Reaching the right audience in a fragmented media landscape with pressures on media spend and imminent cookie deprecation means marketers must find new ways to target Australians while respecting privacy changes.
With third-party data plummeting as cookies crumble and the continuing evolution of our data-driven world; marketers are being held more accountable than ever for success and delivering results – not just with vanity metrics like clicks and engagement, but perpetually trying to understand how these convert into sales.
While the true value of first-party data is commensurate with its coverage, depth and recency creating huge opportunities in technical and creative innovation and to learn about your customers and save their shopping cart; have you considered using your own inventory as retail media? Impending data deprecation rules will impact customer targeting, but the new digital marketplace empowers you to up your data arsenal. And marketers are flocking to it.
Six-in-10 marketers say retail media is key to their strategy when third-party cookies are removed.
Australia’s retail media market is expected to reach $1bn by 2025, and not only bring up to $1.2bn in ‘new’ advertising revenue over the next five years, but also provide the platforms with:
- Valid measurement of media effectiveness on sales.
- An incremental revenue stream.
- The ability to provide partner brands that partner with significant levels of data to access and hyper-personalise content – especially if you offer a loyalty program.
Research also reveals that nine-in-10 advertisers already use retail media advertising campaigns to increase sales, with more than half saying the top opportunity is getting access to first-party data. Australian retail media participation is led by brands in FMCG (53 per cent), retail (49 per cent), health and beauty (38 per cent), and alcoholic beverages (30 per cent). In fact, as major e-commerce players and local retailers develop media offerings to bring further disruption to our fragmented media landscape, 31 per cent of Australian retail media network investment is already coming from new budgets, while the remaining 69 per cent is being reallocated from other budgets like digital advertising and trade retail.
Diversification is key to growth
With retail media ad formats ranging from in-store (including in-store music) to digital out-of-home, social, mobile, CTV and audio, the reach potential is significant. US retailer Walgreens reaches more than 97 million customers and patients across 20 different digital platforms alone, while food delivery service DoorDash’s self-serve ad solutions give brands more flexible options to drive incremental purchases through reaching more than 25 million monthly active customers across its US network of more than 75,000 convenience, grocery and retail stores at the point-of-sale. This saw DoorDash drive more than $3bn in incremental sales in the 12 months to June 2022, with over half of these ad-driven orders from new customers.
So, as cookies phase out, Australian retail media networks will command more of a migration of marketing spend, which will drive innovation, off-site demand-side platforms (for example, Cartology and YouTube) and the rise of the retailer app as the focal point of the omnichannel customer experience. We also expect a higher return of ad spend, and we have seen a material four times increase for verifiable audiences compared to traditional contextual or demographic targeting techniques, which will take online past its Covid ceiling.
Opening a world of new experiences
It’s near impossible to make the right decisions fast enough if you’re drowning in data insights. The benefit of retail media network platforms provides significant business intelligence and opportunities for you and your customers. First-party data from retailers drives an effective CPM, which essentially means that while you pay more, it works out more cheaply. For example, if your third-party data has a CPM of $2 and your first-party data has a CPM of $3, but the third-party reach is only accurately targeting half your key customers while your first party is reaching all of them, the real cost of using that third-party data is a CPM of $4. This is the hidden value of a retailer’s first-party audience.
But be aware that recent IAB Australia research reveals that while over half of online shoppers say they often read content produced by retailers (58 per cent), they are also somewhat or very concerned about a retailer’s use of data provided via their transactions (55 per cent) so ‘clear communication around the data value exchange to make shoppers more comfortable to provide their data’ is critical. But given it is collected with the consumer’s consent, retail media network data is privacy-first and can be deeply personalised providing a very effective advertising platform for marketers in new post-cookie world.
This article was written by Circana and originally appeared in the October issue of National Liquor News.