As retail media evolves, it provides brands with a unique opportunity to unlock value from data in an impactful way that protects privacy, say Google’s Raphael Hodes and Adrian Vallelonga.
For several years, we’ve been talking about the “new era” of digital advertising. With the convergence of privacy, AI and retail media, we are starting to see this era move from conceptual to reality.
Let’s start with the facts: the degrading of user signals (eg cookies), the rise of privacy regulations and the increasing consumer demand for privacy and transparency are all forcing us as marketers to rethink our approach.
We know that in this “new era”, first party data is critical. Much has been said and written about the imperative to build trust with your customers and collect rich, first party data. It’s more durable, consented and actionable. At Google, we agree and we’ve been advising and helping our customers and partners plan and activate first party data strategies for over a decade.
However, collecting data and driving business value are two different things. While the former comes with its own challenges, the latter requires an investment in technology and capability to activate and unlock the real value from customer data.
In practice, this needs to be considered holistically. What data can you realistically collect? What are the right data collection mechanisms and value exchanges? How will you manage consent? Which technologies will you use to reconcile and activate this data? And increasingly, what are the partnerships and platforms you will work with to augment and complement your strategy?
These are the questions that brands and marketers are grappling with. The emergence of retail media networks over the last several years adds another dimension, with tremendous opportunity.
Retail media networks and data strategies of the future
Against the backdrop of signal loss and privacy challenges, the retail media network (RMN) provides a durable and effective capability to complement and expand a marketer’s own data strategy.
According to a recent study by the Interactive Advertising Bureau (IAB), nearly half of respondents (48%) see the top opportunity of partnering with retailers as access to their first party data. Moreover, six in 10 marketers see retail media as a key part of their advertising strategy following the deprecation of third party cookies.
RMNs have unparalleled access to data, allowing for sophisticated addressable activations and closed-loop measurement. In a privacy-centric world built on trusted, opt-in data, RMNs stand out as a unique opportunity for brands to drive impactful customer connections across multiple touchpoints – onsite and offsite, online and offline.
However, once again, data alone is not enough. As with marketers, RMNs need the right technologies, capabilities and resources to scale and activate this data, thus realising its value for its brand partners. With the right strategy, alignment and execution, this can be a huge unlock for both brand and RMN growth.
Building for the future of privacy and retail media
For RMNs, building a data-driven, privacy-forward tech stack requires bringing together best of breed technologies in a cohesive way. Retail media is complex and there is no silver bullet. However, the right technologies and capabilities combined in the right way can pave the path to value in this emerging segment, specifically in the form of scalable monetisation, addressable audiences and closed-loop measurement.
Google is investing deeply in a number of technologies that will help RMNs and brands unlock this value while preserving and protecting user privacy. When it comes to RMNs and marketing more broadly, our message is simple: “Privacy is not at odds with performance”. Let’s take a look at a few examples to illustrate.
As we move towards the end of the third party cookie era, Chrome has been working closely with the industry and developers on the privacy sandbox initiative – a set of proposals designed to address the challenges of privacy in digital advertising. We’ve seen some early positive results and are working collaboratively with the industry to build on this.
Beyond the privacy sandbox, Google’s Customer Match allows the privacy-safe onboarding of hashed customer data, allowing addressable activation across Google’s extensive reach across YouTube, search and leveraging the best of Google AI through products such as Performance Max.
Additionally, for non-Google media, the recent announcement of Pair presents the opportunity for marketers and RMNs to onboard customer data and activate with publisher partners across BVOD, CTV and display inventory, with the peace of mind that data is only shared between the two parties with multiple layers of privacy protection.
Finally, Google’s advanced cloud capabilities, such as Looker and Ads Data Hub, enable advanced measurement and modelling, unlocking business intelligence and insights that marketers crave from their data.
We are rapidly accelerating towards a new world, where privacy and AI change the way we think about marketing. Retail media is right in the middle of this exciting evolution, with a unique opportunity to unlock value from data in an impactful and privacy-preserving manner.
There is still a lot to learn and a lot to solve. However, with the right technologies, resources and attitudes, the industry has an opportunity to learn and create together.