Retail media and connected TV (CTV) stand out as two of the fastest-growing mediums in the digital landscape in 2023, with no signs of stopping. They are both poised for significant growth in the coming year, with retail media advertising projected to surge by 10.5%, paralleled by an anticipated 12.1% expansion in CTV.
However, while significant platforms in their own right, what brands should be most excited about is not the individual development of retail media and CTV, but the possibilities created by combining the two.
Dynamic duo
The concept of retailers and broadcasters working together is not a new one. In the UK, Tesco has been collaborating with Sky for the past decade. This partnership enables two huge data sets – one from TV and one from retail – to be connected to better target and measure the impacts of advertising.
In recent years, there has been a notable shift in the landscape. Notably, the rise of differentiator platforms, in the form of global platform connections like broadcasters and sophisticated commerce media networks fuelled by an explosion in the use of customer data as free or paid subscribers of TV, and loyalty schemes in commerce.
Connected TV ownership soared during the pandemic years, as did the popularity of streaming content channels, with the number of UK households subscribing to CTV reaching 19.3 million in 2023. As the scale of data increases, innovative retailers and TV companies will seek scalable solutions that offer end clients, and advertisers self-serve access to these valuable data sets.
Major retailers – aware of the increasing value of high-quality shopper data at scale – have been investing heavily in their loyalty card programmes, providing customers with better offers and discounts than ever before, in return for the continuing flow of their data.
One such example of this is Co-op, which overhauled its membership offering in April this year, and has since tripled weekly signups to a total of over 4.8 million active members. Similarly, Boots is now activating 60% of its media budget through first-party data, compared to 6% in 2021, and has one of the UK’s most forefront commerce media offerings.
By connecting these two rich data sources from retail media and CTV, it becomes possible to target and measure advertising investments in a variety of interesting ways. Indeed, the idea that media companies could potentially have access to the same real-time consumer data as retailers to help plan and optimise ad campaigns is genuinely exciting. For example, brands now have the unique ability to know who was watching what and when on the television, then compare that information with who bought or searched for products in the time that followed.
As a result of these new and highly lucrative opportunities, we’ve seen an increasing number of partnerships between retailers and TV companies. The question is, what is next? The answer is offering flexible data collaboration, which means retailers and broadcasters need to be able to offer scalable, secure and transparent access to data (as recently highlighted by ISBA). The right technology can make this data available to all of the constituent parts of the ecosystem, media companies, retailers, brands and the agencies that service them.
A collaborative future
Of course, underpinning all of these new opportunities is the idea that owners of high-quality data can work together safely and blend their data in ways that are privacy compliant, mutually beneficial and enable better outcomes for their customers.
That said, data collaboration remains a scary prospect for many. Our research amongst UK brand marketers indicates doubts about it, including a lack of standardisation in practices (40%), resistance to data sharing (38%), and a lack of expertise (36%). However, with the correct support, including working with the right third parties and with the right technologies, that needn’t be the case.
From the retailer’s point of view, if you have your own loyalty card data, there’s an opportunity to connect that data to both local CTV programmes and global platforms. So, to offer advice to any retailers looking to enter this space, they should investigate how to connect their data to as many places, with the fewest different technical integrations as possible.
The key question then, is how can retailers build efficiency by connecting their consumer data with the different CTV partners of their choice? This is something that retailers should think strategically about, as they can hugely benefit by reaching a wider audience, finely targeting their customers and staying competitive in the dynamic digital landscape while optimising their resources. These partnerships also enable platforms to differentiate their offerings for prospective brands.
Meanwhile, for brand advertisers of CPG products, the wider accessibility of retail media data has been especially important as those brands are less likely to have any form of direct, first-party relationship with their customers. Data collaboration allows brand advertisers to measure the impact of their campaigns not only on sales but also at every stage of their consumer funnel, e.g. determine whether a conversion is a new customer or an existing customer.
Nevertheless, when applying this model to CTV and retail media, given the increasing number of direct collaborations the industry is seeing between retailers and CTV broadcasters, it can be tricky for the brand marketer to know how to proceed.
Firstly, they should strategically assess the data they would like access to, then find out the most efficient way to access it. This may involve direct collaboration with the retailer in some instances, while in others, the broadcaster relationship may inherently include integrated retail data. Brands are increasingly restructuring their teams and promoting expertise where needed to put their best foot forward and ensure that their strategies are futureproofed with the evolving landscape of retail and CTV partnerships.
To conclude, as we approach 2024, brands should aim not just to acknowledge but actively embrace the potential offered by combining data from retailers and CTV broadcasters. Indeed, this convergence is not merely a fleeting trend but presents a seismic shift in the ecosystem. It offers enhanced business outcomes as well as the creation of more meaningful, targeted and resonant experiences for customers.
This sets the stage for a transformative era in advertising and consumer engagement.
Source: warc.com
