Last month, we looked at lessons learned from the Internet as a new media tool that has relevance to the marketing at retail opportunity. One of the points I made was in relation to "dumping" the advertising rates in order to stimulate trial. This topic is a hot one, as we are seeing groups such as Nielson, PRISM, and the WAF Bureau for Customer-Centric Measurement working to evaluate store real estate. The goal is to find a standard set of metrics that has common nomenclature and linkages to traditional media. Then, we can attract the millions of advertising dollars from agency media buyers that are slipping out of traditional TV to alternative out-of-home venues such as the store.
At the heart of the effort is the thought that the Madison Avenue agencies will one day have a key role in the retail media "buy" regarding in-store venues to reach consumers. The concept has some merit, but many vets who have worked within the walls of retailer organizations question this as the Holy Grail for establishing the store as media opportunity. Not to say that this won't be the case for some retail venues, but there are reasons that positioning retail media in a default advertising proposition undervalues the opportunity.
To ensure that I was representing more than my own experiences in this column, I spent some time with top retailers, product manufacturers, digital signage firms, and wellknown ad agencies to have some open dialogue. My goal was to discuss the retail media opportunity and challenges and bounce my theories off of them. Some perspectives varied of course, but the items below were common themes of agreement worth consideration. In positioning retail media, why are so many defaulting to the advertising model?
Media has evolved over time and, while it was once only about reaching people with an ad, its evolution also included new applications. Let's look at some general media history.
Reach x Frequency = Awareness
Traditional, i.e., TV broadcast, print, radio, and outdoor, was based on reaching eyeballs and message repetition to secure awareness. It was never an exact science regarding measurement, so the industry relied on things like Nielson and circulation numbers to figure out how many people were exposed to a message. Effectiveness was most often gauged via brand benchmark studies.
Direct or Database Media:
(Targeted) Reach x Frequency = Response
This media evolved with a higher purpose: measurable response generation. Its acceptance was lukewarm for many years, but as consumers have become more elusive, it's slowly becoming the hot ticket that many strategists feel will be the foundation for all marketing.
- (Targeted) Reach x Frequency= Awareness (see)
- Response (click)
- Engagement (explore)
- Purchase (buy) - Loyalty (dialogue)
The interactive (or internetbased) marketing opportunity created an entirely new beast. Like digital signage, when it first emerged the industry first saw it as a GRP play and measured it via "page views" or "impressions." That was all that we could do! As it evolved, our media uses for it did as well — and so did our ability to measure it. In fact, our interactive planning, placement, and reporting tools are now so robust, they are the most measurable media of the entire toolkit.
Like direct media, interactive media is often targeted. But how it is used is ultimately driven by the business goals of the brand and the desired consumer response.
RETAIL MEDIA: WHAT SHOULD IT BE?
Reviewing the media buckets above, one could assume that retail media is also a new media beast that will enable its own unique uses. Key is that we utilize it within the context of its existence (the store), how it lives with all other communications touchpoints, and the ultimate intent of the message.
Therefore, the closest media model is not traditional media, but interactive media. And like interactive media, we will have to hunker through an initial period of measurement limitations as the technology -- and retail media strategies -- evolve to enable us.
Another point to help us understand the retail media opportunity is brought to us within a Forrester Research report called "How Digital Media Transforms In-store Marketing." The author, Nikki Baird, is clear that digital signage and emerging store media should focus on boosting marketing, store operations, and merchandising. From this, we can take away that, at least with digital efforts, marketing is but one use. Sales generation, experiential brand enhancement, and better employee communications are also critically important.
Most ad agencies don't understand retail stores unless they have invested in and staffed a separate "retail-focused" division. As this is a small percentage, why are we assuming that they will ultimately have control over retail media spending?
There are many different types of agency services, and many of them should play a role in the store strategy. Why? Well, they own the brand.
They are often so close to understanding the consumer and product that they can almost represent her to any strategic team. If they're good, their people look at her life from every angle and do their darndest to understand her every need and desire. This insight is key because it's the foundation for the "brand promises" the agency makes in their effort to create impressions or drive store/web traffic. This said, in creating a brand experience, one is not going to be successful if the physical manifestation of the brand promise — a.k.a. the store experience — does not fulfill those promises in-store.
Now, this is where it gets tricky. A common message being espoused is that we must appeal to Madison Avenue to attract advertising media dollars into the store venue. These dollars are planned and allocated by media planning and buying agencies, a different set of folks than the strategic planners, and their job is to find and reach people through any and every media outlet.
A few reasons why this seems faulty rise to the top: Unless they house a niche retail-focused division, agency media planners and buyers have very little understanding or current role in the planning and execution of the retail store activities. They don't understand promotions and they certainly don't understand stores. They could certainly learn it, but the learning curve is enormous.
They are not part of the current retail POP/merchandising process. Why then would we feel that they have a reason to intermediate the direct process between brand manufacturer sales teams and the retailer in their planning, negotiation, and activation of store communications?
Unless working with specialists, traditional media folks are focused on reach and frequency. As discussed, retail media can certainly be about this GRP approach; but this is a limited view.
There is a rich opportunity for agencies to create "retailwise" groups to address the concerns above. Many have already appeared and, like the interactive space, I hope to see certain groups become noted specialists. To be successful, however, these specialists must bring together multiple skills, all focused on creating the most effective strategies to help consumers with their store shopping experience.
While media planners may have some insights to this, it's more likely that the traditional brand planning teams on Madison Avenue would be the preferred group to bring into the retail media strategy team.
We are at the beginning of a lifelong learning process. The challenges — and opportunities — of embracing retail media are both daunting and exciting. As we seek to establish it, we must realize that there is no "one size fits all" way to use it. Many skill-sets will have to come together and the technologies will need to evolve to support the measurement of it. However, if we can lean on the tools and experience of current brand strategists, promotions marketers, store designers, technologists, and the many others who have value to bring, we will certainly get ahead of the challenges. Regardless, the one thing we can be sure of is continued evolution and a need to commit ourselves to a lifelong commitment of learning.
In our next issue, we'll look at how we can create cross-functional team leaders to bring our retail media efforts together more effectively.