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Why we care about retail media networks

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Why we care about retail media networks

Retail media networks are a hot new thing that’s been around for decades. Its roots go back to brands putting ads on store end caps and paying for placement in retailers’ weekly fliers. But, like everything else in marketing, digital took it into a whole different realm.

Simply put, these networks are a platform which lets brands buy advertising on a retailer’s website, apps and other digital properties, including in-store. More importantly, it also lets them run ads on the open web. Retailers that partner with media companies offer brands the opportunity to expand their reach and improve targeting with the use of in-depth shopper data.

What was once a staid addition to marketing campaigns is now a major focus of brands and retailers. 

“We want to create more meaningful intersections between our partners and customers,” says Charlene Charles, head of Dollar General’s DG Media Network Operations. “A brand wants to engage with the customer and give them the best cereal or the best personal care item. We want to reach those hard to reach customers in rural America … making sure that we get [them the] brands and products they want, need and desire. It’s really core to our overall pursuit to serve our communities and our customers, but now we’re doing that through a different channel.”

What makes retail media networks valuable?

Dollar General is a great example of what makes a retail media network valuable. It has a deep relationship with consumers who are difficult to reach through other channels. Of the chain’s more than 18,000 stores, 75% serve markets of 20,000 or fewer people. Because of this, it can provide brands with hard-to-get, first-person consumer data. That’s the kind of unique reach brands want.

“When you look at impression volume and delivery what ends up happening is it’s concentrated in major mass-market urban areas,” says Charles. “However you’re not capturing everyone, right? And because we have identified and can reach 90% of our customers through paid media, we are extending reach that’s unduplicated in rural areas.”

Read next: Marriott launches its own media retail network

In return, DG gets to provide customers with offers they want to see and discounts they might otherwise miss – further strengthening the relationship. It also gets one other thing: money, a lot of money. 

While DG doesn’t break out how much they are earning from its media network, it’s likely quite a bit. Walmart’s network, Walmart Connect, is responsible for 12% of the company’s profits. One-quarter of retailers are generating more than $100 million in revenue from their media networks, according to Forrester. That’s made these networks a game changer for many retailers – and a potential lifeline in a worsening economy. Retail profit margins tend to be slim – in the 3% to 4% range. The margin on ad sales is usually 70% to 90%, according to BCG. And sales are very good.

According to MediaRadar:

  • In the eight months from May 1, 2021 to the end of January in 2022, more than 23,500 companies bought ads on retail media networks. 
  • 14% bought ads every month; the retention rate from December to January was 59%.
  • 24% of the companies advertising in January 2022 were first-time buyers. 

Furthermore, the retail media market will grow by 25% per year to $100 billion over the next five years and will account for over 25% of total digital media spending by 2026, according to BCG. Also important: This is new revenue for retailers. Per BCG: 60% to 70% of the projected $100 billion in 2026 retail media revenue will be net new spending over and above historical trade dollars. 

What’s in it for brands

The value of retail media networks to brands goes well beyond first-party data. They also make it easier to tie ad spend to sales. An online ad and the point of sale are so close together, it’s much easier to connect a purchase to a specific ad and action. This provides essential data for strategic decisions like resource allocation. It also provides essential data in the never-ending quest for ROI. 

That said, not everyone will strike gold with this. For retailers, these networks require technological infrastructure and expertise few have.

“If you’re a retailer and want to enter this space, you have to really understand that it’s crowded now,” says Matt Feczko, vice president for product management at Epsilon, a retail media solution provider. “It’s very competitive and you have to ask yourself, ‘Do I have the data to do this? Do I even have the people or technology?’”

For brands there are several different challenges. One is integrating with a new media network: How do they do ad sales? Is it something your existing tech can easily work with? Another is being sure the retailer’s data is what you need. Does it have a unique reach? Does it have the depth and granularity that will make it useful? 


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Retail media networks have turned retailers into ad moguls. That’s a huge change and nobody yet understands all the implications of it. They are also spurring a lot of innovation as marketers rush to capitalize on them. While much of that is online, it’s also happening with in-store advertising.

“It used to be that in-store was just printed things, like end caps where it’s just a big standing thing,” says Feczko “Now it’s moving into this interesting digital space like cooler screens.” 

Earlier this year, Walgreens introduced a display screen for coolers which shows an exact digital image of what is in the cooler – as you can with clear glass. However, it also runs an ad or offer for a specific brand while the customer is deciding what to buy.

If there’s a downside to the popularity of retail media networks, it’s the chance that they could grow in number to the point where the amount of inventory outstrips demand. Currently, however, they are proving a boon for marketers and retailers alike.


About The Author

Constantine von Hoffman is managing editor of MarTech. A veteran journalist, Con has covered business, finance, marketing and tech for CBSNews.com, Brandweek, CMO, and Inc. He has been city editor of the Boston Herald, news producer at NPR, and has written for Harvard Business Review, Boston Magazine, Sierra, and many other publications. He has also been a professional stand-up comedian, given talks at anime and gaming conventions on everything from My Neighbor Totoro to the history of dice and boardgames, and is author of the magical realist novel John Henry the Revelator. He lives in Boston with his wife, Jennifer, and either too many or too few dogs.

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For a Better Long-Term Content Strategy, Find a Purple Audience

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For a Better Long-Term Content Strategy, Find a Purple Audience

“The stock market is not the economy.”

When the stock market is up, it doesn’t always follow that the economy is great. When the stock market crashes, it doesn’t always mean the economy is bad.

