Brands are under more pressure than ever to prove that their advertising investments are leading to meaningful ROI. To do that effectively, they are seeking out offerings that focus their dollars on known purchasers to eliminate wasted ad impressions. The solution? Retail media.
Retail media lets brands identify consumers that are in market for specific products based on their purchase behavior, reach those consumers with targeted ads to drive them down the consideration funnel, and then tie those media impressions to actual sales activity. These durable data points can be used for full-funnel targeting and attribution that closes the loop – a marketer’s dream.
The problem is that it can seem daunting for brand marketers to seamlessly integrate the robust offerings retail media networks provide into their already established ad buying ecosystems. With over 200 retail media networks vying for these coveted brand dollars, marketers are forced to pick a few winners, invest only budgets that are earmarked for lower-funnel activity with these retailers and call it a day.
But what is it that both sides need to succeed? Retailers want their data to be more ubiquitous across national brand campaigns, while brands want to invest in deterministic and durable signals at scale. The key to success is the same for both: data portability.
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If retailers make their data more portable so that brands can leverage it outside of their “one-size-fits-most” owned and operated models, everybody wins. Retailers win because they can make their data more ubiquitous across full-funnel campaign activations and create a new revenue stream. Brands win because they have access to a durable, deterministic data signal to leverage in upper- and lower-funnel activations, making their ad dollars more efficient. Last, consumers win by seeing fewer and more relevant ads for products they are actually in the market for. Here are three ways in which data portability can come to life the solve the challenges both retailers and brands are facing.
Clean Rooms
For retailers that are apprehensive about letting their data loose outside their own walls but do want to give brands the ability to commingle their data assets with the retailer’s first party data, a clean room is a great middle ground. While there are various ways in which retailers and brands can work together in a clean room, here are three broad-based applications for one.
- Audience building: CPG brands don’t typically have an endless pool of first party data. Most consumers don’t go to tolietpaperbrand.com to learn about the ply of the product before purchase; they toss it in the cart at their retailer of choice and that’s that. However, brands do have a great deal of insight into who their target consumer is, and they are looking for applications to use that data in meaningful ways. A clean room allows a brand to tap into a retailer’s shopper data and marry that with their own first party insights to co-develop audiences with the retailer. These audiences can then be exported directly from the clean room into a 3P ad buying platform or DSP, with minimal risk to either party.
- Sales measurement: It’s no surprise that one of the largest challenges for CPG brands is to actually prove what specific channels and ad messages led to a purchase. Marketers are smart enough to know that the last click before purchase shouldn’t receive all of the credit; it would be like passing out coupons for 50% off to people in the checkout line, then trying to say that the coupon is the sole reason the consumer made the purchase. They already had the item in their cart, you just gave them an incentive to make sure they didn’t get tired of waiting in line and leave.It’s challenging for brands to truly understand which touch points got a consumer in the store in the first place, and this is exacerbated by the divide in measuring in-store and online purchases. By commingling sales data with a brand’s exposure data in a clean room, brands can finally connect the dots and see the full path to purchase.
- Real-time inventory management: Brands don’t want to invest media dollars in markets where they have low or no inventory — that’s not going to lead to a good consumer experience. Brands want to invest their dollars in markets where they need to win greater market share and increase the volume at which their products move off shelves. A clean room allows a retailer to provide brands with more visibility into real-time, store-level inventory signals to leverage in their media buying at a national or global level, with the confidence that there will be no data leakage outside of those walls. Brands can then build algorithms and APIs on top of those insights and plug those into buying platforms in order to control their ad buying decisions at the geo level in real time.
While clean rooms are an effective way to increase data portability, these solutions can require a significant amount of capital and resources to enable safe and effective data sharing at scale. To increase overall efficiency for retailers and brands, retail data marketplaces are becoming the leading avenue for data portability because they enable a more plug-and-play approach to data portability.
Retail Audience Marketplaces
In the same way many third-party data providers have curated audience libraries and made them accessible to brands within buying platforms, retailers can do the same. Retailers can build their own deterministic shopper data into pre-packaged audiences for brands to leverage. Within a data marketplace, the retailer can still retain a sense of control over how their data is used, while allowing brands to leverage this on top of their preferred buying practices.
Oh, and a bonus for retailers? Within a retail audience marketplace, any brand can leverage these shopper-based audiences, not just brands that sell products at the retailers themselves. Insurance brands, lifestyle brands, automotive brands and travel providers all can benefit from targeting that affords the ability to understand which life stage a consumer is in, to pre-qualify if the consumer would be in the market for their product.
Retail Measurement Marketplaces
Like the retail audience marketplace approach, retailers can make their data more portable for measurement. Brands can leverage offline sales data within their ad buying ecosystem of choice and have a third party perform the attribution.
When a retailer performs its own validation and attribution within its walls, it’s hard for brands to always trust that their finger isn’t on the scale in their own favor. I mean, if you were asked to perform your own annual performance review, it would be hard to be totally honest in your own assessment of yourself, right?
Allowing sales data to be more portable with unbiased third-party measurement lets brands extract maximum value from this data and consolidate sales across retailers for a full picture of how media dollars impacted sales.
For retailers to fully reap the benefits of the exploding retail media sector, they must look to data portability. Data portability gives retailers an incremental, passive revenue stream, advertisers can build more efficient campaigns across the digital ecosystem and consumers will get a premium, relevant ad experience. A win-win-win.
Sarah Small is Director of Retail Data Partnerships at The Trade Desk, driving retail-based initiatives for brands and leading relationships with retailers like Macys, Walgreens, Dollar General and Albertson’s. Before joining the retail data partnerships team, Small worked in client services. Prior to joining TTD, she spent time at both Triad Retail Media and at ecommerce tech startup Rokt. As one of Rokt’s first employees in the North American market, Small was integral in building and scaling its customer success center of excellence and the growth of both its DTC and B2B verticals.
