Three ways grocery retailers are making it easier for agencies to engage with retail media

For consumer packaged goods (CPG) brands, retail media provides an answer to some of their biggest challenges. From the shopper-level data they need to find the right audiences, to tracking marketing’s actual impact on sales, retail media provides a clear – and predictable – path to growth.

Many CPGs enlist the services of marketing and advertising agencies to handle their media campaigns, of course. From planning and ideation through to execution and measurement, agencies provide a range of invaluable services that reduce the burden on their clients’ in-house teams. But while retail media might hold huge potential for those clients, it hasn’t always been the highest priority for agencies themselves.

The reason for that is at least partly to do with the way that the industry has developed over the years. For a long time, many of the tools and applications needed to get a retail media campaign up and running have been offered primarily as managed services. As a result, agencies have needed to work through third-parties, limiting the extent to which they can control and add value to campaigns.

Over the past two or three years, however, a number of grocery companies have refreshed their approach to retail media. And whether directly or indirectly, many of the actions that they’ve taken have helped to create a more “agency-friendly” retail media environment.

Here are three of what I believe are the biggest contributors to that shift:

1. Retailers have invested in tech that gives agencies the functionality they need
2. Retailers are creating media opportunities that meet multiple agency goals
3. Retailers have begun forging partnerships to make their data more accessible

1. Retailers have invested in tech that gives agencies the functionality they need

   There’s a been a phenomenal rise in the amount of money being spent on retail media over the past couple of years. Brand marketers in EMEA increased their investment into retailer-owned inventory by more than 50% in 2021^[1], and figures from the IAB suggest that total spend on retail media will rise from €9bn in 2021 to around €29bn by 2026^[2].

   Coinciding with that influx of cash, many retailers have been making investments of their own. Over the past couple of years, we’ve seen a growing number of grocery retailers launch (or refresh) their own retail media platforms or networks – Walmart, Carrefour, Walgreens, and Tesco to name but a few.

   While some of these platforms use proprietary software, and others combine different products from third-party vendors, the most important thing for agencies is that they also tend to offer self-service capabilities. This is a genuine gamechanger in comparison to the old managed service model, enabling agencies to book and manage retail media activities in the same way that they would a Google or Facebook ad campaign.

    What’s more, by bringing multiple applications together in one place, agencies also have the ability to plan, book, execute, and measure the impact of their marketing initiatives via a single interface. That’s a huge win from an efficiency standpoint. 

2. Retailers are creating media opportunities that meet multiple agency goals

   Once upon a time – not too long ago, in fact – the tactics that brands could employ as part of a retail media campaign were relatively linear. Even online, where there are arguably more opportunities to interact with shoppers on a one-to-one basis, brands were largely limited to basic display ads like homepage banners.

   Now, though, things are changing – and fast. Many retailers have opened up their media inventory, providing brands with a much greater range of creative expression. Oftentimes these take the form of activities that are additive to the customer experience: highly relevant (and sponsored) product recommendations, for instance, or inspirational co-brand campaigns like Tesco’s Food Love Stories.

    For agencies, the important thing here is that this makes retail media relevant to a much broader set of marketers. Gone are the days in which only shopper marketing teams could find value in retail media, with brand and performance teams now equally likely to benefit.

   Added to this, agencies can now tie multiple campaign activities together at the same time; a co-brand campaign alongside personalised promotions, for instance. That enables marketing budgets to be pooled for greater all-round impact. 

3. Retailers have begun forging partnerships to make their data more accessible

   As well as enabling them to communicate with shoppers at the point of purchase, one of the major advantages to retail media is that it provides brands and agencies with shopper-level data. That’s important, not just because brand CRM databases tend to be 90% smaller than those owned by retailers^[3], but because 80% of the information that CPGs do hold remains unmined^[4].

   The data that retailers can provide is crucial in helping agencies find the right audiences to meet their clients’ objectives. Until recently, though, that data was largely “locked” to the retailer in question; if you wanted to use it, you had to do so through that retailer’s own channels and inventory.

   Now though, those insights are becoming more widely accessible. Walmart’s recent partnership with The Trade Desk allows agency advertisers to run targeted campaigns to the retailer’s customers on the open web. Kroger has built a similar relationship with TV provider Roku.

   That’s not all, though. Some retailers are also forging partnerships with data clean room providers, making their shopper data shareable and transformable – all in a safe, anonymous, and compliant way. Kroger is again an early mover here, its partnership with Snowflake (and others) making headlines late last year.

As retail media offerings continue to become more sophisticated, this trend of agency-friendly platforms will only gather pace. And with 2023 – and the eventual demise of third-party cookies – now looming, that can only be a good thing.

[1] Who’s really driving the increase in retail media? – The Drum, 26 April 2021
[2] European Retailers Are Thinking More Like Publishers as They Expand Media Offerings – Videoweek, 20 January 2022
[3] Maximizing the Value of Data for CPG Marketers – Boston Consulting Group, 27 August 2020
[4] Customer Data Analytics and Insights Key to Post-Pandemic CPG Success – Treasure, 27 August 2020