That’s as true today as it was 25 years ago when I first got into marketing. And it’s a great reminder to avoid basing business decisions on faulty connections.

Over the years, I’ve learned an adjacent lesson about content and audiences: Popularity isn’t a sign of differentiation. People don’t necessarily regard what is popular among online audiences or the media as high quality – or even true.

If you successfully chase trends and feed popular content to audiences, you have not necessarily differentiated your content. On the other hand, differentiating by taking a contrarian or highly niche view of what’s popular doesn’t always work either. How do you blend popularity and differentiation?

#Content popularity isn’t a sign of differentiation, says @Robert_Rose via @CMIContent. Click To Tweet

Red and blue ocean strategies

In their 2004 book, Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne explain red and blue ocean strategies for marketing. Red oceans are crowded markets where popular products abound and cutthroat sales and marketing strategies rule. Blue oceans are undiscovered markets with little or no competition, where businesses can create new customers or die alone.

In strategic content marketing, most businesses focus on the red oceans – offering short-term, hyper-focus feeding. They look to drive traffic, engagement, and conversions by getting the most people to consume the content. So a red-ocean strategy focuses on topics and content that have proven popular with audiences.

But this strategy makes it difficult to differentiate the content from everyone else’s.

This myopic view of content often prohibits testing the other side – investing in a blue-ocean mindset to find and create new audiences with less-popular content.

Short-term, hyper-focused #Content feeding often prohibits the mindset of creating new audiences, says @Robert_Rose via @CMIContent. Click To Tweet

Finding a blue niche in a red world

I recently worked with a financial technology company that provides short-term loans to small businesses experiencing a cash-flow crunch. It’s as sales-driven as any team I’ve seen.

When they started, they put much of their marketing and content efforts into a blue-ocean strategy, targeting small businesses that will need a loan within a month.

Here’s where it gets interesting.

Five years ago, this company wasn’t the only one to recognize the massive opportunity in fast, easily accessible, short-term lending. A red ocean of new customers who needed these loans grew in a relatively robust economy (and historically low interest rates).

The value of these loans grew from $121 million in 2013 to just over $2 billion in 2018. And competition for this audience’s attention grew, too. As short-term, low-funnel content on accessible lending saturated the market, this strategy became less and less successful because so many fintech companies pursued it.

My client’s team knew they couldn’t only count on this red-ocean audience for new business. They recognized the need to invest time in building a new audience – larger, more established, long-term borrowers.

This audience wouldn’t produce immediate lead generation. But the company wanted to diversify its product line and better support the new audience’s loan-related needs.

The genius of this strategy was teaching, targeting, and building demand for new ideas from a niche within the red audience. Put simply: They created a purple audience by targeting a blue audience within the red one.

The blue audience the team targeted consisted of fast-growing smaller businesses that would soon evolve into established, long-term borrowers. These businesses might want to know the benefits of the short-term availability of cash. The team focused the new learning content platform on teaching companies that don’t need a loan now about the benefits of having a solution at the ready when they do.

The purple audiences took time to develop. But when those audience members entered the red ocean, my client company stayed top of mind because it had bucked the popular trends and offered completely different content.

3 triggers for targeting purple audiences

Deciding to invest in cultivating a purple audience requires some thought. These three considerations can prompt the move to a different audience hue.

1. You’re ready to hedge bets on current efforts

So many companies double down on their content to the point where their strategy incorporates the same content at every stage of the customer’s journey. Why? Because everybody is talking about it.

I see some B2B marketing organizations deliver the same “why change” thought leadership content to prospects as they do their customers. Shouldn’t your customers’ needs and wants change after they purchase your solution?

Developing thought leadership you believe is important but current audiences aren’t yet thinking about can be an excellent hedge.

You shouldn’t deliver the same thought leadership to prospects AND customers. After all, your customers’ needs and wants should change after they buy.

2. You believe the consensus is wrong

Many companies fold their content marketing like a lawn chair because their content goes against the consensus. Last week, a chief marketing officer told me, “Our CEO says we can’t go out with that thought leadership message because people will disagree with us.”

You don’t have to invest the entire budget in a contrarian idea. But if you genuinely believe the world will eventually come to your point of view, build the content infrastructure that supports that opinion and experience a multiplier on the investment.

3. You see an opportunity to steal audience

Look at the most popular content, and you see all your competitors fighting over the eyeballs seeking that topic, trying to outrank everyone on search, and fighting a red ocean of potential audience members. Then, look up and ask, “What’s next?”

You might see a slight trend. Or, as my fintech client did, you may notice a niche blue audience in the red audience. Investing in that content can pull audiences from the popular content into your fledgling purple audience.

SAP’s content site The Future of Customer Engagement and Experience illustrates this concept. During the pandemic, the team, led by Jenn Vande Zande, adjusted its editorial focus to steal a segment of the red-ocean audience seeking COVID-19 coverage. Jenn and team designed the content to appeal to people looking not just for lockdown news but also for the most up-to-date practices and industry information for businesses on customer experience in the COVID-19 era.

SAP created a purple audience.

Get colorful

As a marketer, you should think about new audiences. How can you address them with content that may not be widely popular now but can help them better prepare for what you believe is coming tomorrow?

That’s a better question to answer for long-term content marketing success.

Get Robert’s take in just five minutes:

Subscribe to workday or weekly CMI emails to get Rose-Colored Glasses in your inbox each week. 

HANDPICKED RELATED CONTENT: 

Cover image by Joseph Kalinowski/Content Marketing Institute



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