This week with start in New Zealand or Aotearoa – the Te Reo (Māori-language) name for New Zealand.

The biggest name in Retail Media in New Zealand is Warehouse Group (TWG) – the largest retail group in the country – a multi-vertical retail group that consists of The Warehouse, Warehouse Stationery and Noel Leeming.

The Warehouse is ubiquitous in NZ and is a general value retailer very much like a Walmart. They sell grocery, clothing, electronics, toys, sports etc. It’s one of NZ’s loved brands and incredibly egalitarian – nearly every adult in NZ will visit a Warehouse store once a month.

Noel Leeming is the consumer electronics brand – similar to Curry’s or Best Buy. Warehouse Stationary is like an Office Max or Staples.

Over the last three years, TWG have invested heavily in Retail Media.  Born from what used to be termed, SMF, or Supplier Marketing Funds, it’s since been developed to be a full funnel, automated self-serve or managed service, offering, trading on or offsite and open to endemic and non-endemic brands alike. 

According to Alex Lawson, Head of Strategy & Media – Market Media, “From its inception Market Media has been built as a full funnel offering for endemic clients. The advertiser’s goal is always to sell more product and if to achieve that needed off site as well as TWG owned assets to drive that sale, then that was the right way to approach it. Market Media is not a sales house looking to maximise inventory sell through, we’re a marketing agency within a retailer that is looking for long term success for our suppliers – our campaigns are built with that goal in mind. “

The Market Media Advertiser Proposition
Market Media advertisers are able to access The Warehouse, Noel Leeming or Warehouse Stationery account on Meta and Google accounts to run paid advertising on them, both in a promoted post or for Google shopping. Clients can link specific products to those paid campaigns for full closed loop reporting. On the Trade Desk, clients are able to execute co-branded marketing or use The Warehouse Group’s first party data audiences to target.

When the team started to look for retail media tech partners, they noticed that the large, established platforms would not have given the level of development or feature creation that Market Media wanted. 

Most platforms were excellent at Sponsored Display or Sponsored Products but not interested in working with Market Media to expand the offering to offsite, instore screens or other functions that they wanted “We weren’t Walmart big, so they weren’t interested at that point!” Lawson quips. So, the business made the decision to partner with Zitcha to deliver the platform Market Media wanted, such as instore screen capabilities and the ability to create offsite activation through integrations with Meta, Google, Pinterest and The Trade Desk. 

Market Media leverages Meta’s Managed Partner Ads (MPA) API integration with Zitcha to use Meta’s Shopper Marketing Ads product. This is integrated with The Warehouse Group’s first-party proprietary audiences.

Market Media deliberately choose to operate as a marketing agency – a full managed service as well as self-serve. Transparency and accountability are key, according to Lawson, so clients get access to all their results and activity in a live dashboard available 24/7 via Zitcha.

Digital Instore Screen Project
The biggest project undertaken by Market Media is also one of the hottest areas of retail media: instore digital screens. General Manager of Market Media, Rory McDonald, says that the screens are one of the most significant transformation projects in the last year and describes the rationale behind the digital screens:

• Despite gains made during Covid and investment into ecommerce, distribution centres and marketplaces, TWG is a largely physical purchase business.
• The instore environment is powerful and was being underutilised.
• Bringing screens into that environment was a no brainer with supplier’s keen to activate campaigns at the point of purchase and the power of our audience capture.

McDonald says the team is very proud of the fact that they stood up a digital advertising screen network in The Warehouse and Noel Leeming stores of both freestanding panels and made their NLG TV Walls (the display TV units) into an advertising option. With both of these operating, Market Media have in excess of 3300 advertising panels to use across all stores.

The tech stack to make it all happen was Broadsign used as the instore CMS, which was fully integrated into Zitcha to enable self-service booking and creative management if desired. 

The Market Media team took a “crawl / walk / run” philosophy for the screen rollout. They released the screen network in phases, ensuring a smooth customer experience. Today, McDonald believes they are in the “walk” stage – but getting ready to run.

The most recent innovation is the enablement of programmatic buying on screens via The Trade Desk, Hivestack or Vistar, whichever the brand or agency wants to use. They will be testing a programme of screens on end caps to see how they work with other physical instore media and how they can operate non-category locations etc. 

