· By Alona Elkayam
Marketing’s New Darling, Retail Media
Beth Ann Kamnikow, global CEO, VMLY&R Commerce
Travis Montaque, co-founder and CEO of Group Black
Patrick Gales, SVP, Infillion
With the death of the cookie, advertisers have been scrambling for another way to get in front of customers in a personalized way and RMN’s from big retailers with large customer bases are an easy sell.
Companies can now buy into large retail media networks (RMN) like Amazon, Walmart and Target (Roundel) who have leveraged their first party data to create advertising platforms across online and in-store channels that allow brands to be seen by humans who are already in shopping mode. They offer advertisers online and in-store formats like display, onsite search, recommendation engines, and in-store radio.
If you have been on Amazon lately, you’ve been served ads from advertisers who are using their RMN to target behavioral, lifestyle, contextual, remarketing, audience lookalike, or advertiser audiences which Amazon provides in an anonymized way.
Retail is a ‘new centre of gravity for brands,’ says Beth Ann Kaminkow, Global CEO, VMLY&R Commerce, at the Cannes Lions Festival. Retail media networks (RMN’s) are marketers newest darling.
But RMN’s aren’t a silver bullet, yet. The discussions around RMN’s are happening largely in a vacuum. The marketing and advertising industry has made noticeable progress with regard to customer-centricity, diversity, omnichannel (including web 3), and brand experience. As a nascent advertising channel, could incorporating the progress made into retail media be the catalyst to disrupt the ecommerce market (14% of total retail sales in the US compared to China’s 46% of total retail sales)?
Let’s look at how the progress we’ve made in diversity, web 3, and customer centricity can be weaved into retail media.
The marketing and advertising industry has made notable progress the past two years in making brands more human. External forces in the world like the pandemic and diversity have moved brands to be their best, putting people over profits because Millennial and GenZ consumers demanded it. 80% of GenZ and Millennials rely on brands to solve societies problems like racial and gender inequity. Advertisers have listened, creating brand experiences reflecting consumer values, most urgently the need for diversity in every area of American culture, by investing in diverse creators, employees, and media.
How advertisers maintain the promise of diversity using retail media as a model?
Advertisers can expand their commitment to diversity, for example, by Investing in more diverse creators, and expanding those relationships beyond social media and brand awareness, into end-to-end influencer relationships that include retail media.
Group Black, the largest collectives of Black-owned media and diverse creators, founded by Bonin Bough, Travis Montaque and Richelieu Dennis, seeks to increase the investment advertisers are making into black creators and media brands. “Black creators drive culture in a big way,” Montaque said. And he is right. Our culture has been informed by black culture in immeasurable ways. (Ahem, the name of our company, Far From Timid, is a hook from Notorious BIG’s song “Sky’s The Limit.”)
Target has introduced the Roundel Media Fund, which ‘will award more than $25 million in paid media to diverse-owned and founded brands by 20252. All RMN’s should follow suit.
An astounding 74% of consumers begin their product searches on Amazon .1 While Amazon has taken diversity seriously by featuring black-owned brands on the platform, investing in black-owned brands could make lasting impact.
Web 3 Retail Media
In January 2022, Walmart filed two VR shopping-related patents that describe a system where users put their VR headset and haptic gloves on for an immersive in-store experience–no matter where you are or what time it is. Other e-commerce players from Amazon to Alibaba are also gearing up to ride the Web 3 commerce wave. IKEA is using mobile-based augmented reality that can map digitally replicated furniture in your living room.
The case for investing in Web 3 retail and retail media experiences is two-fold:
- Closed Loop: RMN’s provide advertisers need for closed loop experiences so they can track their campaign investments. Closed loops are built into Web 3 with smart contracts.
- User Privacy: The Spatial Web’s use of blockchain in its data layer ‘allows users to own and authorize third-party use of their data,’ and ‘holds extraordinary promise to slash not only data breaches and identity theft, but covert advertiser bombardment without your authorization.’
The metaverse discussion in the advertising and marketing industry is so muddled, but the metaverse is not only here, but it is happening. $100 billion was spent on virtual goods in gaming platforms and $40 billion was spent on NFT’s for all of 2021 1.
Perhaps one of the greatest promises of Web 3 retail is rewarded advertising for customers. Let’s say you join Target’s 3d constructed supermall in the metaverse and get (NFT) tokens for joining. Then you interact with a virtual Nike sneaker ad, you get another token. These tokens can then be redeemed.
The tokens also have built-in smart contracts that can be updated with new utility every week to accommodate the retail media environment from sweepstakes to promotions. The vision is that AI powered metaverse will usher in a new level of personalization with privacy not possible in Web 2.
Infillion, a technology solutions company that helps unify the customer journey is developing a solution for Web 3 retail. Patrick Gales, SVP Inflillion explains, “What we’re building today are experiences for users that will allow for … alternatives to a pay wall or wallet, where you can start earning tokens and then make purchases within these virtual worlds.”
Customers want an easier way to shop online and Web 3 allows for retailers to meet their needs by combining some of the best static and dynamic elements from Web 2 with the immersive technology and user privacy protections of Web 3.
Ad tech’s ominous reputation due to brand safety issues (relevancy) and data integrity (false reporting) could improve if ad products weren’t still designed to serve the brand disproportionately over customer experience.
Great strides in brand safety and data integrity have been made recently using blockchain, improving the reputation of ad tech, but that is the tip of the spear.
When Google first announced its decision to phase out third-party cookies in January 2020, the Association of National Advertisers released a statement. In it, they expressed their "deep disappointment" with Google's decision and acknowledged fears it would "significantly" disrupt the advertising industry.1 The ANA were up in arms that consumers, the people that buy things from the people they represent, wanted their privacy.
At Cannes Lions Festival 2022, Sheryl Goldstein, EVP, Chief industry Growth Officer of IAB (Interactive Bureau) shared that “There are now chief privacy officers, legal and policy people in addition to the traditional marketing, digital and media roles at the table.” Let’s put Ms. Mary from Kansas, a Walmart shopper, at the IAB table, too.
To be fair, 52% of online shoppers don’t mind offering up their personal information in exchange for personalized offers. Millennials and GenZ, in particular, don’t mind advertising, as long as it connects to their values like diversity and sustainability.
Why not design retail media products with consumers in mind and make customer centricity a reality in ad-tech starting with retail media?
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Far From Timid is helping clients develop omnichannel customer journeys that include retail media and ecommerce experiences that connect brand and performance marketing. Book a 30-minute brand therapy session to learn more.
Far From Timid covered Cannes Lions 2022 for our Honey Pot magazine and pulled together the top themes we think brands need to prioritize, supported by quotes we heard (and read) at selected sessions from the brands and agencies that inspired us. Then we mashed them up to create cross conversations because ideas cannot happen in a vacuum. For example, we can’t just talk about diversity on its own. We need to talk about diversity as it relates to media buying. Finally, we feature the “truth-bomb” takeaway insights and the award-winning work connected to each part of the series because we can’t make progress if ideology isn’t practiced.
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