Retail Media: Not everything that can be counted counts, and not everything that counts can be counted

Retail media are easily measurable

In retail media we are lucky that there are great opportunities to measure our effectiveness. CPG and FMCG retail media buyers are working in partnership with the people who are selling our wares, our retail media supplier. We can ask them how much they are selling of what and to whom. It is possible for us to get real insight into how our customers are behaving and what the effects of our retail media spend are.

Those who know me will know that I am fanatical about measuring results and then taking those measurements seriously. It comes as something of a surprise to find myself saying that I wonder if retail media experts are taking this too far? It may be that this leads to discarding some things simply because they cannot easily be measured. Might we be deciding that retail media that are easily measured will allow us to look good by demonstrating a real return? With the major economies of the US and UK entering what looks like a significant downturn being able to demonstrate a return is very important for job security. Does this lead to throwing out good retail media simply because they are hard to measure?

Except the difficult ones

As Max says "In an increasingly quant-driven marketplace, it’s easy to obsess on what you can count and disregard the rest." retail media contains a few examples of the "hard to measure" variety. Measurement of sales shows that adding them to your media mix gives a measurable sales uplift, but it is not currently possible to measure their actual effectiveness because there is nothing show tell who has viewed them and who has not. Worse than that there is an observer’s paradox here.

The Heisenberg uncertainty principle says there are limits on what can be measured because the act of measuring affects the thing being measured. This doesn’t only apply to subatomic particles, it can apply to retail media as well. Taking floor graphics as an example, there is a provable sales uplift through using them correctly but there are still many customers who are not even aware they exist. If one tries to measure who has viewed the floor graphics this will make these people aware they exist and so will affect the customer experience. At this point many marketers are switching off and saying that they cannot be measured and so it isn’t possible to reliably change their effectiveness. This is exactly the sort of thing that Einstein might have been talking about in his quotation about what really counts.


But even there retail media can tell us something

Instead of taking the path of least resistance it is necessary to go further down the path of trying to measure them. Granted this will affect the measurement so it will not be safe to rely on generalising it without thinking, but it may still prove useful. Even if it does not say anything definitive there is the fall back of the known return from floor graphics.

So let us assume that a survey to find out who has seen the graphics is conducted. Where does this lead? One can measure the total sales uplift before and after the survey and then examine the difference. The difference is likely to be positive as those who did not know floor graphics existed now do, from the questions they have been asked, and so are more likely to notice the graphics in future. Regardless of the scale and direction of the difference made by the survey it is now possible look at how the people asked compare to the whole customer population in terms of uplift in subsequent campaigns. You can gather a lot of data that may or may not make floor graphics entirely accountable but will tell you some more about how you should use them and when. Who knows this may even prove that for the surveyed sample uplift has improved. If that is the case the next step is to look at how to mirror this across the whole population of potential customers.

Einstein was right and yet it is still possible to make a difference to the less measurable retail media.

Rufus Evison
With thanks to Max Kalehoff who provided the Einstein quotation that was so apposite to this article that I made it the title.

Microsoft retail media not a threat!

The natural reaction to hearing that Microsoft is moving into your space is "how can I protect myself?” Such is the strength of the old "Microsoft as evil empire" image. In fact there is no need to run for cover. All Microsoft have done is brought out their own retail media: a retailer based browser that they can feed programmed content to on a targeted basis.

The way it appears to work is that your shopping cart, instead of your normal static retail media, will have a video display. This will then be linkable to your location in store to allow strong contextual targeting. The next step, which seems to be part of the package, is linking offers and content to your past behaviours through a loyalty card mechanism.

The idea behind this is not new; there have been intelligent cards and hand held devices for use in store available for some while. These have ranged from the cart just described all the way through to the "shopping buddy" that has been around in retail media for a while. The general format is that they present you with a device to scan as you go, and then serve you advertising, information or other store related services as part of the deal. The scan feature reduces time at checkout which is a plus for both the consumer and the retailer and the advertising gives us another retail media to play with.

So how is the Microsoft offering different? The real answer is that it isn't. It is a fairly standard looking device with fairly standard looking features. The thing that will make the difference is simply that it comes from Microsoft. It therefore has money and marketing expertise behind it. It can afford to be sold in as a loss leader, and representatives can make slick presentations at board level to major retailers. This means that there is likely to be more significant adoption and the consumer is likely to become acceptant of it that much faster and that much more thoroughly.