The other transformation in the last 12 months for Market Media has been the sales team. The total team has grown 3x and investing into skilled media sales and planning resources, with an additional focus to target media agencies.

The Rise of Non-Endemic
Market Media work directly with existing Warehouse Group suppliers – also known as “endemic” clients – from a full funnel, sales goals perspective. However, the team has been able to build out new propositions in for advertisers who are “non-endemic” to the Warehouse Group as well as agency clients primarily interested in TWG owned assets.

McDonald points out that “Agencies are already buying off site advertising from Market Media, so we need to ensure that we’re able to interact and trade with them accordingly, as they need to trade. Programmatic capability in multiple areas, not just digital out of home, is an essential part of a future focused RMN and something we’re working hard to roll out. “

McDonald continues: “We know that to a non-endemic or agency client we are just another media channel, and we’re fighting for a share of the same budget that TV, digital, audio or OOH are.  We approach this with the view that we need to be as accountable, and open as those channels. This is why we didn’t just operate our instore programmatic with a single DSP, but three so that regardless of which DSP an agency used, our inventory was available there. It’s why it was critical for us to establish 3P verification on our screens, because that’s the industry standard.  Meeting the agencies where they need and removing friction wherever we can in the journey is crucial to our long-term success. “

The Future for Market Media
The team understands that they are now a media channel and need to act accordingly for non-endemic and agency business, whilst retaining the level of expertise and planning for The Warehouse Group endemic clients.

The future for RMN’s – and Market Media is an evolution to an established media channel within the mix, not something “off to the side” as Lawson puts it. 

The team is now playing on multiple fronts, each with specific needs and expectations to show growth and continued evolution. They believe that they cannot afford to only focus on one front or expect all clients and agencies to work with Market Media in a singular manner. 

Lawson believes that the future is bright for RMN’s, but only with continued evolution and flexibility: one size in this space most certainly does not fit all.

Retail MediaX returns as part of the Autumn Festival 2024.

Retail MediaX II: The Executive Brief gathers 40 like-minded retail leaders from across sectors, all looking to stay ahead of industry trends and analysis. Building on the momentum of our inaugural Retail MediaX event in June, this gathering offers a six-month update packed with fresh insights.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.

The post Retail Media Network Profile: New Zealand’s Market Media appeared first on InternetRetailing.

Amazon’s overall volume growth of 8.7% in the U.S. outpaced the retail market’s 2.6% growth, showcasing its continued market dominance.

Here are some stats from the Q2 results:

1. Amazon’s gross merchandise volume (GMV) grew by 8% year-over-year, fastest growing categories were Beauty & Personal Care and Home & Kitchen, while slower categories included Books and Video Games.
2. Amazon’s international volumes outpaced North America, driven by growth in existing markets and increased Prime membership penetration.
3. Amazon’s profitability is up significantly, with operating margins increasing by 230 basis points compared to 2Q23. 

From a Retail Media perspective, Amazon’s advertising sector saw a robust 20% year-over-year increase in Q2, reaching $12.8 billion for the quarter. 

The primary driver of this growth is Sponsored Products, which dominate marketers’ budgets on Amazon and continue to yield positive returns. Amazon exceeded the broader digital advertising market by 2.8%.

Advertisers allocated 6.8% of their total turnover to Amazon Advertising during the quarter, an increase on last year.  As Amazon continues to gain retail market share, advertisers are simply just spending more. As a results, both competition and cost is increasing. 

Despite digital advertising competitors growing faster than Amazon, the market expectation is to deliver $56B+ in advertising revenue this year, up 21% from 2023.

For comparison, in 2022, Amazon’s advertising revenue reached $37.8 billion. This marked a growth of 21% compared to the previous year, although it was a slower growth rate than the 45% experienced in 2021. 

Retail MediaX returns as part of the Autumn Festival 2024.

Retail MediaX II: The Executive Brief gathers 40 like-minded retail leaders from across sectors, all looking to stay ahead of industry trends and analysis. Building on the momentum of our inaugural Retail MediaX event in June, this gathering offers a six-month update packed with fresh insights.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.

