February 2, 2023 • 5 min read | Sponsored by Best Buy Ads
Sponsored by Best Buy Ads
Retail media networks have become critical for marketers, with retailers investing in ways that enable advertisers to engage consumers across online and offline channels. Given the wealth of retailers’ first-party customer data and measurement capabilities, retail media networks have become a natural fit for augmenting performance marketing programs.
Alongside the acceleration of RMN offerings, the ecosystem is becoming increasingly customer-centric. This emphasis on providing value to customers is especially apparent among retailers that choose a strategic approach to RMNs.
In this new Q&A, Keith Bryan, president at Best Buy Ads, spoke with the Custom in-house agency at Digiday Media about how organizations approach RMNs and navigate new opportunities in the space.
How have marketers’ approaches to retail media networks evolved in the last year?
Keith Bryan: I think we’re still at a stage with RMNs where the slope is increasing. So it’s not at a hard inflection point, and I think it is still an accelerating crescendo coming from different areas within the world of retail. RMNs are not just for brands sold at retailers; they are for travel, for financial services — really, for any industry that can benefit from targeting based on first-party data. RMNs are for any organization that believes they have an opportunity to capitalize on first-party data with the deprecation of cookies.
On the retailer’s side, I’d encourage retailers to be very thoughtful, as early as possible, about whether they’re building an RMN because it’s a new opportunistic play or because it’s a long-term strategic play. They need to consider whether the retail media business is part of an ecosystem that they’re developing.
Let’s talk more about that. What questions should retailers ask themselves when they prepare to enter the retail media network game?
Keith Bryan: They should get clarity about whether their RMN is primarily about creating opportunities to generate some operating income or if it’s about a long-term strategic play. With an opportunistic approach, companies are looking to make money because margins are compressed. If it’s a strategic play, that will lead companies’ decision-making. They’ll be able to better answer several questions. Do they want to insource or outsource? How do they want to organize their teams? What kind of talent do they want internally? What kind of technology do they need internally? Is this just about monetizing around a transaction? Or is this about unlocking customer experiences and value propositions?
If they’re going opportunistically, they can create their experiences — like their website, their app or curbside pickup —- and use a partner to augment that and offer ad inventory. But if it’s strategic, their ad business needs to be integrated and at the table from the first conversation. It’s about truly weaving advertising inventory and experiences into the customer experience. If brands want to actually create more content or invest in new customer value propositions, then they’re going to be motivated to look at the retail media business as a strategic asset that they need to build and invest in.
There’s a huge difference there that has major implications for how they build their teams, talent and technology. Industry-wide, there is increasing recognition for those of us, like Best Buy Ads, that view retail media as a strategic priority within the retail ecosystem that it is facilitating customer experiences.
How has this strategic approach changed how you operate?
Keith Bryan: We are constantly evaluating and evolving the relationship between our advertising offerings and the mix of communicating value propositions. We’re also learning via insights gained through our ads about value propositions that resonate with our end customers. Sometimes, our engagement with our customers is enhanced by a value proposition and stops there because the data we generate through that interaction alone adds such fidelity to our understanding of our customer relationship. Those insights are worth their weight in gold in terms of creating campaigns where we do have inventory.
But we’re not saturating the customer experience with ads. We’re introducing value propositions that we hope customers enjoy. Since they engage with us more because of that level of relationship, it adds so much richness and fidelity to our first-party data that that’s where the value to us comes in — not by throwing an ad in front of their face.
Given today’s complex customer journeys, how do retail media networks fit into brands’ omnichannel strategies?
Keith Bryan: Today’s consumers are always in a shopping mindset to some degree — whether they are already on their purchase path or not. From a technology and media standpoint, gone are the days when consumers buy nearly everything from retailers. It’s no longer so black and white: this is commerce, this is editorial, or this is entertainment. The lines between those buckets are blurred at best, which is why ad formats increasingly feel like shoppable content.
Media is also increasingly capable of facilitating commerce, and connected TV is a great example of that. You can watch CTV on basically any platform these days and see an ad. It’s the same look and feel as a retargeting ad but with a QR code or a button that says “shop now,” converting the experience from your big screen to the little screen in your hand.
All those kinds of commerce shopping opportunities are ripe for retail media because first-party retail data is often the best data to reach consumers programmatically. How does a brand show up in front of a consumer because they’re a great target for that ad? In many cases, it’s through a retail media transaction.
If you see an ad on CTV that looks like it’s a blend of a retail value proposition with a brand, there is an increasing probability — and a very high probability when it comes to Best Buy — that the ad was a product of a retail media transaction. And it should be because it’s the best data to reach the audience and it’s the best way to measure the ad’s performance. And it puts brands in front of customers in the moments their brands matter most to those customers — what could be more customer-centric than that?
Sponsored by: Best Buy Ads
