Nich Weinheimer, EVP Strategy at Skai, shared his vision of the future of retail media in the discussion he held at Amazon unBoxed 2023. Read on to find out why Nich thinks marketers should manage their Amazon Ads and other retail media campaigns alongside other media channels and how tech is evolving to help marketers shift to omnichannel advertising.
How do you think advertisers are getting retail media strategy wrong today?
I would argue that in the excitement surrounding the explosion of retail media, much of the industry has focused a little too much on the retail in retail media, becoming obsessed with tweaking media strategies with as many minute retail signals as possible.
Don’t get me wrong: that remains super important and a key element of what makes retail media uniquely…retail. But as the channel matures, so should our approach.
This is a media industry, first and foremost. Managing the fundamentals of bid management, budget allocation, automation, and scale by leveraging unique IP (like cluster algorithms that run AI bidding on statistically insignificant long-tail terms at scale) ensures your core media will beat the competition. We, as marketers, need to remember what will really move the needle.
Skai has been building up to this moment for decades: developing unique machine learning and AI solutions against core media while balancing and innovating the enterprise automation and retail intelligence layers that drive the last mile of retail media performance.
The industry has focused a little too much on the retail in retail media.
Nich Weinheimer, EVP Strategy at Skai
So what’s coming next? What should marketers look forward to?
Amazon’s full-funnel media offering continues to guide the design of the future. Not just for retail media but more broadly for omnichannel media with phygital (digital and physical) conversion.
What I’m most excited about is that this future is ushering in a new era of “full-funnel, omnichannel, programmatic” marketing with retailers and their first-party data at the center of the universe, a universe that expands outside their owned media into full-funnel, open web – formerly known as programmatic – and targeted offsite digital media, like CTV, search, social, and apps
What do you mean by “full-funnel, omnichannel, programmatic marketing”?
For many seasoned digital media wonks, the term “programmatic” will immediately synonymize “display media” or “display and CTV/OTT” – anything purchased through the OpenRTB framework via DSPs/SSPs or exchanges.
We see brands and marketers and their technology solutions evolving into full-funnel, omnichannel programmatic (onsite, offsite, performance, and awareness alike) as the fabric of the modern media universe continues to evolve, cookies and third-party data deprecate, and retailers’ first-party data steps into the limelight.
Retail media introduces a variety of retail metrics, signals, and domain dynamics that demand a more holistic approach to managing media.
After retail media networks provided the basic digital marketing data (impressions, clicks, and conversions), brands demanded a more holistic data set inclusive of paid and organic share of voice (SOV), giving insight into the dynamics of the retailer’s or marketplace’s competitive landscape. Brands wanted their media to be competitor-aware, inventory-aware, and managed in the context of brand/retailer joint business planning, with measurement aligned to the holistic effect across the broader view of the entire business with the retailer.
The marketer wants to know when competitor brand A is out of stock or when SOV dips on a key term in retailer D, and they need the right software and automation to ensure that the complexity of taking those and dozens of other signals is directed at valuable decision-making and taking the right actions. The rich ecosystem of retail insights data aggregators and innovations like Amazon Ads’ STREAM and Retail Insights allows marketers access to intradaily retail and ads data across hundreds or thousands of products, dozens of retailers, and 10+ other open-web and traditional walled garden media publishers. AI-fueled recommendations identify the right action to take: a budget shifting here, a big change there, an ad paused, a new campaign lit up, a report automatically generated to inform the operations team.
If that sounds familiar, that’s because it is extremely akin to how DSPs and SSPs via OpenRTB operate today: looking at hundreds or thousands of signals and targeting settings, bids, and budgets to ultimately decide how and when to serve the best possible ad for both the supply and demand’s interests. Retail Media has catalyzed a paradigm in which open web and OpenRTB are married to and managed holistically with lower funnel, performance walled garden media using aligned adjacent ad tech on the foundation of first-party data. Enrich this with live market signals and retail insights, and you arrive at this notion of full-funnel, programmatic retail media.
What do marketers need to achieve full-funnel, omnichannel, programmatic marketing?
First-party retailer data is the gold of this full-funnel, programmatic, omnichannel future. Brands increasingly buy media on the backs of retailer data via Meta, Google, Snap, Pinterest, and dozens of other digital channels. As third-party cookies go stale and ultimately end up in the bin, these paradigms will only expand–not just in retailers’ walled gardens.
But first-party data isn’t enough. We believe you need the media activation tools, the ability to connect data, and executive decisioning solutions in one platform, all connected to the full-funnel, omnichannel digital media that matters most.
From there, the next phase of “programmatic” reality can take hold.
What should marketers know about working with third-party partners?
Let’s frame third-party partners like Skai in terms of AI. For AI to work, it requires deep data. Building mature learning models on how to use this data requires knowing what data is relevant, access to properly labeled, hygienic data, and the most important element: time.
A platform that is extensible to incorporate your business data into the technology is crucial to your success. Making the data work requires sophisticated labeling systems, like our unique Dimensions and Categories. This powerful yet deceivingly simple feature will ensure your data is usable, accessible, and customizable, making it more valuable to your organization.
To make data really valuable, it needs to be actionable. And management, automation, and optimization capabilities need to be core to the foundation of your partner’s platform.
Just like data, actions must be connected across channels and not focused on campaign-level support alone. Building bridges across walled gardens and harnessing the powerful capabilities beyond retail media native platforms alone are table stakes for sales and incremental growth. Flexibility in building customizable rules and defining business-specific KPIs of success to guide the technology is difficult and requires powerful algorithms like Skai’s.
Here’s the future of media activation: easily find the insight, easily determine the correct action, and easily execute with measurable success, regardless of channel.