The post Amazon’s Advertising business shows strong growth in Q2 2024 appeared first on InternetRetailing.

Its strength lies, however, in reach rather than longevity. Tesco brings its vast customer base along with 20mn Clubcard users to the platform and has attracted more than 450 of the UK’s leading brands. 

Dunnhumby brings the data analysis and handling chops that can leverage this database to target a massive audience with highly relevant brand ads at the point of choice. It also uses dunnhumby’s Sphere platform, allowing brands and agencies to book premium placements directly, as well as understanding real-time campaign performance at the touch of a button with in-flight sales reporting.

It works, too. While Tesco doesn’t publicly disclose specific revenue figures for TMI, considering Tesco’s overall revenue of £60bn in 2023 – and the growing importance of retail media – analysts estimate TMI’s advertising revenue to be in the hundreds of millions of pounds. This would make it one of the UK’s largest domestic retail media networks. It is also believed to deliver a ROAS of £6.60 on digital 
ad spend compared with £3.80 for other channels. 

In 2022, phase two of the network’s roll-out saw Tesco make some still innovative additions to TMI by partnering with a range of other media channel owners, including ITVX, Pinterest and The Trade Desk. This allows brands to reach Tesco customers via new channels, with precision and at scale. These are supported by partnerships with InfoSum and LiveRamp, enabling customers to be confident their data is securely offering more relevant advertising.

The company has expanded on-site opportunities for brands, with new sponsored placements on Tesco.com, updated app inventory, revitalised special offers pages and improved brand zones, giving CPG brands more options to stand out earlier in the customer journey and reduce friction.

The instore options have also been updated to be among the most sophisticated in the UK. This included, in 2023, a market-first in Scan As You Shop media placements and the return of online sampling. This comes alongside an ever-growing SmartScreen network and the continued roll-out 
of Tesco instore Connected Displays.

What it offers

Tesco Media and Insight uses Tesco’s vast pool of data and data science to offer:

• Targeted display advertising – Placement of banner ads across Tesco’s website and app, across all categories.

• Sponsored products – Prominent placement of specific products within search results and category pages.

• Data-driven targeting – Leverages Tesco’s Clubcard loyalty data to create highly targeted advertising campaigns. 

• Omnichannel marketing – Integrates online and in-store advertising for a seamless customer experience. Partnerships with ITVX, Pinterest and The Trade Desk allow brands to reach consumers through even more channels.

• Self-service – TMI offers brands and agencies self-service capabilities to run campaigns and to measure and analyse campaign data.

This profile is one of nine in the RetailX Retail Media 2024 report. It also looks at UK retailers such as Boots, Co-op, Walmart and Amazon Advertising.

Drawing on ConsumerX research, third party data and value-chain testimonials, the report explains the concept of retail media networks, their evolution, how to leverage them from any point within the value-chain and where they go next.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox.

The post KEY PLAYER PROFILE Tesco Media and Insight appeared first on InternetRetailing.

Partnering with Retail MediaX panel sponsor Epsilon, John Lewis follows Waitrose in offering brands the opportunity to maintain always-on campaigns, and adapt to seasonal trends and sales peaks such as Back to School and Black Friday.

In addition, thanks to real-time data and performance metrics, brands can measure the impact of their initiatives right down to the individual product level and search terms.

All ads will be carefully reviewed by John Lewis’ in-house team to make sure they are suitable, beneficial and relevant for customers. The leading retailer said this investment underscores its dedication to improving the customer experience by better connecting individuals with the brands they care about, at the right time in their purchase journey. 

Jemma Haley, retail media business & proposition strategy at John Lewis, said: “While retailers have long been advertising on their own websites, we want to improve the experience, and make it even easier for customers to connect with the brands and products that meet their needs. 

“As part of this, we’re providing brands with more targeted and relevant ways to connect with customers. Our shoppers are unique in terms of the ways they research, browse and buy, and we need to be ready to meet them in the moments they are ready to purchase or engage with a brand.”

