Focus: Retail Media

The Promise of Retail Media

KROGER PRECISION MARKETING EXECUTIVE DISCUSSES THE FUTURE OF RETAIL MEDIA AND MEASUREMENT — AND HOW EVEN FIRST-PARTY DATA GETS OLD.

BY CYNDI LOZA

October marked the five-year anniversary of the launch of Kroger’s retailer media network, Kroger Precision Marketing (KPM). The Path to Purchase Institute recently chatted with Cara Pratt, senior vice president at KPM, to discuss the state of retailer media networks, data and measurement, and advice for marketers getting into the retail media game.

P2PI: You helped launch KPM in 2017. What was it like in the beginning versus today?

Pratt: The world has changed in fi ve years. People shop diff erently, work diff erently and consume media diff erently. We started our retail media off ering as a small, passionate team with expected retail media products. Today, we have hundreds of colleagues infl uencing a suite of top-rated, full-funnel retail media solutions that thousands of brands are investing in to deliver business impact. Our media capabilities touch every point of the shopping journey — most recently adding programmatic connected TV (CTV) into our self-serve portfolio.

P2PI: Considering the rise of e-commerce grocery adoption, fueled by the pandemic, and Google’s plan to end third-party cookie tracking, is retail media just table stakes now for brand marketers?

Pratt: Yes, retail media is foundational for marketers. It goes beyond the digital shelf, which is increasingly important — even for infl uencing in-store sales — and into infl uencing equity and inspiration off retail properties. Put simply, retail media is shaping new and higher performance standards in brand advertising. Marketers have always wanted their advertising to be more eff ective and less wasteful. Now, retail media makes that possible by infl uencing the right households and then measuring sales impact. You can strike the right balance for media effi ciency and eff ectiveness — and now more than ever, it’s critical to do so.

P2PI: Limited access to data and reporting is the biggest challenge brand marketers are facing with retail media. Do you expect this to improve or will it be dependent on the network?

Pratt: It will vary depending on the capabilities of the retailer. There is a reason eMarketer has declared retail media as the third wave of digital advertising, and that’s because of the accountability we can bring forward assessing media impact. No doubt there’s an opportunity to establish standards for measurement practices centered on business outcomes (i.e., sales incrementality and household penetration gains) as an important bridge beyond the media metrics evaluated today.

We have been focused on infl uencing this change and elevating practices in the industry since we launched KPM fi ve years ago. With our popular loyalty program that connects to 96% of sales, we have a rich view of consumer behavior and a direct way to measure impact of advertisements. For example, marketers using our programmatic private marketplace receive daily sales results so they can optimize campaigns against in-store sales. The connectivity with brands will only get better from here.

P2PI: Can you share some campaign success stories? What are the ingredients needed to create a great retail media campaign?

Pratt: What has been exciting for us is seeing how our data science can be applied to helping brands grow beyond existing shoppers. For example, today 42% of people clicking on Kroger product listing ads are new to the brand. And the impact of our data science extends beyond our own e-commerce property. We’ve been working with Roku for over two years — allowing advertisers to tap our data science for audience targeting and measurement. On average, advertisers using our data on Roku see a 5.7% median sales uplift and 8.1% median household uplift.

As for ingredients, it’s important to recognize that not all data is created equal. Even firstparty data gets old. Data can be narrow, stale, unstructured. It’s important to have highly curated and collected data in standard formats that is current, expansive (spans categories, brands, attributes) and predictive. It’s equally important to have strong practices in how data is analyzed; humans can’t decipher the best combinations of variables — machine learning is necessary.

Editor’s Note: The full, extended version of this interview is available on P2PI.com. And be on the lookout for our new video series, “Retail Media Unplugged,” debuting in 2023!