local and mid-market qsr, retail and auto BRANDS CREATE NEW REVENUE STREAMS AND LIFETIME VALUE

April 10, 2022

The latest trend in programmatic advertising in response to the death of the cookie and birth of more privacy friendly advertising is media networks. Whether a RMN (Retail Media Network) or others for auto, QSR and other categories.

If you are like most marketers in retail, auto and QSR, you have come to rely on social and digital channels like Facebook to drive performance and have been wondering in the last several months why your media on these social channels is becoming less and less effective. Does this sound familiar?

The third-party phase-out of cookies was initially announced in February 2020, but Google accelerated buzz around it this month when Google announced that they won't be building "alternate identifiers to track individuals as they browse across the web, nor will we use them in our products."

"We realize this means other providers may offer a level of user identity for ad tracking across the web that we will not — like PII graphs based on people’s email addresses," the Google post wrote.

While numerous advertising agencies criticized Google's pivot, research has begin to determine the potential marketing impact. In a recent survey. GetApp, discovered that: 

• 41% of marketers believe their biggest challenge will be their inability to track the right data.

• 44% of marketers predict a need to increase their spending by 5% to 25% in order to reach the same goals as 2021.

• 23% of marketing experts plan on investing in email marketing software due to Google’s new policy.

So what is a media network and why should retailers, auto markers and dealers and QSR’s care?

Simply put, you can think of a RMN, AMN or QSMN as a collection of digital channels owned by the retail, QSR or automotive company, which is offered to third-party businesses for advertisement purposes. This allows these businesses to advertise to prospects who are already in a spending mood. Some of these new media networks will thrive and others will fail.

What will lead to their success and how can you take advantage?

In our opinion, success will depend on how you build data solutions and targeting in a privacy friendly way as well as ensuring you do so in a manner that does not take the consumer away from the channel or category. Today RMN’s from big retailers like Wal-Mart and others may allow for an ad to take the consumer elsewhere. This approach will likely see short lived success but could have long-term negative impact on the brand health and success of those allowing such media unless this path is with supplier partners that add to the long-term value of your own brand.

Those who capitalize on ways to drive more value from their customers and prospects both for their own business and for their categories’ survival using Pseudonymised data will prevail in our opinion.

Pseudonymisation means the processing of personal data in such a manner that the personal data can no longer be attributed to a specific person without the use of additional information. Such additional information must be kept carefully separate from personal data.

With the need for more privacy friendly marketing and a need for intenders to be supplemented as the cookie crumbles and other privacy changes take hold, QSR’s, Retailers, including Furniture and Mattress retailers as well as Tier 1-3 auto should consider collaboration to build powerful new networks. Working with your peers (perhaps through a buying group or through a franchise model) could not only greatly impact long-term success, but would also likely create new revenue stream for the category and the brands involved.

Imagine a large retailer that carries TempurSealy on their floors. Instead of using co-op to drive people to the showroom alone, why not allow banner ads on your site, sponsored by your brand partner (TSI, SSB, Ashley) or in Auto (Toyota, etc.) or in QSR (Pepsi, Coke, etc.). This becomes a win-win for both parties and also helps you gather more targeted and meaningful shopper data which can be used for re-targeting on other channels as intender data for digital channels continues to change and evolve.

Next imagine, working with a buying group or association to co-mingle some of this pseudonymised shopping data to help your greater performance group, franchise body or association.

LiveRamp, a leader in data management and targeting and a partner of our’s recently said;

“At a time when customers are demanding more from the retailers and brands they interact with, leveraging data collaboration effectively can be a key way to connect with consumers more efficiently and personally. Similarly, as the ad-tech industry continues to evolve, closed-loop measurement and data security are becoming table stakes for advertisers who want to reach valuable customers directly without relying on third-party cookies.”

While this concept of collaboration may seem scary or counter to the way you have built your business and category, times are changing and with this change, you must also evolve your approach. Collaboration in a way that ensures data is not tied back to the retailer from which it came allows brands in the retail, auto and QSR categories to learn from data and enhance customer intelligence by better understand changing consumer needs in more real-time. Imagine having more of this data during the lock-down when you needed it.!

Since COVID, consumers now expect personalized web experiences, relevance, products and messaging that meet and serve their interests. With proper use of insights brands can learn from shopper preferences to inform your media mix, your attribution windows as well as research and development. Trail-blazing partnerships will be able to iterate quickly, reaching interested markets with innovative offerings and products.

If done well, the above approach will not lead to better lifetime value from your customers, it will lead to tighter partnerships and alignment with your supplies and media partners because you will be able to stay ahead of the change in the market by using closed- loop measurement, improve upon persona profile definition, audience targeting, and campaign optimization leading to a much bigger share of wallet and LTV.

For some brands and agencies, especially in local and mid-market I fully appreciate how daunting of a prospect this idea may represent, but if you want to stay ahead of the market and grow share, you MUST be start this process, even if in small methodical ways. It would be a great time to have a conversation with your performance group, franchise group, corporate partners and suppliers and measure interest.

Marketers in the retail, auto and QSR categories have a suite of tools available for use to improve engagement with your brand, lifetime value and profitability leading to better loyalty and increased spend but selecting the right partner is critical. It is time you work with the right partner to help you establish or build the requisite infrastructure to give you control over the customer experience and your own destiny.

It’s not a question of if taking the next step towards building out your data and targeting plan or network should happen, it is more of a question of when. There is no time better than the present if you want to stay ahead of the marketplace.

Octillion can help you achieve success as well as stay ahead of the market’s change during a period when some of your traditional digital media is beginning to fail.