Retail media chiefs have warned that the industry needs to think of the bigger picture than solely focusing on measurement and ‘incrementality’.
As the sector attempts to improve its measurement capabilities—which has been a sticking point for brands trusting the effectiveness of the channel—the retail media chiefs of Metcash, Endeavour Group and Terry White believe that there is a bigger opportunity at hand.
Rather than being purely focused on performance, retail media should also work for brand.
Mark Lollback, who heads up Metcash’s retail media network LocalEyes, is concerned the sector is too obsessed with incrementalism—proving that retail media activity delivers a return on investment that would otherwise not occur.
“If we’re not careful, we’re going to get really narrow and we’re going to become a performance-based, measurement-based incrementality solution, and I think that’s crazy,” he told a packed auditorium at yesterday’s IAB Commerce and Retail Media Summit.
“I think that’s going to end up in a really narrow small hole, and it’s not going to serve our supplies well.
“I don’t know any other media form in this country where the only focus is on incrementality. If you want brand dollars, like let’s go back to what marketing is about. Marketing is connecting suppliers and products and their opportunities or their challenges with consumers.
“Let’s focus on going back up the funnel and on what is the challenge that a brand’s facing.”
Hayley Robinson, who heads up retail media sales at Endeavour’s retail media network mixIn, said that her team needs to be cognisant of the role that brand plays, particularly as alcohol consumption behaviour constantly changes with younger consumers.
“The younger generations are consuming alcohol differently, and this view that ‘we are going to get the sale anyway’ doesn’t necessarily translate in the world of liquor. So actually we have got a job to do on how we show up higher up in the funnel and we work really closely with the brand teams,” she said.
“If we look at Dan Murphy’s ‘lowest liquor price guarantee’, you may get them through the door, but once they’re through the door we can build the basket by having some theatrics in store and having some tasting.
“I’m not shying away from the fact that measurement will continue to be something we’re challenged on and incrementality is absolutely something that we’re looking at, but I agree with Mark’s point. There are bigger conversations that we need to be having around how we’re actually engaging shoppers given the macro environment that we’re all living in.”
For TerryWhite Chemart’s retail media lead Janice Hoogeveen, the focus on customer service is far more nuanced than ROAS.
She said that customers go to a pharmacy, in many cases, to solve a health issue and there are in-store activations dedicated to treating customers, rather than trying to push products.
“Healthcare professional brands can’t traditionally market their messages because of regulatory issues, and we’re looking at different sorts of measurements in terms of conversations that a pharmacist can have. For example, a key metric is awareness of a health condition and being able to talk about comorbidities,” she said.
“So the idea of measurement becomes quite different when you’re thinking about solving a health problem. We have to think about other areas than traditional measurement…it’s quite a different shopper experience.”
Lollback on QMS, Nine deal, creativity & horror stories
Lollback is the former CMO of McDonald’s and chief executive of GroupM (Now WPP Media). He joined Metcash to head up its retail media division last month, and recently secured a deal with Nine and QMS that would allow brands to to run campaigns across TV, outdoor and 860 digital screens across Metcash’s store including IGA, Mitre10, Cellarbrations, Bottle O, Home Hardware, Total Tools and more.
Lollback said the partnership has attracted new and existing brands and that they should start activating in the third quarter.
“Could you imagine it being on television, then we would surround our IGA or our liquor outlets with really cool, relevant outdoor and then we bring it into in-store activation right through to the shelf. That’s an exciting journey and we can help brands connect those dots and be an integrated solution,” he said.
LocalEyes operates a “dynamic quadrangle” structure in which merchandise, category, retail media, brand, shopper media and agency partners sit in a room to come up with big ideas that live across all marketing touchpoints rather than retail media activity existing in a silo.
He believes that the sector’s steely-eyed focus on incrementality stems from retail media often being looked through the lens of category teams, rather than marketing teams, which by nature are more focused on short-term sales on ROAS, rather than a brand’s key marketing objectives.
He is concerned that retail media is currently 80 per cent focused on performance metrics and 20 per cent on brand, when a healthier split would be 50:50.
He also believes that creativity in retail media activations are somewhat lacking, rating the sector as a 5/10 on creativity.
“What happened to the great activation? Where did that go? We saw some presentations last week, and the activation those guys want to do in our stores is mind blowing, that’s marketing,” he said.
“We have got to be careful and think more like a quadrangle and bigger picture. I think we’ve got a much bigger game to play than just focus on incrementality.”
B&T asked Lollback about his thoughts on marketers feeling pressured into spending more on certain retail media networks in the supermarket category.
A lack of trust was a key finding of recent research by Arktic Fox and Six Degrees. It found 53 per cent of brands plan to increase their spend in retail media, despite only 5 per cent reporting high trust, and 44 per cent reporting low trust in retail media networks, and that brand marketers felt pressured to spend more.
IAB Australia’s Retail and Commerce Media State of the Nation report also found a lack of trust, one of the key topics of yesterday’s conference.
“I hear these horror stories from suppliers, and as an ex-marketeer in FMCG, I think it’s terrible and it’s really bad for retail media networks,” Lollback said,
“It’s not how Metcash goes to market or part of my personal values. We’re flexible, we’re bespoke. There’s none of this ‘you must buy the network’.
“We’re focused on the audience and the shopper, and how to solve the problem. There are many other retail networks that are very rigid, and, let’s say, dominating. We’re not like that at all, and we don’t want to be.
He concluded: “I want successful partnerships. If my retailers grow because our partners are growing, then we grow.”
