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Recently, Skai held ShopAble, a pop-up shop-inspired in-person conference focusing on retail media advertising. It was an amazing turnout in New York with clients and industry experts fired up to talk about the ins and outs of this incredibly fascinating channel.
In the first session of the day, Retail Media – Let the Games Begin, Skai’s General Manager, Strategy, Nich Weinheimer, shared some of the recent findings from our new research, The State of Retail Media 2022. In this complimentary report, Skai and BWG Strategy surveyed mid-level and senior-level decision-makers who spend a key portion of their week involved in retail media to better understand how marketers are approaching the channel.
After presenting a handful of the report’s insights, Weinheimer invited three expert panelists to react to some of the findings.
Watch the entire session on YouTube now
And download The State of Retail Media 2022
Excerpt from “ShopAble 2022: Retail Media—Let the Games Begin” session
The following is a portion of this conversation:
Weinheimer: Let’s revisit some of the survey data. When we asked you what are the two biggest challenges today facing retail media marketers, 44% cited driving positive ROI as their biggest challenge, 33% said proving incrementally, and 29% reported measuring success in a way that’s meaningful to my organization.
We also asked what critical challenges might slow investment growth in retail media programs going forward and 22% said it was poor our ROI compared to other ad channels, 20% said supply chain issues, and 18% said proving incrementality.
Rick, let’s start with you on this one. How do brands need to set themselves up to insulate against some of these concerns—or are any of them strictly out of their control?
(Founder & CEO, RMW Commerce Consulting) Rick Watson: When I think about where these brands are falling down a lot of it just starts literally with data.
Do you have the data you need to make any decision? And not in a generic way, in a very specific way—meaning SKU by SKU. I was talking with someone earlier and we were asking ourselves what percentage of brands do you think actually know their SKU-level net margin? Meaning that they can attribute their advertising and supply chain costs at a SKU level more than every quarter. The number is less than 5%, in my opinion.
Online retail is hand-to-hand combat every single day. Who is squatting on your term on Amazon? Who is bidding you up? Like, who is this brand that literally did not exist last month, but now they own the top three spots? Why is that?
If you don’t know your profitability then you can’t understand if it makes sense to chase them or not chase them. Should I be pulling back? Should I be raising prices because my stock levels are running low, so I can boost up my margin a little bit?
Weinheimer: Maybe some of the contributing factors are at play outside of the organization—such as if a brand is facing a breadth of retailers that they have to invest in?
Watson: Most brands need to start simple. Can we prove value for the channels that we’re in and not be in 15 channels to start out? Most brands, if you haven’t nailed Amazon, should figure out Amazon for a couple of years and get successful there. Then we can start branching out. The reality is most media teams at a brand have two or three people who are doing the actual work. How can they manage and look at ten dashboards a day?
Weinheimer: It’s those who can adopt the test and learn approach that might get some of that first-mover advantage, so I think there’s kind of two sides to that coin, Andreas, any thoughts here?
(CEO & Founder, Crealytics) Andreas Reiffen: Measurement, in general, is sort of the holy grail of any sort of advertising. When you take a look at what we did with Google and Facebook—the tracking methodology—we got used to clicks on some ads and we somehow presumed that the purchase was triggered by this click on an ad. And then, at some point, there was eBay, Adidas, Topshop, and many others that switched off portions of their advertising and they realized nothing different happened. They got sales without having to advertise and now take this problem and put it into this retail media and we have [these measurement challenges] you showed on your slides.
I recommend that brands really understand what the tracking mechanisms are to put things into perspective. Just to give you one example, if you run Sponsored Products ads with a post-click tracking mechanism versus post-view, this changes the whole game like 7X ROAS. So, you have to really understand what the numbers are and what they mean. On Google on Facebook, you can run incrementality tests doing split audience-based. But, in the retail media environment, this doesn’t work, so all you can do is sometimes switch off an entire channel and see what you are truly getting.
Weinheimer: It’s interesting to think about blending measurement. My ROAS is amazing post-view, but maybe I need to blend it with post-click and have one measurement. That may be PhD-level stuff to get to where you have in that. But initially, If I can just find out that my competitors are out of stock on a given channel then that retail signal is good enough to drive performance
Elizabeth, any thoughts on this one?
(Sr. Director, Strategic Marketplace Services, Tinuiti) Elizabeth Marsten:
I actually had an intern who’s a master’s in data sciences candidate. I had this massive set of data that I didn’t know what to do with so I asked them, can you please make sense of this? We actually kind of got there by the end of it, though.
To your point earlier about the different tensions that come into calculating real ROI, I mean, in some cases, if your number one customer is Walmart, what do you really have to pul? If they’ve signed you to an annual agreement, then you can’t.
Reiffen: Right. You wouldn’t pull back entirely because you have to maintain these relationships and that’s the slight difference between spending money on Google versus spending money on Walmart on any retailer network.
Watch all the ShopAble 2022 sessions on the YouTube ShopAble 2022 playlist
For more information on Skai’s Retail Media solution, contact us to schedule a brief demo and see all of our cutting-edge functionality for yourself.
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