Latest / Retail Media Breakfast Club / Kroger x YouTube: The Retail Media Breakthrough That Could Unlock Billions in Brand Budgets
Transcript
- Kroger YouTube Integration: Bridging Brand Budgets === [00:00:00] Kiri Masters: Hello and welcome back to Retail Media Breakfast Club. I'm your host, Kerry Masters and yes, if I sound terrible, I do in fact feel terrible. I was at the Drums, global Commerce Media [00:00:15] Leaders Summit. On Sunday, possible Miami on Tuesday, and I just got back home to Atlanta feeling quite sick and sorry for myself. [00:00:27] So I apologize in advance for my [00:00:30] gravelly, nasally voice, but [00:00:32] this is real life. [00:00:35] Today I am reading an article that was originally published to my column at the Drum about Kroger's YouTube deal and [00:00:45] how it may present a bridge to those national brand budgets that retail media networks have been trying to crack. [00:00:53] [00:00:55] Kiri Masters: Every retail media leader that I've profiled over the past year or [00:01:00] so has said some version of the same thing that we need to get brand budgets. [00:01:05] The trade dollars and shopper marketing funds that built retail media's first act are running dry and the real money. The national [00:01:15] brand budgets controlled by CMOs requires a fundamentally different value proposition. Kroger Precision Marketing just built one earlier this month in April, Kroger Precision Marketing announced a collaboration with Google's [00:01:30] displayed video 360 DB 360. [00:01:32] That makes it the first retailer to bring skew level conversion reporting to YouTube and other DB 360. [00:01:41] Surfaces brands can now activate Kroger's [00:01:45] shopper audiences built from purchase signals across 60 million loyal households on YouTube, and then see precisely which products sold as a result. The integration is powered by LiveRamp and Meta Outter with [00:02:00] no additional setup required for brands. [00:02:03] The technical details are worth understanding, but what really caught my attention is the strategic play. This is a real concrete move from an RMN to prove that it belongs in a brand media plan. [00:02:15] Brand budgets haven't flowed into retail media for quite specific and practical reasons. [00:02:21] the most common onsite formats, things like sponsored products, listings, display banners, don't create [00:02:30] emotional connections. Now, don't come at me on that one. That is a generalization, but these ad units are typically. Built for lower funnel performance marketing and the measurement that's provided [00:02:45] doesn't really speak the language that brand marketers are judged on. [00:02:49] And finally, the buying workflow of these ad units forces brands onto retailer specific platforms. Instead of the tools they already use. [00:03:00] Kroger's YouTube integration takes a run at all three. So firstly on format, [00:03:05] a sponsored product ad can't do what a YouTube video can. Catherine Maza, who is a retail media leader who previously built networks at [00:03:15] Hy-Vee and Dick's Sporting Goods told me that a banner ad or a sponsored product ad cannot create emotional connections with consumers. The ability to run creative on YouTube allows for rich longer form video creative. [00:03:29] On [00:03:30] measurement, skew level conversion reporting means that brands can see the actual sales impact of their YouTube spend on Kroger's shelves. Christine Foster, who is the group vice president of Kroger Precision Marketing. Said in an [00:03:45] interview with the drum that media buyers can now optimize near real time against the conversion and against the sales that they're seeing directly. [00:03:54] Now that is a big deal. A recent Dentsu and Northwestern University [00:04:00] study found that 64% of marketing leaders still identify proving marketing's financial impact as their top challenge. And finally on workflow. Nearly every CBG brand already has a [00:04:15] Google DV 360 account. As Christine noted. [00:04:18] There are no new platforms to learn. Brands apply Kroger audiences and measurement in the same tools that they're already buying. National brand media through easy to understate [00:04:30] how much this matters. But anyone who has managed retail media across multiple networks knows that every additional login dashboard and reporting format is a reason for a media buyer to deprioritize you. [00:04:45] Miracle Ads is the Ad Tech solution trusted by Rakuten and over 50 global enterprise retailers. That's because Miracle Ads was built with both three [00:05:00] P Marketplace sellers and one P suppliers in mind. Both advertiser audiences demand a seamless advertising journey from onboarding to reporting. [00:05:10] You can offer everything from sponsored products to video ads all in [00:05:15] one solution. Learn more@miracle.com. That's M-I-R-A-K l.com. [00:05:22] [00:05:22] Kiri Masters: Kara P, who is a principal at Catalyst Media Consulting, spent years at Target's retail media Operation [00:05:30] Roundel. She told me that Unlock brand budgets has been identified as growth white space ever since her earliest days in the category. Historically, unlocking these dollars required heavy internal [00:05:45] coordination across merchandising, marketing, and site teams plus. [00:05:50] Good faith investment from brands who understood that they wouldn't get closed loop media measurement in return, [00:05:58] that coordination problem [00:06:00] has likely crushed brand budget ambitions across the industry. When I profiled Brian Monahan at Albertson's Media Collective last year for my column at the Drum, he described that same gap. [00:06:11] He said as we tried to cross the chasm from shopper and trade budgets [00:06:15] to brand budgets, retailers seem to think they live in these isolated universes. His argument was that brand dollars are Darwinian. They go wherever derives the most sales, regardless of which retailer benefits. [00:06:28] So to win those [00:06:30] budgets, retailers have to plug into the ecosystem where those dollars already flow. [00:06:35] Alex Arnet, the senior director at Dentsu Retail Media Network Consulting Arm. Newstream Media sees this as part of a broader shift [00:06:45] towards retail media networks, meeting brands on their own terms, more self-service, more transparency, more proof of effectiveness. [00:06:53] For years, retailers have dictated the terms of engagement. Buy on our platform, use our [00:07:00] tools, accept our measurement. This integration really flips that. It meets brands where they already spend in tools they trust. With measurement, they can actually evaluate. [00:07:10] Catherine Maza, who we heard from before, expects other networks to [00:07:15] follow. She says, if this proves successful, it will likely set a precedent across the industry where other retail media networks will follow forming similar partnerships to unlock brand budgets. But she reveals a caveat. [00:07:28] Simply [00:07:30] replicating other networks models will not be successful. Each network will need to define its own differentiated path, whether that is through data, exclusive media partnerships, or unique customer data points. And finally, the [00:07:45] plumbing matters. Metta, CEO, Nikhil Raj, whose team delivered the technical infrastructure for this integration noted in a post on LinkedIn that the capability was built in weeks, not months. [00:07:59] The [00:08:00] approaches notable for its privacy safe installation, allowing both online and in-store transactions to be leveraged in real time while ensuring compliance. Hil, who was part of the founding team at Walmart ads back in [00:08:15] 2012, called it a full circle moment, the same closed loop measurement vision now available to the broader commerce ecosystem through interoperable infrastructure rather than a single retailer's world garden. [00:08:29] And as a [00:08:30] disclosure, man, router is a client of mine. [00:08:32] So wrapping up here, the pilot starts with online sales, but it will expand into in-store measurement soon. According to Christine Foster from KPM, that's gonna be the real test. [00:08:45] Kroger's physical footprint, which is over 2,700 stores, is where the majority of transactions happen when skill level attribution. [00:08:54] Connects a YouTube impression to an in-store purchase brand. Marketers [00:09:00] who think in terms of total market impact will probably start paying even more attention [00:09:06] As Christine Foster said, this isn't a time to rely on old playbooks. This is the time to build new [00:09:15] ones. That's it for today. [00:09:16] Thanks for listening and bearing with me today as I try and get back on track. I will catch you on Monday. [00:09:24]