and switch to a competitor? How likely is it that they might “trade up” and switch to a larger or premium version of one of your items? Would they be interested in trying out a new product, and what would prompt them to do that?
Just like behavioural audiences help us find more of the right shoppers based on their earlier actions, predictive audiences do the same based on the likelihood of their future actions. If data suggests that a group of customers are behaving like other “lapsers” have, for instance, it might be time to re-engage that audience through a promotion or offer.
9. ROSI or ROPO
Whether you call it ROSI (Research Online, Shop In-store) or ROPO (Research Online, Purchase Offline) typically comes down to a matter of preference – they both mean the same thing. Regardless of which you pick, however, it’s important to know that it’s increasingly common for shoppers to research products before buying in-store.
With ecommerce grocery sales having soared over the past few years, retailer-owned websites now reach a larger audience of shoppers than ever. In tandem with the continued evolution of media opportunities, that gives brands and agencies a greater opportunity than ever to communicate key information online and help customers make a better informed choice at the store.
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