The retail media business is booming, but not everyone is as enthusiastic about it as meets the eye. A new report from the Association of National Advertisers (ANA) reveals that many brands are participating reluctantly—and don’t feel all that confident about retailer data. What factors can help drive brand confidence in retail media networks (RMNs) for the future?
Brands are buying, but are they enthusiastic about it?
The ANA’s “Retail Media Networks: A Forced Marriage or Perfect Partnership?” spells potential trouble for retailers and their brand partners. Evaluating the usefulness of RMNs on a scale of “Valuable marketing tool” to “Cost of doing business,” 42% of brands respondents located themselves squarely in the middle of the two options. Thirty-one percent chose “Valuable marketing tool,” and 28% selected “Cost of doing business.”
Clearly, not everyone views a RMN investment as a value generator. In fact, many feel somewhat forced into the partnerships.
Eighty-eight percent of brand respondents indicated that they were “somewhat or heavily influenced” by retailers to invest in RMNs.
In other words, the RMN investment feels like a “have to” more than a “want to.” Part of the problem is the sheer number of groups and interests at play, including brand team marketers, trade and promotion, shopper marketing and more.
Everything’s not lost
While the brand sentiment expressed in the ANA report is less than ideal, hope may still spring eternal for retailers. Why? A majority of brands expressed a more positive outlook for the future. Fifty-two percent of RMN buyers expect the networks to be viewed as a “valuable marketing tool” over the next two years (compared to the 31% that currently view them in that light). In fact, brands offered a 4:1 vote of confidence in RMN potential (22% vs. 5%). The optimism is a reaction to the testing efforts currently underway to help align RMN performance with brand KPIs. For brands, the ability to optimize and measure campaigns according to business objectives is a fundamental priority moving forward.
Data and sales make the difference
So what’s going to make the difference for brands? What will make or break the transition from reluctant to optimistic buyer? Two big factors. Brand advertisers indicated that leveraging first-party data (56%) and directly driving sales (51%) were “very important” opportunities related to how their companies use RMNs.
First-party data is highly valued given its role in making up for the deprecation of third-party cookies. Plus, one priority feeds into the other. Without verified, first-party shopper data at scale, RMNs can’t deliver on the targeting and personalization opportunities that ultimately drive incremental sales.
Unfortunately, right now, retailers aren’t hitting the mark when it comes to data.
Fifty-seven percent of advertiser respondents expressed frustration with the lack of standardization across platforms, as well as issues with the amount, quality and consistency of data reporting for individual RMNs.
With the right partner, there’s no need to hesitate
Despite the poor marks, the data challenge is far from insurmountable for retailers. It’s just a matter of making sure you have the right partner ecosystem in place to expand and enhance current holdings. With the right identity resolution, retailers can close the gaps in their shopper data to identify and understand all customers—known, unknown, loyalty, non-loyalty, online and offline – effectively scaling their first-party holdings.
Identity resolution is particularly important for retailers with an in-store component, since most brick-and-mortar operations lack mechanisms to identify the individual behind the in-store transaction. Point-of-sale (POS) data can help solve this challenge and support comprehensive shopper profiles regardless of channel or card used. It’s also important to enhance shopper data to create the maximum number of attributes for segmentation, incorporating factors like purchase history, demographics, and socioeconomic and lifestyle factors. Brands can also seek third-party partnership to make sure they have verified customer insights and reliable measurement capabilities.
It takes the right data, at scale, to compete
Retailers cannot compete moving forward, or assuage growing apprehension from brands, without ample first-party data and measurement capabilities. The right partner can help expand both. Brands have to take a close look at their retail partner’s data capabilities before engaging—and seek outside partnership to gain a deeper understanding of performance.
The Bridg data and audience platform helps retailers get the first-party scale they need to launch and grow retail media networks. We also help brands and advertisers improve retail collaboration and gain unprecedented insight into consumer transaction behavior. Contact us to learn more.