All in all if I were running the shopping buddy product I would be trying to see this as an opportunity to gain general acceptance and still quaking in my boots. From a retail media point of view I cannot help seeing it as an unequivocal opportunity with no visible downside.

Rufus Evison

Areas of Retail Media

Retail Media can be categorised into three main areas as follows:

In-store media
These are the media that formed the original retail media from which the rest of the area grew. They include such things as floor graphics, shopping trolleys and screens. All have the inherent contextual targeting of being at PoS. All have the inherent safety of being within a large retail environment. Most of them do not have much more in the way of tagerting than their placement, though this is not trues of all the retail media in store. For instance screens can have different messages at different times or in different parts of the store based on what clients visit those store zones at those times.

Out-of-store media
These are the media that were first brough into the retail media space. They began with looking at the larger retail environment and then grew to include areas that were in that environment for ate least some of the time. Generally these include such media as fleet, petrol pumps, car park 6 sheets and so forth. They are particularly good for linking in-store witht he rest of the customer journey. If you have a magazine ad you might want to remind the customer about it as they approach the store. If you have an in store DVD launch you might want to publicise it on fleet and station media.

Home Media
These are the furthest step outside of the retail environment as they are media that a customer migth consume at home. The reason that they appear as part of the retail media space is simply that they are supplied directly from the retailer and so clearly should be part of anything called retail media. They include such things as branded direct mail, store magazines and packaging media. They have a potential impact in term of long term branding due to being able to sit around in a customers home for a very long time. In terms of targeting they have a different sort of contextual targeting than the in-store media as well as the posibility (in the case of direct mail) for completely individual targeting based on opt in customer data sources.

So far this division of retail media, while it seems a natural divide, is still new. It is just spreading across the industry, but if it gains the kind of acceptance that looks likely we will re-edit our Retail media summary to include the division for each medium represented there.

Rufus Evison

Retail Media – what sort of questions should brands now be asking?

Retail media as a separate area is on the cusp of coming of age. It is not quite there yet and sometimes it seems like it’s two steps forward and one step back. Nonetheless brand and shopper marketing teams are looking to in-store media as being more than just glorified POS supporting a promotion or a new product launch.

This throws up many questions. Not least how do we compare retail media to more traditional non-retail media in terms of reach and frequency – the standard measure still used by media agencies? In turn it can be asked, are these relevant metrics for in-store for surely isn’t one of the great values of in-store media is the ability to directly (in some instances) measure its impact on uplift? Well yes but as one very very senior CPG media leader has also stated very clearly they need to know how media value can be attributed outside just uplift. What’s the store footfall? Is it possible to calculate a GRP-type measure for individual media or at least the store zones they’re in? Are shoppers actually aware of retail media? Do they perceive retail media in the same way as the other media they watch and read? Does a retailer’s free magazine have the same standing with its readers as a paid for magazine?

If retail media wants to be treated the same as other media then what additional added value does it offer over other media? Can it build brand equity? Can it drive long-term change or just immediate-but-not-repeat purchasing behaviour?

There are lots of hypotheses swimming around but currently few answers.

Rufus Evison

Evaluating retail media and the questionable cause fallacy

The evaluation of retail media is one of the larger issues for buyers today and there are a variety of effects that contribute to the confusion surrounding it. Here we look at one common mistake that actually applies to advertising outside of retail media, but which may suggest a better way forward specifically for retail media.

Confusing cause and effect is a specific example of the Questionable Cause Fallacy . The QFC has the general form:

- A and B occur together.
- Therefore A is the cause of B or vice versa.

In fact, there may be no common cause that links A and B.

This fallacy is made when it is assumed that one event must cause another just because the events occur together: the conclusion is drawn, without adequate justification, that A is the cause of B simply because A and B are in concurrence. It is possible that cause and effect are both present but the mistake is in choosing which is which, or it is possible that both are caused by a third event. When people put up umbrellas cars generally become get wet, but putting up umbrellas does not cause cars to become wet, the rain causes both. A typical mistaken causal effect might be:

- People wear shorts when it is sunny.
- People wearing shorts causes sunny weather.

To bring this closer to the reality of retail media, Rosser Reeves, who fifty years ago was head of the Bates advertising agency in the US, demonstrated what became known as the 'Rosser Reeves Fallacy'. He showed that consumers aware of his client’s ads were more favourably disposed towards those clients' brands across a range of measures, including likelihood to buy. Did this mean his advertising was more effective?

