Retailer Media Down Under Eyes 50-100% Growth: Deep Dive Report

What you need to know:

• Australia’s big supermarkets are becoming powerhouse media players -- and other retailers are eyeing the same model.
• They are scooping trade budgets -- and now pushing for marketing dollars.
• That is causing trade sales and marketing teams to realign -- altering dynamics within FMCGs and with knock-on effects for agencies.
• But large FMCGs including Nestlé and PepsiCo say the likes of Coles 360 and Woolworths-owned Cartology have much more to do on measurement, reporting and analysis before they start to move big slices of budget.
• Across the board, FMCGs and drinks companies want more data from retailers.
• Now retailers are pushing media beyond their own digital properties and into off network models, eyeing Amazon’s ad network approach -- using their data to enable brands to target their audiences around the web.
• That poses opportunities -- and challenges -- for traditional media owners.
• Mi3 has produced an in-depth Retailer Media Next market report, with cross-industry insight from 25-plus brands, retailers, platforms, agencies and consultants. Download yours below.

Retailer media is disrupting the disruptors.

"The losses that we’re seeing now in several of the major digital platforms, the flat reporting we are seeing at Facebook, Google… is money shifting to retailer media for the first time this year," according to media ecologist Jack Myers. His firm, MediaVillage, has shared data with Mi3 to show where the money is moving in the U.S. TV, search and social are all in the frame.

In Australia, those analyzing brands' media investments forecast 50-100 per cent growth for retailer media in 2023, with implications for all other media channels -- and altering the trade-marketing structures within large FMCG companies, causing knock-on effects for agencies. While supermarkets have made the early running, retailers across categories are now launching media businesses or mulling market entry.

But blue chip marketers underline that retailer media players have significant work to do on measurement, reporting and ROI if they want to attract a greater share of budget. They want more data and greater rigor. Mi3 has produced an in-depth market report, Retailer Media Next, unpacking the challenges, opportunities and implications for brands and the broader market.

Interviews with 25-plus marketers, retailers, platforms, agencies and analysts provide cross-industry insight. Here's a snapshot:

• PepsiCo CMO, Vandita Pandey: "We've got quite a bit more runway and learning before we would see a significant increase in investment."
• Nestlé Marketing Communications Director, Anneliese Douglass: "I see far greater working between marketing, commercial development and sales on the customer journey, full end-to end planning [due to retailer media and ecom] … that is a fundamental shift we are making in our business."
• Moccona Marketing Manager, Aaron Wall: "Generic search terms [within retailer media platforms] are getting really expensive," because brands want to be "in the right format on page one."
• Mutinex CEO, Henry Innis: "Retailer media will grow 50-100 percent this year. But in the longer-term the market is unlikely to generate the huge returns and ROI seen to date, in line with any maturing medium. We are probably just coming to the start of that cycle with retailer media."
• Brad Moran, co-founder, CitrusAd: "Coles and Woolworths could dominate the entire ad market if they wanted to."
• Yahoo Apac data chief, Dan Richardson: "After Optus and Medibank, brands are very concerned. They have to work through a lot of privacy and security risk compliance to even get to a point where they can think about launching a media network."
• Ellipsis Managing Partner, Tim Tyler: "The biggest compliance costs [resulting from Australia's privacy law changes] will fall on those making the most money out of loyalty data -- those with the biggest databases they are trying to convert into media channels."

With input from: brands including Nestlé, PepsiCo, Moccona, Baida Poultry, Lion, v2food and Mars Petcare; retailer media operators Coles 360, Cartology, Endeavour Group and Winning Group; platforms and tech providers including Citrus Ad, Zitcha, Criteo, Yahoo, The Trade Desk and Mutinex; agencies and groups including Resolution Digital, Zenith, OMG, GroupM, WPP and Hatched; and analysts and consultants including Sonder, MediaVillage and Ellipsis.

An Mi3 report supported by Coles 360 and Resolution Digital.

Download your copy here.

Reprinted with permission from Australia’s Mi3.

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.