The retail media sector is in danger of running out of steam unless it pivots to properly fit the needs of media buyers, according to Criteo’s general manager of global retail media Melanie Zimmermann.
The biggest danger facing the channel is how it treats media buyers and how it’s viewed in the industry.
“What I see globally—retailer by retailer and then in aggregate as well—there’s this thrill of getting into the space, you do some of the proven things, you give the brands what they’re excited about. Due to the appetite from brands for this advertising-fuelled significant growth, I’ve seen 60 per cent incrementality in the role I was previously in, that excites the retailers and gives them confidence and a belief they know what they’re doing,” Zimmermann told B&T.
Prior to joining Criteo at the start of last year, Zimmermann spent nearly four years in charge of the Macy’s Media Network—the American retailer’s in-house retail media network.
“Over time, it gets harder. Then the retailers lean into joint business plans, giving the brands additional incentives to keep increasing their spend at a certain rate. The brands, again, are calculating the cost of doing business relative to the top line and increasingly ask how they can get more efficiency out of that spend,” she explained.
“I’ve seen a consistent enough pattern that if we just keep doing what we’re doing, then retail media will run out of steam. But it doesn’t have to run out of steam if, and only if, the industry is able to do a pivot and become truly a form of media rather than another tactic to implement to drive business with a retailer. Then more of the national or brand marketing budgets could flow into the retail media environment.”
Retail media has been one of the most talked-about sectors in adland for a while. It seemed to be able to cross the Rubicon between the top and bottom of funnels, rendering all other channels both hopelessly inefficient and lacking the loudspeaker to reach buyers en masse.
In fact, Daniel Knapp, chief economist at IAB Europe told attendees at the DMEXCO conference last year that the lines were blurring between performance and brand advertising.
“Think brand advertising and performance advertising, but they’re mentioned together. So this artificial separation of the two is coming to an end,” he said.
It’s a tempting offer for businesses. Late last year, CommBank launched its Connect retail media offering. CommBank’s marketing boss and CMO Power List inductee Jo Boundy told B&T that its CommBank app gave it the platform, audience size and data, as well as the physical infrastructure to make it a success.
“We can be really sophisticated and provide those advertisers and partners who want to be in connect with the attribution and the measurement they want actually want that they don’t get across all of the more traditional media channels,” she said.
“We think it’s going to be quite successful,” she added.
More recently, Bunnings has introduced its own Hammer Media offering. The Wesfarmers-owned business said Hammer Media will streamline messaging and enhance brand awareness across Bunnings channels such as social media, website, in-store radio, eDMs and in-store screens. As part of the network launch, 300 digital screens have been installed across 150 stores.
Hammer Media will give suppliers access to more than 14 million website visitors monthly, in addition to in-store customers, social media followers and lifestyle print publication, Bunnings Warehouse magazine.
“We see traditional advertising declining but at the same time, there’s a surge in interest in on-site video advertising and retailers’ websites. Those video budgets, typically, sit upper funnel, so theoretically, there’s an opportunity for more budgets to come in but the retailers have to pivot and evolve to become true publishers,” said Zimmermann.
“Some retailers are still in the mindset of being the party in town [at the moment] and media buyers will just adapt, they’ll build portals and do lots of meaningful things to have more ways of buying with the retailer,” she continued.
“But from the media buy side, we are hearing very clearly that the openness to do that and even to have the headcount to get familiar with so many different platforms and the managed services model are not in tune with what they need.”
It’s something that Colin Barnard, Criteo’s MD locally has also been hearing.
“We’ve had ecommerce practices within the holdco agencies. We’ve had brands say to us, for example, Endeavour, we’re now using a platform which we recognise as the number one in our holdco practice or brand globally,” he told B&T.
“But it’s been designed for media buyers and people who come with a media mindset, rather than a trade mindset, which is maybe a different set of monies. If you’re a media buyer, you want to know that the ad has been shown for more than a couple of seconds and all those sort of controls and processes that have existed and we’ve adhered to in media for years. In the trade sector, that’s just not the language and standard that exists today,” Barnard added.
Zimmermann offered an example globally, too.
“I met with the global head of retail media for a large CPG firm the other week and he said, ‘I’m so excited about running retail media but it is so hard, we have so many retail partners globally, everyone is grading their own homework, everyone is trying to build their own thing,” she said.
As OzTAM and the OOH industries have been working to create their own unified measurement system, it seems as though the same might be needed for retail media.
