Getting smart about retail media

Sally Tobin
By Sally Tobin | 15 April 2024
Sally Tobin.

Brands need to make sure their strategic understanding of retail media keeps pace with their investments. Here are seven actions to take.

Retail media ad spending in Australia is on an upward trajectory, projected to reach A$1 billion by 2025. The learning curve for optimising that investment needs to climb just as quickly.

Retail media networks have rapidly become a pivotal component of the advertising and retail landscape, driven by the global shift toward digital shopper engagement and the need for advertisers to find effective, privacy-compliant ways to reach consumers.

For retailers, these networks offer a lucrative opportunity to monetise their digital platforms and other owned assets while addressing these trends by leveraging their first-party shopper data to provide targeted, effective advertising solutions for brands.

For all those reasons, retail media has become integral in shaping the future of marketing and commerce in the region, with growth fuelled by a shift beyond trade budgets toward retail media — and a significant amount of brand dollars moving to the retail sector.

As retail media grows in importance, however, many brand organisations are scrambling to develop the strategic understanding they need to efficiently leverage the media opportunities their retailer partners are now showcasing as part of their offerings.

The unique nature of retail media has created a knowledge gap in the skill sets of many organisations, with retail experts untrained in the details of media buying, and media buyers who don’t understand the nuances of the retailer relationship.

As the marketplace heads into the latest round of retailer annual planning and trade spending commitments, that knowledge gap is a liability that could easily lead to inefficient spending and ineffective campaign activation. And with investments rising, expectations this year will be higher than ever before.

The following are seven actions brands should take to ensure they’re ready to maximise retail media spending in the coming year.

1. Study the playbook.

Retail media networks are working furiously to build up their media offerings and executional capabilities. Simply keeping track of what’s available is hard enough — let alone understanding which opportunities will deliver the greatest return on investment.

To help our clients navigate through this exercise, The Mars Agency created a Retail Media Report Card that tracks leading networks against the essential criteria needed for successful planning, execution, and measurement. (A public version of this report is available here.) Finding ways like this to track and evaluate the many opportunities available is essential to success.

2. Enhance, don’t damage, the relationship.

Retail media adds a whole new layer of complexity to the brand-retailer dynamic that, in theory, should improve the partnership by providing new avenues for collaboration and mutually beneficial shopper engagement.

Placing too much emphasis on these new, often unproven opportunities at the expense of more traditional, effective activation strategies could impact the relationship in negative ways, either by delivering poor results that impact future discussions or by alienating the merchants and other “old friends” who remain at the core of the partnership.

3. Learn where to flex.

To that end, as brands look to reallocate some of their investment toward retail media, they need to have a firm understanding of which areas of the existing trade plan are flexible and which are non-negotiable must-have’s. (For instance: consider which tactics place 100% of the spend back into the merch team’s P&L, vs. sharing revenue across the network).

4. Align with the brand media plan.

One key learning gained from the evolution of retail media in other parts of the world is the need to align retail media activity with the broader brand media plan. Doing so will allow organisations to avoid duplication of effort across functions while identifying potential gaps in the engagement plan. It will also facilitate better, more seamless shopper engagement.

5. Save something for a rainy day.

While most of your trade dollars will be committed upfront to key calendar events and important tactical activations, it’s always smart to keep a little bit in reserve. These unallocated funds will help you respond to any situations that might arise during range reviews or react to other unexpected developments in the category during the year.

6. Find the right partners.

Getting up to speed on the emerging retail media marketplace — and then keeping pace with all the changes taking place — is a tall order for brand organisations of any size.

Finding industry partners with dedicated resources and proven expertise across on- and off-platform capabilities who can also layer those skills against customer knowledge, will accelerate the learning curve and improve the odds of early success.

7. Invest in the right measurement tools.

Whilst retail media networks are continually investing behind new ways of measurement, these efforts are often weighted heavily in their favour — and competitive networks don’t measure apples with apples.

The constant voice from brands is that measuring impact against business objectives (vs. traditional media metrics) remains paramount, but something that is evading the current reporting outputs. As a result, many brands are turning to independent solutions that dive deeper than traditional MMMs, leveraging tools such as The Mars Agency’s commerce marketing measurement tool, Marilyn.

Retail media has already become far too important to effective commerce marketing for brands to be learning as they go. Taking these actions now can keep them from stumbling out of the gate and better prepare them for future excellence.

Sally Tobin is the Founder and Managing Director of the ANZ operations of The Mars Agency.

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