The Next Frontier in Retail Media Is Audiences

Search in retail media is king today, has been for some time and will continue to be for a while. But every good story has an up-and-comer, and in our relatively new world of retail media that new kid is first-party data.

We are beginning to leverage first-party data provided by the retailers themselves, which is a big deal because it’s quite useful in helping brands move up the funnel in a more deliberate and targeted way than we’ve been able to with the traditional media options offered to us by our retail partners (e.g. search). 

Think of search as allowing for the harvesting of existing demand to those roaming up and down the aisles of a supermarket. Think of first-party data as inspiration—a tap on the consumer’s shoulder to remind them of something they need or something new that they didn’t even know they needed.

I’m not talking about what has been thought of as first-party data in the recent past—namely, the pre-packed audiences assembled by retailers, giving brands access to what they were willing and able to offer at the time. The problem is there hasn’t been a ton of transparency for brands. It’s been hard for them to track progress in a timely manner; pacing is slow, and the eventual, long-awaited wrap report is often executed by the retailer in a somewhat black-box type of environment.

That’s all changing as we move more into self-service options with mature platforms like The Trade Desk and Xandr, where advertisers have direct access and control to plan, select and execute on campaigns. Brands now have the ability to layer in or supplement retailer first-party audiences with third-party data from the demand-side platform (DSP). They can even bring in their own first-party data to extend reach, de-duplicate and measure like never before.

So what do we need to do as marketers to take advantage of the ability to hone in on audiences? Today, we’ll focus on the endemic offering—using retailers’ first-party data and audiences to drive off-site traffic to specific brand pages on retailer sites. 

Step 1: Research 

Before launching into research, I humbly recommend my previous article on retailer loyalty programs, because this is how a good-sized chunk of first-party data is gathered. Even more importantly, it’s how retailers can close the loop on purchases and measure exposure online to an offline experience. 

The preliminary research you need to do falls into two buckets: pretty easy and not so easy. Start simple—you’ll need to take inventory on what first-party data your brand has, what the retailer has, how they gather it, and what has been made available in the self-service platform. Not all the information is going to be accessible in the way you might imagine it. For example, some data sets are likely too small (such as paid subscription programs like Walmart+ members) or purchasers during a short time period. 

The complexity ramps up when it comes to assessing whether you need additional tools, such as audience research or shopper marketing research like Circana (formerly IRI) or SimilarWeb, and whether you need specialists in-house or assistance from a research tool that can dig through those platforms and know what to look for based on your goals.

It can also be a challenge figuring out how to reach the precise type of shopper you’re looking for via a retailer. In fact, you’ll need to assess whether this is the right retailer to find your ideal audience at all.

Step 2: Planning the campaign 

Now that your research has given you the answers you need to start planning, you’ll want to assess the retailer’s audience segments to see what is actually available to target.

If the retailer has a specific partnership, like Walmart and The Trade Desk, it simplifies the process of where you’ll activate your campaign. You’ll be looking in The Trade Desk to figure out what is available from Walmart in terms third-party audiences and segments you can add to extend reach (but also at lower CPMs) to put together that campaign, whereas retailers like Target and Kroger allow you to choose the DSP of your choice for activation. This means you’ll need to determine whether to use The Trade Desk, Xandr, DV360, Yahoo or another vendor—which is another decision tree to climb.

Part of your decision will be predicated on rates and access. If you already committed to a certain DSP, that’s likely the route you will go. That usually means you have the potential to win negotiated rates or can build up media spend to get to a large enough book of business to negotiate rates. If you’re working with an agency, they often already have this rate negotiation baked in due to their scale, so be sure to check out what each DSP’s rates are before making your decision. 

And last but not least, you have to set the goal for why you’re doing this campaign—hopefully not just return on ad spend. We’re moving up the funnel after all. Consider new-to-brand, new-to-retailer halo sales (for example, buying from the same brand but a different category) and holistic sales lift overall during the campaign duration. 

Step 3: Activation

Now the fun part. You’ve done your research, you’ve chosen the platform, picked audiences, loaded first-party data (either the retailer’s, yours or both) and have created the campaign, set to launch. Before you hit that “Go!” button, be sure to check a few things.

Billing is tricky. There are fees to be mindful of: tech fees, media fees, agency fees and so forth. Your total budget will need to be inclusive of those fees. Your working media dollars will therefore likely be less than you thought. Also, you’ll want to be clear on what invoices are going where and to who. 

If supporting in-store products, be sure that there is product in stock and with strong distribution. You’d think this would go without saying, but remember, in-store inventory levels are not tied to DSPs.

Double- and triple-check those settings: Make sure pixels, tags, access and everything else you need to track performance is good to go.

Step 4: Measurement 

Based on your goal and audiences selected, you should have a good idea of what KPIs to track. With the use of more mature platforms like Xandr and The Trade Desk, reporting and inputs are solidly available in-platform for you to track and pivot if needed. You’ll also be able to parse performance by creative to inform future campaigns as well as iterate on the current one. Again, depending on your campaign goals, you’ll be looking at different reports to determine whether success is happening … or not.

If your focus is online exposure to end with an in-store purchase, you’ll also want to look at your own internal reporting from the retailer to see if there was any detectable lift. With some retailers you’ll get that in-store reporting lift, but it’s also important to gut check that with your own numbers and, no matter how hard everyone tries, accept that you won’t capture every sale.

If you happen to have had previous campaigns managed by the retailer, you’ve technically got a head start, so take advantage of it! Definitely re-review those wrap reports and aggregate learnings at the audience level. Also, review targeting types like contextual and propensity to inform your self-service efforts. 

Search will always be present as part of your media mix—it’s foundational to our finding what we need on any given site. But as we grow our capabilities in retail media, providing discovery of new products, services or styles at the point of purchase is a powerful new tool.