One day, who knows when exactly, marketers will no longer be able to rely on third-party cookies. But why wait? It’s time to get ahead of the game, says Xandr’s Thomas Jones.
Despite Google’s repeated delays to the deprecation of third-party cookies on its Chrome browser, forward-thinking marketers have already started to explore alternative ways to target and measure their ad campaigns – ways that don’t depend on third-party cookies or personal identifiers.
This shift has pushed large retailers into the spotlight since they are sitting on a treasure trove of audience data. Every time a customer makes a purchase online, every time they swipe their store loyalty card, the retailer can record what has been bought. In a world where marketers are facing restrictions to tracking customers’ behaviour online, this retailer data has become extremely valuable for brands who want to run targeted ad campaigns.
For example, let’s suppose that a fizzy drink wants to work with a large supermarket to create a campaign for its diet flavour. The brand wants to make its marketing spend more efficient by only targeting customers who are on a diet. The supermarket can analyse their customer purchase data to find all of the customers that have recently purchased diet foods and then can make this data available and charge the brand for the privilege. What’s more, at the end of the campaign, the supermarket can provide the client with conversion attribution data to assess the campaign’s performance.
Another example might be a brand wanting to target people that used to buy their products regularly, but have recently stopped, with a ‘buy one get one free’ offer. Again, the retailer can provide the data needed to underpin, deliver and evaluate that campaign.
It is therefore not surprising that a number of organisations have already successfully made inroads in the ‘retail media’ space with a significant portion of their revenue now coming via this business model.
Retailers get onboard
Retail media networks are not a new thing, but like everything else in marketing, digital has taken it to a whole different realm. Over the next five years, BCG estimates that the retail media market will grow by 25% per year to $100bn to account for more than 25% of total digital media spending.
For retailers keen to lean into this trend, the road ahead may seem difficult; building a retail media proposition from scratch can be a challenge for anyone who doesn't have an army of software engineers to build a platform and work on integrations with numerous Demand Side Platforms (DSP) and ad tech platforms. Fortunately, ad tech platforms already exist which can do all the heavy lifting from a technology point of view, allowing retailers to leverage the retail media boom with limited investment on their side. And a truly future-proofed solution for retailers will be to build their retail media business on the open web.
This model has obvious benefits for the retailer, the brand and the customer alike. Retailers have the opportunity to deepen their relationship with brands, from a purely transactional relationship to a meaningful two-way strategic partnership. Retail media also opens up a whole new, low-margin, high-value revenue stream for retailers.
Meanwhile, brands gain targeted, measurable campaigns, providing a depth of customer insight no longer available to them elsewhere. Last, but by no means least, consumers benefit from personalised offers in a respectful, entirely privacy-compliant way, delivered in a context that makes perfect sense to them.
As with all things ad tech, retailers need to evaluate the variety of tech platforms that are out there competing for their business. Once the retailer has decided on their identity solution and decided to create their own retail media platform, they then need to kick off a new set of conversations with brands. These conversations should be focused on partnerships that allow brands to deliver data-enabled personalised products to the retailer’s audiences, tailored and measured against the brand's key objectives and KPIs.
With the right tech, retailers can retain control of their first-party data assets while monetising it on their own terms. End-to-end platforms provide retailers with direct connections to publishers and a customisable buy-side to ensure a 360 view of the process.
In addition to allowing brands to run data-informed ads on the retailer’s site and app alongside in-store promotions, the open-web-retail-media model allows retailers to run brand advertising outside of their own digital estate, giving them authentic options on how best to leverage their valuable first-party data for brands online.
Looking at an end-to-end ecosystem with direct connections to brands and publishers, customisable buy-side platforms and extended measurement and attribution capabilities will put retailers in good stead to tap into direct, first-party partnerships with their target audience.