Unveiling the Untapped Potential: Retail Media Data Decoupling Transforming Marketers' Success

The retail media channel is a hot topic at Advertising Week New York, with some advocating for retailers to separate their first-party data and make it available for various applications. Brand marketers are demanding more flexibility in retail data usage, and Kroger Precision Marketing (KPM) at 84.51° has announced that it will partner with The Trade Desk to address this issue.

Aracely Moreno-Mosier, senior director of omnichannel marketing and head of retail partnerships at PepsiCo, believes that retail media networks hold tremendous power. By monetizing the data and providing self-service or managed service options to advertisers, it is possible to address multiple challenges and unlock new growth opportunities. KPM has developed a solution based on feedback from advertisers. This solution allows partners to utilize KPM purchase data through their existing "seat" on The Trade Desk, a demand-side platform (DSP). Seats are licensed accounts on DSPs that enable ad buyers to carry out transactions and access additional features. Further details on KPM's solution will be revealed in the coming weeks.

Jill Smith, vice president of media sales at KPM, announced during a talk that this fall, a new programmatic offering will be launched in collaboration with The Trade Desk. The aim is to separate our audience, inventory, and measurement data. We now provide transparency by allowing brands to activate their retail data from their own seat. This ensures brand safety, reach, and frequency are not compromised. Additionally, we aim to make it simple to access our data and provide daily measurement.

A pivotal moment

With the rapid expansion of retail media, a crucial question looms over the industry: will retailers mimic the practices of established digital giants like Google and Facebook by creating closed ecosystems that hinder transparency in data access? Perhaps, decoupling could offer the ideal solution that brands are seeking.

Retail media networks are showing signs of becoming more transparent with their use of first-party data, as the need for standardization across the channel becomes increasingly important. Publishers are aware of the frustrations with the current model and are looking to maintain their momentum as retail media networks continue to grow as profit drivers. According to GroupM, the retail media category is projected to surpass the combined revenues of linear and streaming TV by 2028. Kroger and Albertsons, two rival grocery chains, have both played a role in developing retail media measurement standards through their collaboration with the Interactive Advertising Bureau. The Advertising Week panel, which included representatives from Bayer and was led by The Trade Desk, focused on the topic of "retail data," a term that lacks a shared understanding and highlights the fragmented nature of the current landscape.

Stephanie Paterik, the panel's moderator and general manager of The Trade Desk's editorial division, expressed that we are currently in the intriguing toddler years of retail media and retail data.

A study conducted by The Trade Desk's intelligence unit in conjunction with Materialplus revealed that 81% of advertisers incorporate retail data into their campaigns. However, there were different interpretations of what "retail data" actually refers to: 44% of respondents believed it to be data collected by retailers about their own businesses, 40% stated that it is data gathered by advertisers related to purchasing trends, and 16% indicated that it is data collected by researchers on purchasing trends.

Panelists had different perspectives. Smith stated that KPM views retail data as Kroger's shopper data used for media planning and buying for both offsite and onsite channels. Moreno-Mosier from PepsiCo, who supports the company's commercial and sales operations, had a broader perspective.

"For us, it's about anything that can provide insights for the business. Retail data can include inventory levels and how products are performing in-store," the executive explained. "It definitely relates to shopper behavior, but it also helps with planning promotions."

Broadening use cases

As marketers seek to maximize the effectiveness of retail data, there is a growing need for more flexibility in its utilization, going beyond the traditional emphasis on lower-funnel ad formats such as sponsored product listings. PepsiCo highlights the potential of experimenting with regional brands. For example, NatuChips, a plantain snack popular in Latin America, could find success in specific areas of the U.S. such as the East Coast, where a national promotional campaign might not be necessary. Leveraging retail data allows for more precise targeting of these localized campaigns, enabling increased trial and brand awareness.

PepsiCo is currently conducting a pilot program to explore household elasticity. Customers who are loyal and less likely to switch brands, referred to as "low elasticity" customers, may receive smaller discounts on products like Pepsi, Doritos, and Quaker Oats. Additionally, the company may tailor advertisements based on the financial situation of different consumers using retail data, considering the ongoing impact of inflation on messaging strategies.

"With the increasing division of wealth, we are witnessing a more aggressive trend," stated Moreno-Mosier. "In this case, there should be a benefit for the shopper."