Retail MediaX returns as part of the Autumn Festival 2024. Retail MediaX II: The Executive Brief gathers 40 like-minded retail leaders from across sectors, all looking to stay ahead of industry trends and analysis. Building on the momentum of our inaugural Retail MediaX event in June, this gathering offers a six-month update packed with fresh insights.

Featuring dynamic roundtables, engaging panels, and interactive working groups designed to provide actionable takeaways you can implement within your growing retail media team.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.

The post John Lewis launches new retail media capabilities appeared first on InternetRetailing.

Here are five challenges to the potential of Retail Media:

#1 Can retail media unlock new budgets?

According to BCG’s June 2024 Retail Media report, “How Retail Media Can Top the CMO Agenda”, brands have been relying on shopper marketing and trade budgets to fund retail media’s growth to date. They say that “brands are reluctant to turn to other funding sources without a step change in retail media and its results.”

What is required to unlock additional brand dollars? Given that brands like retail media networks because of their access to first-party data, some of BCGs recommendations should not come as a surprise:

• Share Data: BCG suggest that retailers “flip the script” on data and share data-driven insights with brands much more than today.
• More Insights: Retail Media Networks will need to offer advertisers more than today, for example, offering data and insights in a way that they have never received from the retailers’ merchandising departments.
• Expertise and Excellence in Media: Retail Media Networks are competing in the world of ‘media’ with behemoths such as Google, Meta and Amazon playing at the media ‘game’ for years. Media such as programmatic ad buying and real-time reporting will need to as good as anything else in the world of digital advertising.

#2 Can brand and retailers fix internal silos?

FMCG brands typically break down their teams and budgets into the follow ‘buckets’:

• Brand budgets to build and promote the brand – creating visibility to drive mental availability and consideration.
• Trade budgets to influence the performance of suppliers at retail.
• Shopper marketing budgets to impact shopper behaviour instore to generate purchase decisions.
• Digital marketing budgets to convince and convert on search, social, video, email and other digital channels.

Each of these teams operate separately from retail media teams. These silos create conflicts as all of these teams are working with exactly the same brands. 

Within the retailer, the challenge is not dissimilar. Retailers have trade marketing or “merch” teams and category teams who operate separately from account management and from the Retail Media teams.

The reality is that..

• Budgets sit in individual teams
• KPIs are associated with those teams
• Expertise sits in those teams
• Expertise is not exchangeable

Internally, getting teams to work together means changes in the ways of working. Cross-functional teams with the retailer and the advertisers are the way to go, but this change is not easy – making the execution of a cohesive brand strategy very challenging.

#3 Can measurement and metrics improve?

A familiar refrain for the last number of years about Retail Media Networks is the lack of measurement tools, complicating performance analysis of product listing ads on their websites. 

As Andrew Lipsman of Media, Ads and Com writes: “Retail media is moving up the funnel into streaming TV, instore retail media is rising and the impact of offline attribution data means that more measurement frameworks will need to be introduced. This will move the conversation away from just focusing on incrementality or conversion as being the most important measure.”

However, different marketing goals require varied metrics. Frederic Clement, Co-founder, Mimbi, believes that advertisers should embrace fragmentation: “To navigate effectively, brands should focus on core business objectives, streamline operational requirements, and leverage partners to connect data and buying. Consolidation and convergence will come, but getting back to fundamentals is the best path forward.”

The reality is that many of these complaints will be addressed as measurement standard have radically changed in just one year. The various IAB chapters around the world have released robust new standards for retail media for online, offsite and instore. The more these are adopted, the more the complaints should – in theory – go away.

However, this is bound to be continued for a long period. As the pace of technology changes, such as shoppable ads, means that measurement methods might need updating. 

And, can we really say that arguments about metrics, measurement and attribution have gone away for Google or Meta? 

#4 Can retailers invest more instore?

Retail Media Networks typically begin with onsite ads – also known as sponsored products or sponsored search. RMNs then expand to include both on-site and off-site advertising, often incorporating a third-party DSP and using social media channels. Off-site advertising is accelerated through various partnerships between RMNs and media companies. 

The next stop is to develop instore digital advertising. As Media, Ads and Commerce’s Lipman writes, “In-store retail media will emerge from digitising surfaces at the checkout aisle, endcaps, smart carts, and cooler doors”.

