For any retailer with an online strategy, 2020 was likely a year of growth.
But, outside of merely retail itself, retailers also now have a big new opportunity – to become advertising platforms.
Over the last year or two, Target, Walmart and CVS have all launched their own media networks.
In this video interview with Beet.TV, Bryan Wiener, CEO of retail analytics provider Profitero, explains what happens when big retailers become media providers.
Brands as platforms
“I think they’re the ad platforms of the future,” Wiener says. “The retail media platforms in aggregate are going to be enormous forces in the space. They have the audience, they have incredible data and they’re bringing actually the promise of what we’ve been trying to do for 25 years… which is tying advertising to an actual point of sale.
“You have this perfect closed loop, you can tie it right to the point where someone is making a transaction on a retailer.”
But Wiener doesn’t just think the transformation of retailers into media powerhouses is an opportunity – he thinks it’s a necessity.
“The retailers have no choice, but to make this work because they need it in order to compete,” he explains.
“One of the dirty little secrets is, while e-commerce is growing dramatically, it is far less profitable than brick and mortar. So they need other mechanisms to do this. They have to tap into these larger consumer ad budgets.”
Whilst the world goes crazy, ecommerce is booming.
But Profitero’s Wiener isn’t just seeing the sales volume, he is also seeing the customer expansion.
“The bigger aspect is that customers have tripled,” he says.
“This pandemic has gone on so long that the research clearly shows that, when it is over, it’s not going to go back to the way things were.
“It’s made developing a retail media platform absolutely essential for every retailer that wants to stay in business.”
Connect stock and ad data
All of those trends make operational efficiency proportionately more important.
Wiener says ad agencies are sometimes guilty of throwing their clients’ money away by buying ads for out-of-stock products, because the two datasets are disparate. He says the two sets of data need to be more closely aligned.
“Most of those brands … have agencies that are actually doing the service and the media buying,” he says. “They don’t have access to the analytics that would actually increase performance.
“Out-of-stock has been a huge issue this year. (The ad buyer) may have a wealth of targeting data but, if they use that to buy (an ad for) a product that’s not available, that’s literally throwing money down the drain.”
Profitero is offering to integrate its product-level retail analytics with ad-tech platforms, and has partnered with ad agency holding companies to make the data available.
Wiener says he was recently contacted by a CEO who used the tactic to great effect.
“His company used our data on their direct competitor,” he explains. “When they found out that certain products were out of stock, they targeted their ad media on the retail platforms towards conquesting those out-of-stock items – and their sales went through the roof.”
You are watching “First Party Data: Driving Media Investment and Accountability,” a Beet.TV leadership video series presented by Target’s Roundel For more videos, please visit this page. The views shared on this series do not necessarily reflect the opinion of Target and Roundel.