Most people know that Amazon, Walmart, and Instacart have paid search placements on their websites. However, you may not be aware of their participation in programs, display, social media and Google Shopping.
This is crucial for PPC marketers to understand because retail media (also known as commerce media) drives customers to retail sites that can transact with multiple brands and items in a single transaction.
This is especially true of retailers that carry everyday essentials, offering a path for regular visits, both online and offline.
Elizabeth Marstonvice president of strategic commerce services at marketing firm Tinuiti, shared her insights on the 2023 retail media landscape and all the essentials to know in her session at SMX Advanced.
Retail media is basically a type of paid search. All companies have some type of paid search offering where they can harvest existing demand.
However, retail media differs from paid search in that it falls into two categories, on-site and off-site:
on site
Sponsored Search (Product Ads) Show Banners Browse, Category Pages Coupon Offers
Out of place
Programmatic viewing (ideally via a select network) Social media Email / newsletters SMS / push notifications Google Shopping PLAs OTT
How does retail marketing work?
Retail marketing is rooted in proprietary data that companies have collected over the past three decades. This data has allowed marketers to better understand customers, how they behave, and has shaped the shape of what we know as retail marketing.
“Just think about how much, for example, Kroger knows about you if you’re someone who buys groceries fairly regularly at a Kroger. Maybe you started your loyalty card program with your phone number, which you still enter every time that you make the purchase. Whether or not it’s through an app or a self-checkout booth,” Marsten said. “At the checkout counter, you’ve probably been entering that phone number for maybe 20 years. So even when you got cash back in the early 2000s and bought a pack of gum or a Twix, you enter that phone number just in case. Well, technically, that data is what’s led us to much better targeted advertising for the things you really want.”
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What should paid search marketers know?
Marketers have been collecting data about consumers for 30 years, and during that time, the industry has seen three major digital waves.
The first big wave came around 2002 when Google Ads started rolling out, along with similar products from companies like Microsoft and Yahoo. It took the tech giants 14 years to reach $30 billion in ad revenue. The second big wave started gaining momentum in 2008 with the rise of social media. Brands like Meta, Twitter and Reddit took 11 years to reach $30 billion in ad revenue. The third wave began in 2016 with the arrival of retail media. It took only five years for this sector to reach the target of $30 billion.
Explaining why retail media has evolved so rapidly, Marsten said:
“If you’ve worked for Google or Microsoft in the last 10 years or so, you’ve probably noticed that there aren’t many major changes — for example, some of you remember when Google changed the name of the Content Network to the Display Network. These are pretty monumental changes that happen over time in relation to digital advertising. “Now, when it comes to retail media, we’re experiencing one of these every six months or so. So things are happening and changing and pivoting as we go.”
Why in the store is still important
In-store is still very important to retail media because this sector works differently to D2C websites.
“I care about in-store sales, I care about shelf sales, and I care about checkout sales because I care about these digital touchpoints. “They tell us how we’re going to engage with the customer. and again,” Marsten said
Marsten went on to talk about Walmart, which earned $3 billion in advertising revenue last year. The company has big retail media expansion plans in the future and a significant advantage it has over competitors like Amazon is its stores.
“That’s more than 4,700 touch points in the U.S. alone. Think about how often people are going to get the essentials — I’ll be there every time outside and inside with my digital capabilities,” he said.
Retailers have the option to buy Google Shopping ads through the Target Roundel, which appear in Google’s SERPs. Customers who click through will be taken to the target.com experience, but this is funded by you.
So basically, you can work with Target Roundel to increase in-store sales using Google searches to fill your marketing budget. It’s a popular choice at many major retailers like Best Buy and Home Depot, but there are details to consider:
The product you sell must be in the store. Go through Roundel, so reports are limited to mid-flight (monthly only). Store sales included. It can be complementary or competitive. “It takes a minute in terms of reporting. But you get in-store sales. If someone’s looking for local inventory, they go to the store and buy it because they see online that it’s in stock, they just go to the store. and buy it. And you’ll get credit for it. It’s pretty cool. It’s something I’d say keep an eye out for in terms of capabilities and what it could be. I’m pretty excited about what their roadmap looks like on next year.”
Retail media has several connections with Microsoft, including:
hardware: In-store and Xbox screens
activation: Promote IQ, Microsoft Ads, Xander and Netflix
Automation / Research: ChatGBT
Statistics: PowerBI
Data: Azure / Oakes Project
CDP: Dynamics 365 Customer Insights
Not to be outdone by Microsoft, media retailers also work closely with Google in the following ways:
hardware: Pixel and Nest.
activation: DV360, YouTube, Google Ads and SA360.
Automation / Research: Bard and Trends.
Statistics: Google Analytics and Looker.
Data: Google Cloud and Pair.
CDP: Customer data platforms and Google Cloud.
Commenting on Retail Media’s relationship with Google, Masrten added:
“Similar to Microsoft, if you were a retailer and maybe you have a Google stack, working with a bunch of different capabilities at Google, you can make it very easy for a brand to come in and be active across multiple channels or multiple platforms. But also, hopefully, in the long run, we’ll get to a point where knowledge can be delivered in a way that’s digestible and actionable. I’d say we’re still working on that. That’s a big wave, and we’re still going.”
key points
Marsten concluded his talk by outlining the four key points he wants marketers to keep in mind when it comes to retail media:
Many similar options: There are a lot of similarities in terms of who works with whom.
A bit messy: We’re still building and there are similarities with Google and Microsoft in terms of how they developed their capabilities.
Shops. Shops. Shops: There are many opportunities left to tie. Think about how much money is transacted through a store and potential capabilities from an in-store experience perspective.
Look at the intersection of PPC (Google and Microsoft) and retail media to see if they overlap: You better believe they’re not going to be left out when it comes to retail media.
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