By Michele Roney, The Mars Agency
Advertisers don’t magically appear when you roll out a platform. To break through in a crowded market, retailers must check the list on these six strategic fundamentals.
The Mars Agency is excited to unveil the rebranding of its Retailer Solutions business unit as RetailerCX with a refreshed webpage and the following article, the first in a new series of thought leadership from experts behind the best-kept secret in retail media.
Just because you build it doesn’t mean they will come.
Ad spending on retail media continues to rise, with the latest projections from Insider Intelligence projecting global outlays to grow 22% this year and 19% in 2025 to reach $165.9 billion — and command 22% of all digital advertising dollars worldwide.
The hype around retail media has every retailer — and just about any consumer business with a customer database and a steady digital audience — assuming that some of those ad dollars are theirs for the taking. That assumption would be wrong.
Industry-wide spending may be climbing, but internal marketing budgets aren’t necessarily keeping pace. As networks continue rolling out, advertisers are becoming more selective about where they invest their dollars — because not all networks have the right audience, capabilities or business model needed to drive real growth for their brands.
Launching a network without a thoughtful plan, therefore, isn’t going to open brand coffers. Based on our 30 years of experience as a pioneering force in retailer strategy, which includes behind-the-scenes efforts launching some of the most successful retail media networks, The Mars Agency’s Retailer CX practice has identified a checklist of six “must haves” that retailers need to embrace to build, optimize and scale a breakthrough media network. They are:
1. Access to quality first-party audience data
This is the most critical element. Retailers need to understand the quality of their customer data and the uniqueness of the audience they can bring to advertisers.
The ability to provide access to a deep set of first-party shopper data is the main reason that retail media has become all the rage in the advertising world. (Having a longstanding loyalty program is a big help here.) Possessing the data is only the first step, however. The data must also be addressable, scalable and, ideally, customizable to attract advertisers who are now demanding highly targeted audiences.
Those capabilities have basically become table stakes, however. Retailers also need to identify what makes their shopper audience unique. CPG advertisers don’t really need another grocery network that provides access to middle-aged shoppers (who probably frequent multiple stores). But they might, for instance, need a network whose customer base is dominated by loyal “better for you” grocery buyers or Gen Z shoppers — audiences that aren’t available through other networks.
2. Strong brand positioning
A retail media network should reflect the brand qualities that have made that retailer successful overall, serving as an extension of the customer experience it already delivers rather than a new concept with a different value proposition. What does the brand stand for and how will that be represented through the network? This is an important question to answer up front.
Once answered, this brand positioning should be clear to the marketplace — and will need to be communicated. Retail media is a whole new ballgame for retailers, who’ve gotten used to being the industry’s buyers, not its sellers. (They usually build stores, or websites, and brands come.) Now that the roles are flipped, retailers must be prepared to act more like sellers.
Strong brands positioning can itself be a sales tool as discerning brands look to align with retailer partners who have a clear go-to-market proposition that resonates with loyal shoppers.
3. Commitment to PR
Being a seller requires being a marketer as well. Retail media networks have to be showcased to prospective advertisers, an oft-neglected fact that even some established networks haven’t quite yet realized. Advertisers have far too many options at their fingertips for networks to wait for their phone to ring.
Retailers therefore need to come out of their traditional shells, develop a go-to-market strategy, and put a team in place that will get the word out. That means sell sheets, media kits, press releases — all the collateral that suppliers always send their way.
Beyond those basics, thought leadership has worked for several leading networks, especially since retail media is such a hot topic for business and trade publications alike. And speaking engagements at industry events can put the network’s key executives in front of engaged advertiser audiences.
4. Prioritized tech investment
Building an effective media network requires capital investments in technology, another area that historically hasn’t exactly been a priority for retailers.
To launch a network, retailers must improve their website and ecommerce platform, build the necessary infrastructure and data tools for the ad platform, create more digital engagement opportunities, and even enhance the in-store experience. These will all require significant investments for which retailers aren’t always prepared. They’ve got to be ready, willing and financially able to spend.
5. Joint annual planning opportunities
While the retailer-brand dynamic is certainly different for retail media, some of the more effective aspects of the overall business relationship should be maintained. Networks need to go beyond the act of selling media to provide joint business planning that will help advertisers optimize and maximize their annual investments — especially smaller CPGs with limited resources of their own.
And speaking of the overall business relationship, networks must be ready to respond to the call from advertisers to align retail media negotiations with the broader JPB discussions between their companies. Networks must have a clear connection into the rest of the retail organization to give brands the cross-functional integration they increasingly are demanding.
6. Advanced measurement capabilities
A unique, targetable audience is relatively worthless if advertisers don’t have the ability to accurately measure the impact of their campaigns.
The first wave of retail media networks got by with using traditional digital media metrics to measure performance. Advertisers now are far more demanding; they want to see omnichannel ROAS and conversion metrics for both online and in-store sales, among other KPIs. Retailers need to build closed-loop measurement systems that track in-market behavior (ideally in real time), tie results back to the target audience, and improve the insights that will inform the next activation.
Just because retailers can launch a media network doesn’t mean they should — although, truth be told, most will probably give it a try. As competition increases, the opportunities narrow. Retailers who are unable or unwilling to deliver on these six must-haves should think long and hard before starting the journey; existing networks, too, should make sure they’re checking all the boxes if they’re having trouble breaking through the clutter.
While embracing these fundamentals won’t guarantee success, entering the market without them is a surefire way to fail.
About the Author
EVP Michele Roney leads The Mars Agency’s Retailer CX business, which helps retailers drive growth through marketing, customer experience design, and the creation, operationalization, and monetization of retail media networks. A 32-year Martian with experience across retail marketing, media and promotion, she has led the ground-up development, management and support of leading networks both in the U.S. and Canada.