However, retailers will need to invest in their stores to capitalise on the in-store digital ad opportunities. Scaling will requires significant capital investment or new models from the screen suppliers that change the model from capex to opex, so retailers expenditure can be realistic.

Where will the money come from?  Do retailers have the money to kit out thousands of stores with 4+ screens of various shapes and size, with a custom CMS, and custom AdTech?  They might have, but this an amount of capex that no CFO will sign off.

The costs are huge. Time for the screen vendors to deliver new commercial models.

#5 How can brands choose from the proliferation of options?

Determining the most effective retail media network amidst the surge of new options can be challenging for marketers. Every time an advertiser adds a new retail media network, it adds complexity to an organisation. Some don’t have the bandwidth

IAB Europe insights director Marie-Clare Puffett says: “The explosive growth of retail media has created a scattered landscape. Brands waste valuable time analysing and normalising results across different platforms, hindering strategic planning and decision-making. More well-trodden channels like paid-search and social media at least “offer scale and consistency”.

Over the past few years, US brand Georgia-Pacific evaluated around 40 retail media networks, as it now spends more than 20% of its media budget on retail media networks. It conducted trials with more than 25, measuring across the CPMs of retail media networks versus national media networks, the capabilities on offer, data quality and incrementality measurement. Those factors helped Georgia-Pacific decide to concentrate 90% of its retail media budget on seven key networks, including Amazon Advertising, Walmart Connect, and Kroger Precision Marketing.

Indeed, the biggest challenge that Georgia-Pacific found was data quality. Its Digital Marketing Director pointed out that “the quality of the data was not the same across each network. Data transparency from the networks is key. They told you that they had 1st-party data, they weren’t always giving 1st-party data to activate against them. Some were layering in additional sources of data like third-party data in order to get the cost down.”

The lesson is that certain retailers still have work to do to convince marketers to spend money on them.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.

The post OPINION The state of retail media mid-2024: five challenges appeared first on InternetRetailing.

The Gopuff in-house ads platform is looking to stand out in the increasingly crowded food delivery retail media space through using AI and machine learning to not only better parse its customer data, but to also help automate ad rate bidding for brands looking to use the network.

According to its launch release, it will use AI and machine learning models across more than 1,000 real-time variables and 10 years of historical customer data. This sees the platform take into account each customer’s shopping behaviour, their previous purchases, the time of day and localised product popularity to surface the most relevant advertisement and product for that individual, in that moment — well, in under 50 milliseconds of that moment.

Since launching the platform, Gopuff has seen a 50% higher relevance score, helping drive a 25% increase in click-through-rates and a 24% increase in conversion. Plus, by taking a more focused approach, advertisers are seeing a 30% lower cost-per-click on average.

“At Gopuff, we believe everyone wins when we match the right advertiser to the right customer at the right time — it’s what makes ad placements feel like content,” says Daniel Folkman, SVP of Business at the company. “With the new Gopuff Ads Platform, brands can easily reach shoppers with the most relevant content to create authentic experiences and inspire customers to engage. We’re thrilled to offer advertisers greater access to the Gopuff platform and data with intelligent, new tools and look forward to continuing to drive innovation as the industry evolves.”

From login to live in five

According to Folkman, the platform brands and agencies full control over their advertising dollars and can seamlessly build, buy, manage, measure and assess their spend. Some of its key features as outlined on its site include:

• Objective-based buying: Gopuff’s new audience targeting solution was designed to deliver the best results based on a campaign’s objectives, whether an advertiser is looking to increase household penetration, drive loyalty through lapsed buyers, or convert new-to-brand customers. Gopuff’s platform provides relevant context and real-time data to help brands optimize their spend.
• Bid optimisation: With a new bid automation option, the Gopuff Ads Platform will automatically adjust a brand’s bids in real time, based on the potential for conversion. The platform increases bids for highly relevant shopping queries likely to convert to sales and decreases bids for less impactful placements, ensuring spending focuses on quality clicks and reducing overall costs.
• Robust and predictive audience targeting: Powered by in-house machine learning and AI, brands can easily segment and target audiences based on past purchase history, time of day, and geographic regions – as well as behavioural and contextual data. With just a few clicks, companies can target lapsed buyers, customers who are new-to-brand or brand loyalists. Plus, with Gopuff’s ‘Likely Buyer’ audience builder, brands can identify new-to-brand shoppers who behave like brand loyalists – an audience most likely to convert.
• Actionable insights: Easily view and analyse campaign performance across all audiences, regardless of campaign targeting. For example, a brand can analyse virtually any campaign to see if new-to-brand consumers are more likely to convert on single-serve SKUs or multiple packs. This innovative approach allows brands to use predictive analytics to maximize performance, glean useful and actionable insights, and optimize budget.
• Easy-to-use interface: A custom-built interface makes it more seamless than ever to view campaign performance at a glance, dive deeper to understand performance across audiences, or build a new campaign. The new tools and interface provide brands with an end-to-end view of the customer journey, making it easy to manage everything, from buying to reporting, all in one place.

In addition to these new capabilities for sponsored product ads, Gopuff provides partners with the ability to run ads across In-App Display, Off-Platform Audience Extension, Instant Sampling, Non-endemic advertising, and more. As Gopuff continues to innovate and redefine the future of commerce, streamlined reporting will also offer greater visibility into brand partners’ businesses across the Gopuff ecosystem. 

The post Gopuff latest food delivery firm to launch retail media network: would you like AI with that? appeared first on InternetRetailing.

The company has been working towards removing cookies that collect third-party data from web-users as part of a push towards more privacy – in a project knows as Privacy Sandbox. However, this week it has announced that it is shelving those plans after, it said, “considering the impact of the changes on publishers, advertisers and everyone involved in online advertising”.

Instead, Google has announced that it will ““introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time,” Anthony Chavez, vice president of Privacy Sandbox. “We’re discussing this new path with regulators and will engage with the industry as we roll this out.”

What does it mean for retail media?

While Google’s move comes as a surprise to some, it may well be a godsend to many. Most brands and advertisers have not been ready for the end of cookies. Research by UK-based customer data platform company Acxiom earlier this year found that 55% of those surveyed had yet to implement any solution to directly address the end of third party cookies. 

Colin Lewis believes that no-one in the industry is surprised by the move. Google has rarely stuck with timelines over  the years and has sunsetted lots of viable products without rhyme or reason

But, what does it mean for Retailers? “Many retailers might have believed that their first party data would be hugely valuable in a cookie free world. Now those views will have to be revisited,” says Lewis. “Many RMNs will now be asking themselves what price to change for their first party audiences – and, whatever the price and forecast revenues for those, how much should it be reduced.

“For agencies, they can still say to clients for the time being that Chrome users will provide excellent signals – something long since gone from Apple. For brands, time will tell whether they will shift budgets or not.”

First party data still rules

With brands and ad agencies looking for new ways to create personalised and hyper-targetted advertising reach, the death of cookies looked like a problem. Retail Media benefitted from that shift, with retailer first party data looking more valuable than ever to those brands and retail media properties such as websites and in-store media helped many retailers build big businesses. Has the U-tun on cookies brought that to a halt?

In short, no. First party data and the offering from retail media that allows for hyper-focussed advertising is still very powerful and the move towards retail media dominance is hard to stop. 

As Dimitrios Koromilas, Director of Platform Services, EMEA, at Acxiom, says: “Despite Google reversing the deprecation of third-party cookies, brands shouldn’t get complacent in what is an ever more competitive consumer landscape. Customers increasingly seek more meaningful personalised experiences from brands, something which can only really be achieved through having a first-party data strategy.

“Even with Google’s latest decision on cookies, first-party data remains the new currency across the enterprise, not just for the marketing department. Gathering information to create a holistic view of your customer base, which can only be done with first-party data, is pivotal in helping businesses stand out from an increasingly competitive crowd.”

What it does do is offer brands two ways to target their marketing: first party data leveraged through retail media and third-party cookie data to augment it. Perhaps together these offer brands an even better insight into consumers – at least those that don’t now turn cookies off at the browser – and helps marketing become even more focussed?

What happens next?

