Why some are approaching retail media with caution

Behind the Kroger, Yahoo partnership This edition is made possible by SiriusXM. MAY 6, 2024 Did you know retail media will account for 1 in 5 digital ad spend dollars this year worldwide? That’s according to our most recent forecast. The good news is, if you’re receiving this email, you’re already probably riding the retail media wave. Was this email forwarded to you? Sign up [here](. [ANA exec says advertisers ‘cautiously optimistic’ about retail media, but Kenvue is all about innovating]( As [retail media]( grows, it’s becoming increasingly complex, prompting some marketers to take a step back and rethink how they’re approaching the channel. “We’re seeing some real caution—with a dose of optimism,” John Paquin, senior director, brand and media, at the Association of National Advertisers said at our [EMARKETER Summit]( last week. “We’re seeing the number of platforms marketers are using stay flat, and for some, they’re actually reducing that number. Most are not increasing their spending and not sure if they will in the future.” Take a look inside: Instead, brands like Kenvue (formerly the consumer healthcare division of Johnson & Johnson) have turned their focus inward, streamlining their internal media teams in order to reduce silos and improve retail media’s effectiveness. “We’re six months into what we’re calling an embedded model,” said Jordan Witmer, associate director, omnichannel retail media at Kenvue. “That means we’ve pulled our whole media ecosystem into one organization,” which includes brand, agency, and shopper marketing stakeholders. - Not only has this helped Kenvue develop a more unified approach to its media investments, but it’s also helped the company make quicker, more informed decisions. - Now, as soon as the team uncovers something that will help contribute towards a business outcome, they are able to act on it, said Witmer. As opposed to previously when it would have to get run up the ladder before anything happened. Story continues below. This type of centralized model is something many brands are striving toward, though not all of them are there yet, said Paquin. “There’s a lot of silos and a lot of companies are struggling to break them down and coordinate internally,” he said, noting that identifying who controls the budget is a particular pain point for many. Not measuring up: Another reason marketers are hesitant to ramp up their retail media spend is the lack of [measurement]( standards across [retail media networks](. “Every time you add a new retail media network, it adds complexity to your organization,” said Paquin. “And some just don’t have the bandwidth. That’s where we’re seeing marketers actually pull back and use fewer platforms.” For Kenvue, choosing the right retail media network comes down to which platform can help achieve a specific business outcome. “If we’re looking at how to drive growth for brand X in segment Y, we evaluate all the players on the board,” said Witmer. “Then we choose who is interesting or can do something unique.” It’s also important that the retail media network provides a connected commerce ecosystem. - “There’s great power in connected experiences, and connecting what’s going on organically on a retailer’s site to what we’re putting out in the open web ecosystem to what we’re doing in the store’s parking lot,” said Witmer. - The idea is to create a holistic picture of how a campaign is performing, which means piecing together performance outside of the retail environment. - “I am no longer playing the game of investing with retailer X to drive outcome at retailer X. Retail media is a bigger game. How do you feed into my systems? How do you stack up against everybody else so I can make an educated choice that is potentially you.” A bright outlook: While some brands may be a little more cautious with their retail media investments, the channel will continue to grow massively over the next four years. - This year, we forecast US omnichannel retail media ad spend to grow 26.0%, reaching $54.85 billion. - That number will grow by about 24% every year through 2028, when it will reach $129.93 billion. As advertisers consider how to maximize the effectiveness of their retail media spend, retail media networks should take this time to ensure they’re delivering on the promises they’re making to clients, prioritizing measurement and optimization capabilities. [Read online]( [Kroger, Yahoo partnership enables marketers to reduce reliance on third-party cookies]( Kroger Precision Marketing, Kroger’s retail media network, has partnered with Yahoo Advertising to enable advertisers using Yahoo’s DSP to leverage Kroger’s first-party data to reach a more targeted audience. Why it matters: Even though Google has delayed cookie deprecation once again, marketers need to be prepared for a post-cookie world. Partnerships like these enable advertisers to continue to accurately target their campaigns without having to rely on third-party cookies. - Over three-quarters (77.0%) of US marketing and advertising professionals have begun to use first-party data as a solution to cookie loss, according to a November 2023 survey by Basis Technologies. - But more than a third (37%) of US brands and agencies are worried about having enough first-party data for targeting and activation, per a November 2023 report from the Interactive Advertising Bureau. “Our collaboration with Kroger highlights the critical importance of first-party data in a cookieless world,” said Mike Brunick, senior vice president, head of commerce media at Yahoo. “By integrating their retail data into our DSP, we can scale the impact of that data and deliver better results. This is ultimately beneficial for both retailers and advertisers.” This partnership will also help advertisers more effectively optimize and measure their campaigns. - Performance measurement is the most important factor in retail media budget allocations according to 56% of US consumer packaged goods manufacturers, per a December 2023 survey from Skai and Path to Purchase Institute. - “Advertisers on average see 6.5x higher return on ad spend when using our precision audiences,” said Cara Pratt, senior vice president of Kroger Precision Marketing. “By expanding our availability through the Yahoo DSP, we’re delivering even more meaningful messages and measurable brand impact.” [Read online]( Email sent to: {EMAIL} If you cannot view the HTML newsletter, [please read it in your browser here](. 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