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Top Factors CPGs Should Consider When Connecting To Retail Media Networks

Top Factors CPGs Should Consider When Connecting To Retail Media Networks

Over the past year and a half, retail media networks have dominated ad spend, surging over 53% in 2021 to top $31.49 billion. As these networks continue to scale and retailers sharpen their advertising strategies, brands are paying more attention to the power of data collaboration and how it can not only transform the customer experience but equip businesses with the tools necessary to enhance strategic partnerships and secure a competitive edge in a complex marketplace further complicated by macroeconomic headwinds.

I recently spoke with Vihan Sharma, EVP of Global Sales and Manager Director, Europe at LiveRamp, a data enablement platform powering many of the data collaboration use cases gaining steam in-market today. Vihan and I explore the differences among major retail media networks, how brands and suppliers can evaluate potential partners, and how data collaboration is advancing use cases across identity, TV, cloud, clean rooms and more.

Gary Drenik: Tell us about LiveRamp’s data collaboration platform. Does it power any of the retail media networks in-market today?

Vihan Sharma: LiveRamp’s Safe Haven is our permission-based data collaboration environment. Because it is neutral and privacy-first, Safe Haven makes it safe and easy for enterprises to collaborate across their organization and with external partners to build audiences, activate data and access actionable insights.

Naturally, this has placed the platform at the epicenter of retail media networks (RMNs), one of the most dominant data collaboration trends in advertising today. Safe Haven helps power media networks for some of the world’s largest retailers — including Walmart, Sam’s Club, Boots and Carrefour — helping them retain shopper marketing dollars, reach consumers online, increase ecommerce profitability, drive product development, and deepen supplier relationships. As LiveRamp expands its relationships with retailers and CPGs across the U.S. and Europe, we strive to set the pace for business transformation through permission-based collaboration.

Safe Haven differentiates from other data collaboration platforms on the market in large part because of our leadership in privacy, security, identity and neutrality — we don’t sell any media and can work with our clients’ existing tech or agency partners thanks to Safe Haven being a configurable platform. Moreover, LiveRamp has a robust data ethics and privacy-by-design model and has been at the forefront of protecting consumers’ personally identifiable information (PII) for nearly 50 years, so our clients benefit from expertise in best-in-class privacy, security, and regulatory compliance. Additionally, leveraging an interoperable identity framework like LiveRamp’s RampID helps clients measure effectiveness more accurately and drive personalized experiences across the entire ecosystem.

Drenik: There’s been no shortage of RMN launches in the last two years. Are all RMNs the same, or do they offer different capabilities?

Sharma: Most if not all major U.S. retailers have a media network today but they’re not all one in the same. McKinsey summarizes it nicely: The largest retail media networks have common value propositions for their CPG partners, such as the ability to:

  • Foster a better understanding of customer behavior
  • Reach and influence customers at different stages in their journey
  • Access to advanced analytics
  • Optimize in-store product placement

Despite these commonalities, there are key differences among how retailers pitch their media networks to suppliers. For example, some tout their omnichannel scale and reach, while others emphasize best-in-class analytics or integrated media solutions.

The takeaway is that brands and suppliers should select the offering that will be most impactful for their unique business needs.

Drenik: What kind of insights and analytics should CPGs look for when evaluating RMN partners?

Sharma: CPG brands should first identify the business challenges they want to solve by investing in an RMN. It may be to improve understanding of how their products are searched or reached, establish benchmark performance against competitors and categories, or to build more complete customer profiles. Seek a retail media partner who can not only deliver on these desired outcomes, but also meet requirements for data provenance, governance, and permission.

The common denominator across these use cases is measurement. Especially in times of economic challenges, business leaders should stop justifying marketing with impressions and clicks and evolve to measurement that matters: incrementality, closed-loop measurement, journey analytics, revenue impact, and more.

Drenik: With the loss of third-party cookies imminent, how can RMNs – and data collaboration more generally – play a role in advancing cookieless strategies?

Sharma: Digital advertising is already cookieless for over 50% of the population and we are increasingly seeing brands leverage people-based advertising solutions to deliver unique customer experiences to consumers across channels. LiveRamp’s Safe Haven, along with our identity architecture, Authenticated Traffic Solution (ATS), is already allowing retailers to increase CPM yields on their respective owned and operated properties today. RMNs require increasing collaboration between retailers, publishers and brands and leveraging a people-based identifier allows RMNs to deliver targeting and measurement capabilities on par with those available across the walled gardens today.

Drenik: What is the next big innovation in data collaboration and how do we get there?

Sharma: According to Forrester, retailers and marketplaces will sell $40 billion in digital advertising in 2022, with the retail media market expected to double to $85 billion by 2026. Capitalizing on this lucrative opportunity, major RMN pioneers are starting to build the next generation of data collaboration offerings. Dollar General, for example, recently announced the evolution of its retail media network, DGMN, which now gives advertisers real-time data to help them service the retailer’s large audience. DGMN also introduced new insourcing of capabilities that includes sales, client success, and analytics to deliver closed-loop, one-on-one measurement, insights, and reporting.

Outside of retail we are seeing media and entertainment (TV, publishers, cinemas), travel and hospitality (airlines and hotels) and publishing as the industries moving significantly into data collaboration to drive increased value through data. Due to the immense value of these media owners’ data sets, and the desire of advertisers for detailed privacy controls, we are starting to see new collaborations with brands and agencies. This has the potential to bring about massive change in measurement and audience-buying.

Finally, advertisers are increasingly migrating their data strategies into cloud technologies, and we see this as a huge opportunity for growth in collaboration. LiveRamp’s Safe Haven, along with our cloud native technologies, will be key to unlock collaboration at scale within the clouds.

Drenik: Thanks, Vihan for your time and insights. Retail media networks have certainly been a game-changer for retailers, brands and CPGs and an exciting opportunity for LiveRamp. Data collaboration over the coming year will be something to watch.

What do you think?

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