While the news in welcomed in some quarters, it begs more questions than it answers as to what happened next.

Given the lack of detailed information on the user choice functionality that Google proposes to introduce instead of deprecating third-party cookies, it is currently challenging to fully assess the implications of this announcement on the broader ecosystem.

However, IAB Europe emphasises the following key considerations that should be addressed in any alternative approach implemented in Chrome:

1. User controls in relation to the setting of cookies and processing of personal data for advertising purposes are already the object of industry-wide standards that draw on the detailed requirements laid down in the GDPR and ePrivacy Directive. These standards take account of the fact that browser-level user choices cannot enable the establishment of informed and specific consent under GDPR. It is unclear what value the addition of a supplementary choice layer, with the attendant risk of introducing a fragmented user experience, would deliver.
2. It would seem likely that such an approach would entail the same prejudice to publishers as Apple’s ATT, which is currently the object of antitrust scrutiny in several EU jurisdictions. The manner in which controls connected to the availability of third-party cookies will be presented to end-users and articulated with the existing controls already provided for the Privacy Sandbox APIs will be of particular importance to evaluate the impact on competition.

Finally, IAB says it would call on Google to ensure that the development is done in close collaboration with industry standard-setting organisations and takes good account of industry feedback, even as it continues to refine and improve the Sandbox tools. In this connection, it is relevant to acknowledge Google’s record of industry engagement on the Privacy Sandbox up to now, while being clear-eyed about the risks evoked above in relation to the alternative approach announced yesterday.

The post Google does u-turn on cookies: where does this leave retail media? appeared first on InternetRetailing.

Here are few reasons why this is significant:

1. Microsoft’s advertising ambitions: Microsoft has significantly ramped up its advertising efforts in recent years. In 2019, it acquired PromoteIQ, which had a few key clients but did not match the extensive reach of Criteo, which boasts over 200 retail media partners. This acquisition marked the beginning of Microsoft’s serious commitment to advertising.
2. Expanded reach and demand: The recent partnership announcement highlighted that Microsoft Advertising will integrate with Criteo’s network of 225 retailers, significantly expanding their digital footprint. With over 500,000 active advertiser clients, Microsoft brings a substantial increase in demand to Criteo’s platform.
3. Preferred onsite media partner: Microsoft Advertising plans to work with Criteo as its preferred onsite media partner, effectively replacing the legacy PromoteIQ technology. This transition will leverage Microsoft’s sales team to promote Criteo’s Sponsored Products, indicating a strategic alignment.
4. AI and cloud capabilities: Microsoft’s advancements in AI and cloud technology are a key advantage. Their AI-powered Retail Media Creative Studio helps advertisers create and optimize ad creatives at scale, using generative AI, showcasing their innovation in the advertising space.

Why is this interesting?

• Microsoft’s partner-first approach: Microsoft is renowned for its partner-centric business model, which contrasts with companies like Oracle, who have recently closed their ad network. This approach positions Microsoft well to capitalize on the growing retail media market.
• Retail media market growth: Retail media is rapidly expanding, now accounting for 16% of global advertising spend. This sector is relatively untapped by giants like Google and Meta, presenting a significant opportunity for Microsoft and Criteo.
• Competitive landscape: Amazon remains a key competitor with its established advertising networks and cloud services. However, Microsoft’s advancements and strategic partnerships could position them as a formidable contender in the retail media space.

Criteo’s retail media business reported $50mn revenue in Q1 2024, with a 20% year-over-year growth, although its performance business remains flat. 

Given Criteo’s history of acquisitions, such as Hooklogic, there is potential for strategic restructuring, including the possible sale of its performance business – leaving the business with the fast-growing retail media business, which would have a higher valuation than the performance business.

What conclusions can we draw?

The Microsoft-Criteo partnership is more than just another business deal; it’s a strategic move that could reshape the retail media landscape. Whether this partnership leads to an acquisition remains to be seen, but the signs suggest a deeper integration is on the horizon. 

As retail media continues to grow and evolve, this partnership positions Microsoft in particular to leverage their strengths and capture a larger market share in the advertising business.  

