Cookies, who?
Agencies aren’t panicking about the end of third-party cookies anymore, because clients aren’t panicking – or procrastinating as much.
Cookie deprecation was “a really hot topic a year and a half or so ago,” said Mara Greenwald, SVP of commerce media at Night Market, Horizon Media’s commerce-focused agency. But now “I don’t hear it coming up as much,” she said.
Perhaps that’s because Google pushed the deadline multiple times, giving brands a chance to adjust, test alternatives, devise first-party data strategies and focus on new channels, including commerce media.
“We were given the gift of time,” said Samantha Bukowski, global head of commerce at WPP-owned media agency GroupM.
First-party data feasts on cookie crumbs
Specifically, many advertisers have been using this gift of time to formulate an approach to first-party data, which must be “at the core” of a brand’s commerce strategy, said David MacDonald, managing director of Publicis Commerce.
Brands need to understand where their customers are shopping (including with competitors), how price-sensitive they are and why they’re making a purchase – and they need direct access to this data.
“If you’re reliant on somebody else to give you information on your customer, that takes the power away from you,” MacDonald said.
Direct-to-consumer (DTC) brands have a leg up on gathering first-party data, but Publicis has also worked with non-DTC brands in this area.
For instance, Publicis Commerce and Epsilon (a Publicis Groupe-owned data company) teamed up on a first-party data project for an alcohol brand tied to a large sporting event. Leading up to the event, users could download an app and answer questions over time such as, “Who’s your favorite team?” The app would then be decked out in the team’s colors and target users with messages related to their team.
The app also collected responses to feed the brand’s customer profiles through questions such as where users planned to watch the game and with whom.
“These are things we wouldn’t get from transactional sales,” MacDonald said. “People will give you information if they feel there’s a conversation.”
Or if there’s something in it for them, like discounts or exclusive access.
The recently renovated Walmart in Kalamazoo, Michigan, for instance, reserves one checkout line for Walmart+ members only, said Elizabeth Marsten, VP of commerce strategic services at independent performance agency Tinuiti.
Combining a retailer’s offline data (like in the Kalamazoo Walmart example) with logged-in user data can also help create a more relevant, less disruptive advertising experience and sharpen strategy by giving clients a broader view of the commerce ecosystem, said GroupM’s Bukowski.
It’s important to ensure, however, that “DTC doesn’t cannibalize retail, or vice versa, for a client that’s active on both,” Bukowski said.
Lush growth, but watch for thorns
Yet as in vogue as first-party data is right now, collecting it is only half the battle. Brands need to analyze and apply their data, including across walled gardens, as much as possible.
“Data is the new IP,” said Jeriad Zoghby, chief commerce strategy officer at IPG.
For example, a brand that’s targeting campaigns to the same or similar audiences across Walmart, Target and Kroger is ideally looking for audience-level insights across retailers.
But the walls of retail media walled gardens will likely only get higher in 2024, especially as advertisers grow more reliant on retailer data in the absence of third-party cookies.
“Some of them will probably have some barbed wire up while they’re at it,” Tinuiti’s Marsten said.
From a media buyer’s perspective, it’s annoying to have to go into a bunch of separate DSPs to buy media or to be unable to combine all the data and use it in one segment, Night Market’s Greenwald said. But those high garden walls prevent bots from coming in and buying media. And they protect consumer data.
“As a consumer, we want the walled gardens to be high,” IPG’s Zoghby said. “I don’t want Amazon handing off my first-party data to anyone.”
The main issue with retail media’s walled gardens, however, is measurement – as in a lack of standards across retail media networks (RMNs).
Two retailers might define a term like “ROAS” differently or use attribution windows of vastly different lengths (say, seven versus 30 days). For an ecommerce attribution window, though, Greenwald said 24 to 48 hours works better because customers tend to buy quickly. Close to 60% of people start their product search on Amazon. In short order, many of them add to cart or Buy Now, sometimes making an impulse decision at checkout.
Besides, the longer the attribution window, the more ads a consumer is exposed to, Greenwald said, and the greater the chance that last click unfairly gets the credit.
“[Is] a banner ad on Walmart.com really what got you to purchase a product?” she said.
The IAB is working on industrywide measurement standards for retail media, but even when the standards are ready, it can’t force anyone to adopt them. “I am very curious to see what the final version ends up being and who actually raises their hands to do it and implements it,” Marsten said.
In the fast lane
Although the jury’s out on measurement, retail media’s runaway growth is projected to continue in 2024, blowing past the combined revenue of CTV and linear TV by 2028, according to GroupM’s end-of-year forecast.
The hard lines that once divided these categories are getting blurrier, too. “A component of CTV is going to become retail media or use retail media audiences,” Greenwald said.
Amazon, which has expanded into entertainment, is one example of this convergence, Bukowski said.
Amazon Prime Video has invested top dollar in its original streaming programming, like “The Marvelous Mrs. Maisel,” “The Grand Tour” and “The Lord of the Rings: The Rings of Power.” It’s also acquired exclusive streaming rights to NFL’s Thursday Night Football and is adding an ad-supported tier next year.
“We haven’t seen retail media reach its full potential yet,” said Bertrand Fraboulet, global managing director of Havas Market, the ecommerce arm of global media agency Havas Media Network.
Even in the US, which dominates the space – and despite the meme that “everything is an ad network” – only 40% of retailers have a retail media offering, he said. In a vote of confidence in retail media’s sustained growth, Havas Market co-launched an RMN with French ecommerce software firm Mirakl in September.
Beyond helping with first-party data, actually developing an RMN is one way for agencies to entice clients. Another is to serve in a complementary role and press retailers for more bells and whistles in their media network offerings, Greenwald said.
“Retail media networks still need a lot of direction, because, at the end of the day, their goal is to make more money,” she said. “Our goal is to sell our brand.”