No. Generally, brand purchasers have a higher awareness of a brand's advertising than non-purchasers. We tend to remember better those things we like or are familiar with. So rather than those aware of the ads being more likely to buy the brand, it's actually those who buy the brand being more aware of the ads.

Is there a direct lesson for retail media here? Yes. It means that when we look at shopper buying behaviour, we must not jump to conclusions that seem obvious and right lest they in fact prove to be a fallacy. This is part of the key challenge to retail media. In-store advertising suffers the same plight as other forms of advertising: namely that proxy measures such as brand and advertising awareness are used to measure effectiveness.

There is not one single piece of proof that demonstrates that increased awareness is a measure of advertising's ability to build sales. Perhaps the only measure of success for retail media that has any validity is the ability of adverts on retail media to build sales. You could argue that building brand is important, but surely this is true only because in the longer term it adds to sales?

Given the success of loyalty schemes in measuring sales, down to at least a household level, this proxy measures should not be necessary. It is possible to do better and retail media, though being sold in conjunction with the retailer has the advantage of being able, at least in theory, to take advantage of sufficient information to create a truly valid measure of success. We will discuss how greater information about purchasing behaviour may lead the way to better metrics in a later article.

The in-store marketing summit, a date for your diary.

The in-store marketing summit is due to be taking place April 16-18 in Oak Brook Illinois. In-store media account for a significant proportion of the retail media space and this summit will be present some of the biggest names in Point of Presence marketing. The agenda includes such luminaries as Graham Thomas and Mike Hess who should both be well worth the price of admission.

To register will cost $2000 (around £1000), which is cheap enough that the major costs are time, travel and accommodation. If you are serious about retail media you would be well advised to attend. I can particularly recommend Graham’s talk on the 18th, of which I have had a sneak preview .

Rufus Evison

Summary

Where: McDonald's Hamburger University | Oak Brook, IL
When: 1pm Wednesday 16th April to 1pm Friday 18th April
What: An educational and networking conference for in-store marketing professionals.

Media Integration, or why highlighting a particular retail medium is difficult.

When asked how a retail medium should be used the answer is always the same: in conjunction with other retail media. In fact even that is too limiting; retail media work best when used together with other media, whether those media are in the retail environment or not. A later article will pick out each media and talk about the pro’s and con’s of it individually. Because of this it is important to emphasise that in practice you would not actually use a retail medium individually any more than you would use a single T-shirt sleeve individually. Clearly this is true of all media, not just retail media, but it needs emphasising here.

This is not to say that any old combination of media will do. What kind of combination will depend very much on what you are publicising. If you are publicising a two for one or 'bogoff', you probably want media that can draw attention to the product on the shelf as well as something at the entrance or in the ambient environment to make people who may not be passing the product aware of the offer so that they can search it out. Also you may wish a reminder at the checkout.

In terms of drawing attention to the product offer either floor graphics or shelf ends are fairly good retail media to use, though if a screen could be arranged right above the product that could work well too. In terms of ambient media in store radio could work well. This could then tie up with the same radio piece on external radio to prime shoppers before they enter the store.

The heavy reliance on retail media is to do with the nature of the offer as something very much tied to in-store behaviour. If on the other hand you were considering a branding exercise there would need to be a much larger spread of media, where only certain retail media would be appropriate. A good example might be an automotive campaign where in store media would be minimal, just enough to maintain a place in public perception. Perhaps some sort of in store poster and maybe car park six-sheets and fleet media.

A DVD launch would fall directly between the two. A heavy external media approach with magazines, (rail) station six sheets, fleet media and then some closer to point of sale with maybe floor graphics and shelf ends to highlight the product position. Media integration is an essential part of effective media usage. In a later example we shall talk about how the different media to integrate can be chosen and more importantly how they can then be proven.

Rufus Evison

Graham Thomas

As promised, here is the first of our series on Retail Media Stars.

Graham Thomas is currently the head of dunnhumby Retail Media which, as the name suggests, is the retail media arm of the retail experts dunnhumby. According to dunnhumby doctrine this means he uses a combination of IT, data analysis, creative skills and business expertise to treat marketing as a science. The application of science to retail media is long over due as the flurry over measurement suggests. He currently specialises in emerging digital technologies and the creation of mobile advertising models managing, developing, creating retailer-owned media (in-store, out-of-store, in-home, .com, magazines etc. as well as marketing and media evaluation and optimisation (MMO).