The final question is where this would leave the holding companies like WPP or Dentsu. Publicis snapped up Epsilon and Citrus over the years, and Criteo would help build out a digital commerce story. Would the holdcos be brave enough to acquire Criteo? Stranger things have happened.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.

Image:

MTSOfan via Flickr

The post OPINION Microsoft and Criteo: what does its partnership agreement mean? appeared first on InternetRetailing.

Ollerhead explains to Katie Streeter Hurle, chief strategy officer at SMG and InternetRetailing’s Paul Skeldon that the fashion etailer has been in this retail media space since 2007, thanks to its magazine.

“It was probably the biggest fashion magazine in the UK in terms of distribution size. It’s been quite a long retail media journey. Over the past years, that’s transformed from magazine more into digital.”

The magazine was shut down in 2019, with Asos focusing more on “digital activations”. Ollerhead notes that “ad products have become a lot more sophisticated”.

“We’ve got the range from display ads through to sponsored ads, social media, email, push notification. We cater to all of those different ad products now. And the holy grail obviously is linking all that up to your own first party customer database.

“That’s something that we’ve been really trying to put together and move forward over the past few years. And we’ve still got some work to do, but we’re in a a decent spot at the moment.”

Listen to the full episode below:

Every fortnight, Skeldon is joined by a host of experts from across the retail media ecosystem for a look at what leading UK retail media networks are doing; how the sector is evolving; and where it goes next.

The series, in association with SMG, sees Skeldon joined by a member of the SMG team and a special guest speaker. With future episodes featuring Co-op, Stonegate Group and ITV.

This episode, and all in the wider series, were recorded live at Retail MediaX this June. The event will return in October, as part of the RetailX Autumn Festival, with 40 like-minded retail media leaders, from across sectors, representing a wide range of job functions, who want to be kept abreast of trends and analysis in the industry with a six-month update.

Registration is open now! With ChannelX World and SubscriptionX also returning on 09 October 2024.

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Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox.

The post Linking adverts to first party customer data is “holy grail” of Retail Media, Asos tells new podcast appeared first on InternetRetailing.

The nuances of selling media, stacking shelves or the opaque world of programmatic is not really that important to the CFOs of big retailers or Excel jockeys in Goldman Sachs.

The Goldman Sachs investor report “The Merchant-Media model: A new era for retailers as ad platforms” from 2021 wrote that “For Walmart specifically, we believe this new media income stream from CPG could provide a 6-7% EBIT growth tailwind”.

Deutsche Bank say that “advertising is a significant component” and that the contribution of ad sales to the company’s gross merchandise volume could grow as high as 8 to 10%.

For CFOs and investors, the explosion of retail media is one part of a much larger, transformation of retail from the buying and selling of goods and services to a different model, where the ‘side hustle’s such as advertising or fulfilment services become the ‘main hustle’: you could say, with your tongue firmly in check, say that retailers are advertising business who happen to sell products.

During a Walmart’s earnings call, John Rainey, the Walmart CFO, said specifically that looks at profit margin per incremental new revenue. For every net new digital commerce and advertising dollar, Walmart earns 12.5% – roughly three times its overall margin – and he believes that this will keep on improving as the eCommerce supply chain matures.

This is important as the typical margin for a retailer is 2-4%. 

CFO Rainey said: “this is a compelling data point that supports the strategy that we have – and it’s changing the margin profile of our business.”

Of course, Retail Media is not the only driver.  Retailers are investing in marketplaces, logistics automation, membership models, AI and analytics, which have better margins than the core retail business.

One important to note is that not all of these initiatives are high margin: ecommerce is hard to turn a profit on— at least in the short-term — thanks to the huge sums needed to expand online. 

However, there is a virtuous flywheel, where investments in the likes of marketplaces, membership models, AI, analytics and eCommerce not only improves growth but also increases the quality and quantity of data.  More shoppers mean more data you have, the more opportunities to scale the advertising business.

Regardless, the fact that Excel jockeys and analysts are asking questions about retail media – and not about inventory, headcount or operations is a good thing – as it means that it will top of the CFOs agenda for a considerable time.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.

The post Retail media ad margins: how attractive are they to CFOs and investors? appeared first on InternetRetailing.