Retail Media... partnerships & collabs are going Boom Boom Boom....!

(For definitions shake, I know 'retail media' is a hotly contested term depending on whether you're a traditionalist that knows retailers selling ads is actually a decades old tradition (like all of us who remember when it was called shopper marketing (RIP). I'm referring to the digital kind of 'retail media' in this article)

It seems we can't go even 24 hours without the latest retail media update! In the last few days, Amazon have announced partnerships in the USA with Meta and Snap, complimenting their growing social partnership with Pinterest announced earlier this year. Amazon's partnerships don't stop with social commerce, when we include integrations with Shopify, and other tech platforms and publishers. OH, and the ability to now also launch ads on Amazon Prime Video.

In the UK, Tesco has also gone live with their CTV partnership with Channel 4 (following the footsteps behind Sainsbury's and Boots).

My brain hurts already.

What does this mean for eCommerce and media teams now?

The lines have been blurring between commerce and media for a few years now, but this evolution is happening faster than ever, and marketers and advertisers are struggling to keep up with the changes and increased fragmentation this presents as a route to market.

Media plans that include paid social, TV, programmatic and paid search for D2C , all need to factor in the Retail Media capability overlay, and importantly how to measure the media effectiveness of these evolving channels, and link it back to sales performance that commercial teams are KPI'd against.

Andy Jassy (Amazon CEO), reflected in their Q3 earning reports that advertisers are still investing the bulk of their Retail Media dollars into conversion driving activity (ie onsite, search led paid ads). Therefore, using 3rd party partnerships to push more conversion driven ads feels like a good direction to travel in.

While we see companies being more cautious on the ads side at the top of funnel products, things like display and a little bit of video, we're still seeing a lot of strength in the lower funnel ad products like sponsored products.

We also started externalizing some of our products, like sponsored products to third-party websites and you see that with what we've done with Pinterest, and Hearst Newspapers, and Buzzfeed—we're still pretty early in that area, but it's growing well, and we're very focused on continuing to make it a great customer experience.

These third-party ad partnerships will make it easier for customers to move from inspiration to buying in one or two clicks.

The uptake for upper funnel / off-site DSP activities has been slower than they would like. IMO, this is for several reasons, one being the fact it requires bigger spend with less guaranteed results, and frankly it's been difficult until the introduction of clean rooms such as AMC, to truly measure the impact of spending big, and how this impacts the bottom line. In the global economy of high inflation, overinvesting isn't an option for many advertisers who need to prove positive ROI. And let's face it, new budgets aren't being signed off just because a new capability is available - in reality, budgets will be displaced across channels. This is a whole new conundrum for advertisers and their agencies to navigate, but I will leave that point alone for the sake of this article.

It shows how Amazon's move into partnerships are designed to reduce barriers to purchase - which is great for advertisers to get more sales, whilst also improving the 'conversion' opportunities on 3rd party sites that may previously have been seen more as upper-funnel marketing drivers.

How do eCommerce teams keep up with media trends to truly measure the impact of linking in-platform paid social campaigns on Facebook and Insta, with Amazon also automatically serving Sponsored Ads on Pinterest?

The priority for commercial teams working with retailers is ultimately the bottom line. How much profit do I make, how much margin do our partners make, and what bucket do we invest in to drive mutual growth through promotions and advertising.

Media priorities (historically) sit as a different bucket - the goal is to drive impressions and brand awareness.

eCommerce and retail leaders globally are asking themselves the question of how to truly understand their total investment in retailers such as Amazon on their overall profitability. It's becoming harder to measure, with every exciting new media launch and partner opportunity. It ALWAYS comes back to the bottom line.

-

When it comes to Commerce, the purpose of paid media, is to drive more traffic for sales and conversions. Yes? Yes...? Well, yes ... and no.

With increased capability to serve ads on-site (at the point of conversion) and off-site -

• Paid social partnerships & shopify - conversion led (but also serving for marketers as a 'consideration and awareness channel')
• Display, CTV - traditionally 'consideration and awareness' led, but now also offering conversion opportunities alongside brand building

...it raises questions about the role of retail media in a modern day marketing plan. 1st party data and audience planning unlocks opportunities for retailers to sell more advertising capability to brands, but at this point they're no longer really acting as a retailer - they're a broker of 1st party audience data.

You can see why for those not plugged into the world of retail media, it's easy to confuse retail media as just being a retail and conversion channel. But the ambitions are bigger, and the capability is evolving so fast, the definitions of old are getting left behind.

How effective it is right now as a channel, is yet to be determined. A lot of the hype is about new and untested waters.

When I look to the future though, retail media is central to every media activation team's plan.

1st party data will also evolve beyond retailers - privacy and data regulation is affecting every aspect of digital marketing. Opt-in, data sharing partnerships where the customer gets equal benefits & rewards for sharing their data is the new norm. I noticed my Octopus energy account has introduced Nectar rewards the other day! And I use Expedia and eBay for the Nectar rewards, as well as with my petrol stations. To think that Nectar not only know my shopping habits in store and online, but also where I like to travel, where I live, what I eat, who I buy for (kids and cats) and how much energy I consume therefore how big my house likely is, how much I spend and can map me to ITV and Channel 4 as an audience (!?).

Banks, travel providers, phone companies, broadcasters - we're all subscribed. And as long as they reward us and get us to consent to share our data, the evolution of 1st party data brokers, retailer or otherwise, will continue to grow.

#retailmedia #commerce #connectedcommerce #advertising #partnerships #paidsocial #meta #amazon #snapchat

These views are my own, I always welcome a conversation, thoughts and discussion.