Latest / Retail Media Breakfast Club / Should We Really Care What Consumers Think About Retail Media Ads?
Transcript
- what consumers say about retail media vs how they actually behave === [00:00:00] A new survey from Capgemini has found that 67% of shoppers notice retail media ads. The research also reveals that consumers find retail media more relevant than most other advertising with 68% saying that retail site search ads. Meet their needs ~compared to much lower satisfaction scores for digital ~compared to much lower satisfaction scores for traditional digital formats. [00:00:25] But before marketers start celebrating these positive sentiment scores or worrying about the 33% who didn't notice the ads at all, they should consider a more fundamental question. ~Does it actually matter what consumers say about retail media?~ [00:00:37] Does it actually matter what consumers say about retail media? ~The answer is probably not as much as you'd think. ~The answer is probably not as much as you'd think. Consumer surveys tell us that people don't like ads, that they don't influence their buying habits. That they want ads to be more personalized, but also find it freaky when they're too personalized. [00:00:59] [00:01:00] Meanwhile, ~other research reveals classic contradictions. Other research reveals classic contradict. ~Other research reveals classic contradictions. 70% of consumers say that commerce video ads annoy them, yet 75% also say that those same shoppable videos help them to make better purchase decisions. [00:01:16] Here's the reality. Asking shoppers about retail media ads is like asking fish about water. They're swimming in it without realizing that it even exists. While consumer feedback offers valuable context for creative and placement strategies, treating it as a North staff, a budget allocation is a costly mistake. [00:01:39] Let's jump in. [00:01:40] / [00:01:40] Good morning and welcome to the Retail Media Breakfast Club. I'm your host, Kerry Masters, and every weekday at 6:00 AM Eastern, I bring you candid and real discussions in the world of retail, media and marketplaces in just 10 minutes. So bring your own cup of coffee and we'll get smarter about retail media [00:02:00] together. [00:02:01] The first issue with consumer opinion research is that shoppers fundamentally misunderstand what retail media actually is. Capgemini's survey reveals what people think they notice, not how retail media works. In practice, consumers likely equate retail media with the most obvious formats, sponsored product listings that sit directly in search results. [00:02:24] With clear sponsored labels, and this makes sense, these slot sit smack in the middle of a shopping task and are clearly labeled as sponsored, making them impossible to miss. ~And that's, ~and this is likely the type of ad that this 67% of shoppers notice . On a retail site, but of course, retail media is much bigger than just sponsored product ads. [00:02:49] It extends to any advertising powered by retailer first party data. [00:02:54] This gap means that. Retail media's true reach ~is likely under count, ~is likely undercounted [00:03:00] by consumers themselves when a connected TV spot or a paid TikTok video is bought through Walmart Connect using shopper data for targeting, consumers have no framework to identify that as retail media. From their perspective, it's simply a TV commercial or a social media ad, even though it's powered by retailer insights and measured against in-store sales lift. [00:03:24] And this offsite spending fueled by CTV and paid social is growing three times faster than onsite retail media ad formats. several forecasts I've seen. Predict that offsite retail media spend will grow three times faster than onsite over the next couple of years./ [00:03:45] [00:03:47] Consumers can't agree on what they want. Even when focusing on formats that consumers do recognize. The research reveals fundamental contradictions ~Nielsen reports that retail media network offsite spend will grow two to~ [00:03:57] ~several predictions. I've seen show that several, that make preference data unreliable, ~that make preference data [00:04:00] unreliable for strategic decisions. Take personalization. For example, ~Capgemini's Re ~Capgemini's report shows that 59% of consumers complain that in-store adss are too generic, while 53% want personalized screens yet separate. [00:04:16] E-marketer research found that while 30% say the personalization they value most is tailored retail media offers. 76% are uncomfortable with AI using their data to power that personalization. Other paradoxes appear throughout retail media research. [00:04:35] Only 24.5% of consumers claim that they'd make an impulse buy after seeing an in-store ad. ~But 48%, but. ~But 48.6% actually have. [00:04:47] And of course, contradictions extend to effectiveness claims ~to ~the same consumers who report finding retail media ads annoying. Also acknowledge that they help with purchase decisions. They [00:05:00] claim ads don't influence their buying behavior while demonstrating the opposite through their actual purchasing patterns. [00:05:06] / [00:05:06] [00:05:09] Effectiveness Trumps perception. While consumers express mixed feelings about retail media advertising, marketers are responding to clearer signals. Measurable business results. According to the Retail media Network ratings and insights report by the Path to Purchase Institute and TransUnion, 80% of CPG marketers say that retail media networks are as or more effective than other digital channels, and ~more importantly.~ [00:05:39] /More importantly, 70% of those advertisers increase their ad budgets again in 2024, demonstrating that results are supporting future investment decisions. This budget growth is happening despite, or perhaps because of consumer ambivalence. ~Marketers aren't asking whether shoppers. ~Marketers aren't [00:06:00] asking whether shoppers enjoy retail media ads. [00:06:02] They're asking whether those ads drive profitable growth. The explosive growth in retail media spending, particularly in offsite channels where consumer recognition is lowest suggests performance metrics are trumping sentiment scores. [00:06:19] The channel's distinctive measurement advantage explains this disconnect. Retail media's ability to provide closed loop measurement that connects advertising exposure directly to purchase behavior fundamentally changes how marketers should evaluate success. When you can track whether an ad impression led to an actual sale, consumer satisfaction surveys become quite secondary ~in terms of your consideration ~in terms of advertiser consideration. [00:06:48] ~Okay. ~Whether or not consumers notice ads or say they find them helpful. The fundamental promise of retail media is the ability to measure actual impact. [00:07:00] The question that should drive budget allocation isn't, do consumers like these ads, but rather, did this campaign drive incremental sales? ~If the answer is no, then marketers can dig into wire and.~ [00:07:07] If the answer is no, marketers of course can dig into why examining whether the creative itself resonated, whether the audience targeting was accurate, ~or whether ~because ~these things will dictate whether an ad these, these, ~these factors dictate whether an ad will feel relevant or not to consumers. But if the answer is yes, consumer sentiment becomes a fairly secondary optimization opportunity rather than a primary success metric. [00:07:33] The bottom line, [00:07:35] perhaps the most important reason to view consumer opinion data skeptically is the well-documented disconnect between what people say and what they do. Self-report bias means what shoppers claim in surveys is a shaky predictor of actual behavior. ~One of my~ [00:07:52] ~one of my favorite studies was reported in Harvard Business Review, found that 65% of people say they prefer eco-friendly brands. One of my favorite studies. F And ~one of my favorite studies that I'll link up to in the show notes, which was cited in Harvard Business Review, talks about the disconnect between people [00:08:00] saying they prefer eco-friendly brands. [00:08:03] And this is always true of like these demographic research reports, gen Z prefers eco-friendly brands. But you know, why is Timo and she in. Exploding. So this research found 65% of people prefer eco-friendly brands, yet only 26% actually buy them when faced with real purchasing decisions. [00:08:25] These contradictions in consumer feedback, wanting personalization, but rejecting data collection. Finding ads annoying, but also helpful, claiming immunity to advertising influence while also demonstrating the opposite through behavior. Suggest these surveys capture aspiration more than reality. Smart marketers will use sentiment data to improve their retail media execution, while recognizing that in a performance driven channel, the ultimate consumer vote happens at the point of purchase, not in a survey response.