Graham Thomas originally worked outside of retail media, spending much of his career with Saatchi & Saatchi. He was Vice Chairman of the UK agency during the late 1980s and then worked as Regional Director in Asia/Pacific where he was awarded Ad Ages's International Agency of the Year.

Thomas is passionate about the utility of retail media and has strong views that advertising agencies need to revise their thinking and work out what creative content will work best with which group of consumers in each medium. “Despite what they (the big creative agencies) claim, they are still driven by the profitable economics of the 30-second television spot. They need to realise this will become of secondary importance to most brands.”

Much of his career was spent working on P&G business across a broad range of brands. Among his achievements he was able to build Ariel to be market leader in the UK during the 1980s; he led the agency team that transformed the European Pampers business and drove it to a 50% share; in 1991 he was handed P&G’s Robert V Goldstein Award for global advertising excellence for the work done on making Oil of Olay the pre-eminent global skincare brand; during the 1990s he helped build H&S to be one of the largest hair-care brands in the world and he helped introduce a raft of brands into Japan, China and across Asia.

Rufus Evison

Oh and Graham is rumoured to be the creator of the Milk's gotta lotta bottle slogan showcased below...

Retail media in focus due to economic downturn?

There seems to be a certain excitement amongst the retail media specialists. At least one that we know of is gearing up to capitalise on the current mindset of consumers. I cannot say whom at this point, but certain retail media experts seem to be taking economic troubles as an opportunity rather than a set back.

The climate in Britain today is tough for CPGs (FMCGs to the British). Eithne O’Leary, an analyst at Oriel Securities, said: “In our view, this morning’s statement puts the UK consumer firmly into recession territory and we expect 2008 to more closely mirror conditions seen in the early 1990s.” Retailer share prices are being slashed. Sir Stuart Rose, Marks and Spencer chief executive is saying that “These are the toughest conditions I have seen for a decade.” as he calls for an interest rate cut. This suggests that the customers are likely to be being more careful with their budgets and actually looking at what they are buying before making a final choice.

From a general sales perspective this is clearly bad news. Branding is no longer going to be enough without some sort of reinforcement. From a retail media perspective this seems to have the potential to be good news. Retail media, through being at the point of purchase, may actually gain some influence from this additional customer discernment.

If you can get the right message about value across as the customer is trying to decide about what to buy this has to be good news. Retail media will need to carry the right messaging for the economic climate. This is not a time for and in-store promotions using the catch phrase “reassuringly expensive”. With poor messaging retail media would be in a position to both prevent sales and actively damage brand; with the right messaging you could gain loyal customers who understand your value.

Who knows, with the right message, retail media, through being in the right place, could actually be in a position to fulfil the promise of that mystical 70% of purchasing decisions at point of sale?

Rufus Evison

Are retail media safe?

Some media are not suitable for some brands and vice versa. Most up-market brands will not advertise alongside things which they feel will besmirch their brand image. Obvious examples of this are pornography and drugs related content, but there are others that are less obvious.

So the question arises, are retail media, by their very nature, a set of 'safe' media? Can any brand use retail media without worrying about being seen as damaging their brand equity? In some sense the answer has to be yes, as retail media, through belonging to big retail brands are already careful about how they appear and will not be seen as tawdry in the way that, for example, untargeted web advertising can sometime be. Many of the brands that will use retail media are already available through retail outlets, and so cannot have a problem with being associated with the retailer and hence can assume the media are safe.

Others, such as some of the big automotive firms, are not sold through standard retail outlets but their purchasers will still by their food through them and so there is likely no downside to using retail media for advertising. In fact this brings us to another way in which retail media can be considered a safe set of media. It all hinges on two obvious facts:
1) Almost everyone uses supermarkets and other big retailers (that is why they are big).
2) Almost no one is ashamed to admit they use the big retailers.

What these facts add up to is that the big retailers are not something you should be ashamed to have associated with your brand. Good news, a safe set of media at last.

In a purer sense, of course, there is no such thing as a safe media. An anti-consumerist campaign decrying big business, were it able to buy retail media in the first place, would probably find its image was detracted from by being seen as paying money to the very companies it was campaigning against. This is a fairly artificial example, but the point remains that there will always be some people who cannot or will not associate with some media.

So the conclusion:
Unless you are in a fairly unusual situation retail media are a safe set and you can use them without continual checking every time to ensure you are alright. If you are in an unusual situation that should be obvious form the outset and you are probably wondering why you bothered reading this whole article.

Rufus Evison