Janne: Retail Media has been a hot topic in marketing in the past couple of years. The most common example of retail media in action would be Amazon’s sponsored products: when you search for an item in the marketplace you’ll first see sponsored products paid by the suppliers. This is happening also in other marketplaces on the internet but also in brick & mortar stores.
During the years in Doohlabs we’ve talked to numerous retailers in the field. They often point out that while they have a growing number of customers on their websites and mobile, they still have tenfold of them in their stores.
This makes the digital screens the retailers have in their stores a very important channel for brands to reach consumers. Another important advantage the retailers have is the data. Retailers know their customers inside out. They also know which ads have been shown when products have been bought and can optimize the advertising accordingly. This is called closed-loop advertising.
How do you Tiina see this megatrend?
Tiina: When perceiving this new field from the media's perspective, it is really intriguing - be it online or in-store advertising.
If you for example look at this as an advertiser and you want to cover a consumer’s whole media day - the retail media has a very important role. If you compare this channel to TV or print advertising - the consumer is most likely home when seeing the commercial and not where the purchase decision is made. In brick & mortar or in a webstore the consumer is where the actual purchase decision is made. In physical stores even more so - as websites are often used for research and comparison.
Janne: We in Doohlabs have concentrated on in-store retail media. In practice, we help retail to monetize their audiences with those digital screens they already have in their stores and at the same time enable a business model for creating and operating new networks profitably.
There are some special features that separate in-store retail media from online retail media. The advertising on screens inside a store has earlier been seen just as an extension of digital out-of-home advertising. Recently it has rapidly started to evolve as a distinct separate business area in which the focus has been on the effective utilization of data the retailers have.
Another thing that is good to understand regarding in-store advertising is that browsers are not used on these screens making targeting with cookies (or similar) obsolete. The targeting is for audiences, not individuals. The technology, in general, is a bit different online which means that you need to have some special skills in building and operating the networks.
When you Tiina have researched this field with us what kind of observations have you made?
Tiina: I see a lot of opportunities for both publishers and advertisers.
I do observe this from the point of view of online advertising. It has been largely refined in the last 15 years- starting from inventory structure.
When you now look at this retail media field you can clearly see that there are still areas that have not been optimized at all yet. That means great opportunities for retail, advertisers, and all other actors in this field.
Janne: How do you see retail media as a part of advertisers’ media mix? Does it consume other channels' budgets?
Tiina: I do see that there is also room for retail media in advertisers’ budgets. Omni-channel benefits can not be denied. If a consumer sees the brand in various channels during the day the result is always better.
Brands always have to make choices on channels. It all boils down to the fact that they eat each other. But you have to understand that this isn't a zero-sum game in a way that favors one channel always punishes another - it is the ensemble that counts and defines if the channel decisions have been successful.
Janne: In retail media, retailers are able to monetize their audiences in various ways. Firstly, they can naturally optimize and target their own product advertising for their clientele. Secondly, they can open up the audience inventory for trade partners and suppliers through self-service.
The third way is the actual media sales where retailers sell either by themselves or with a partner to their audiences to all advertisers. This direct media sales is linked also to programmatic advertising on which there has been a lot of talk lately especially when looking at digital out-of-home as a whole. How do you see the state of programmatic in this field at this stage?
Tiina: First of all, media buying in general as a trend is moving from human-to-human interaction to buying and selling between systems. When this type of megatrend is moving, no area of media selling and buying will be left out.
But where we are now - I see this as a kind of a re-run from the “traditional” programmatic advertising. At this point, we see a lot of talk around the topic of programmatic DOOH and you could interpret this in a way that it has advanced quite considerably. But as I have now interviewed with Doohlabs a lot of actors in the field and the truth seems to be - with both technologies as well as platforms - that we are still very early in the beginning.
So, this is still not the time that publishers should be worried about being late. But if I were a retail media publisher, I would start getting my organization ready for the diversification of the ways my media will be bought and sold. The change - when it happens - can be a very quick one. In the end, this all boils down to the moment when one of the main players will free its inventory for programmatic. After that, the rest will follow.
At this point, I would gather around my partners that have a genuine and realistic understanding of programmatic media sales and would start practicing the transition in stages so that the actual move would be as easy as possible when it comes. The ways of working will eventually be a lot different as things are done at the moment.
Janne: How do you see the development of programmatic & retail media from advertisers’ perspective?
Tiina: It is an interesting combination. Media buyer is interested in efficiency, transparency, and results and programmatic will provide possibilities with all of these. Utilizing the unified buying channels will align operations and provide a real-time omnichannel view for buyers enabling the utilization of the detailed retailer data in targeting.
The real-time operations enabled by programmatic in a channel where consumers are in practice on their way to the POS will provide advertisers efficient ways to upsell and cross-sell and create a need for consumers to try and test something completely new.
At this point, the offering for programmatic DOOH is really restricted. The big demand will emerge when all buying models are in use. At this point, DOOH and retail media in-store can only be bought by deals. In programmatic, a very important part is the possibility to offer open auctions. And that is only just coming.
Just to clarify: in the programmatic world, you have two distinct ways of doing business. In the first one, the seller will collaborate with a buyer in a closed auction with very restricted rules on what is bought and sold. The other one is an open auction in which anybody can join the process. And this is of course a very tempting model for a seller as it is possible to reach buyers the traditional means of your sales team are not able to reach.
Janne: And what it comes to in-store retail media in general - the accelerating monetization of audiences is happening as we speak by retailers' own sales teams and by their sales partners.
In a year or two, we will see explosive growth in retail media both online and in-store and also we will see interesting new retail media networks born to cater to advertisers in need to reach even more granular target groups just at the right time and place.