Deliveroo Global Director: The Promise Of Retail Media
23 Feb, 2024
With Retail Media set to account for a fifth of all digital ad spending, Deliveroo's Global Director of Commercial and Operations, Alex Prouhet, believes that retail media could evolve to where brand marketing and performance marketing objectives can be achieved in unison but is wary that it is being over-hyped.
In a digital marketing landscape affected by macroeconomic uncertainty and change prompted by privacy regulations, retail media is undoubtedly a bright spot. According to eMarketer, this emerging channel is projected to grow by 21.8% this year, accounting for roughly $140 billion globally, and a fifth of all digital ad spending.
With these numbers, retail media has become the topic de rigueur at marketing events and the go-to buzz word of the time…next to AI of course.
The promise of retail media to advertisers is a deterministically measurable ROI and connection to a highly engaged consumer in a brand-safe environment. For retailers, it provides the potential for a profitable revenue stream from the monetisation of ad space, first-party data, and targetable audiences. Lucrative to both parties.
What it also provides is a potential future where a digital marketer can seamlessly buy and measure omni-channel media online and in-store, uniting the shopper journey across the digital and physical world. This is the dream.
In order for this dream to come true a few things need to happen.
- Standardisation - at the moment advertisers and agencies are struggling to measure effectiveness across their retail media engagements, and receiving data in wildly different formats. Metrics, benchmarks, and the activation process across platforms varies wildly. Data and ad products will need to standardise in order for media planning to incorporate retail media into cross-channel campaigns, and move past isolated testing.
- Consolidation & Interoperability - the considerable investment required to build and maintain a retail media platform will force some retailers to adopt enterprise ad tech, or unite to form a marketplace of retail inventory. This will provide an opportunity for standardisation, where optimising for performance will be a must-have feature. Equally important will be the connection of onsite and in-store campaign activation and measurement.
- Opportunities for brand marketing - so far endemic partners have been natural first-adopters of retail media, but in 2023 we saw a change with more non-endemic partners experimenting in the space. Brand building opportunities will provide a way for non-endemic partners to create equally creative connections with their consumers, as well as points of differentiation between retail media offerings.
With these principles in place, retail media could evolve to where brand marketing and performance marketing objectives can be achieved in unison, finally smashing the digital marketing funnel of awareness, consideration, and conversion.
The potential draw-back of over-hyping retail media, and placing too much emphasis on performance, is the detrimental long term impact of neglecting marketing which is difficult to measure in the short term. With retail media and the promise of attributable ad conversions, we shouldn’t forget the profound effect that virtual and in-person immersive experiences can have to build a connection with a brand. These so often don’t get the recognition they deserve in building long-term relationships with consumers. Let’s not trade return on investment, for return on experience.
Take the Mexican beer brand Modelo Especial for example, which surpassed Bud Light in U.S. retail sales in May and June of 2023. This was achieved through steady gains in market share through clever brand-building tactics. In 2017, Modelo replaced Bud Light to become the sponsor of the UFC, and went on to further build brand affinity from a younger and more diverse demographic through authenticity and connection. The brand crafted narratives from its 100 year heritage, championed the underdog with a “fighting spirit” campaign, and helped to grow the Mexican lager category through associations with the summer season, affordable luxury, and approachability.
As I reflect on the potential of retail media, and the power of authentic brand marketing, I’m reminded of the time I showed up to Stumptown Coffee roasters in Portland, Oregon hoping to go on a tour of the place. With the dates mixed up and no tours on, someone from the corporate office in the back peaked their head across the hall to see me and my friends visibly disappointed. This person stopped their work and proceeded to take us on a tour of the entire facility, introducing us to the team of roasters, and giving us bags and bags of free coffee. I’ll never forget it, we felt heard and appreciated, and for that I’ll always think fondly of the brand.
As retail media grows in popularity and functionality, let’s remember that driving a sale can happen in many different ways.
Alex will be writing a regular column for MAD//Insight throughout the year.