Implications of the Integration of Retail Media

A G Lafley, CEO of P & G said “Media can (and usually should) work together to create a cohesive brand experience.” This is certainly true, and emphasizes the importance of integration across all media, not just retail media when you are creating a brand experience. Lafley then continues:

“Yet all too often, there's not enough communication between the different brand and agency groups responsible for all of the media formats being worked on. We see this in the digital signage world all the time. The agency responsible for putting together an in-store TV promo frequently can't get the necessary content assets -- let alone time with the marketing/creative professionals from the brand itself -- and therefore has to reinvent the wheel. This not only translates into more work when producing the in-store spots, but also creates fragmentation when the in-store media doesn't conform to existing marketing goals and campaign styles”

In digital signage, or in-store screens, the content required is very different from a standard television advertisement. The timings are different and the kind customer participation is different. When you are passing something as you walk your responses and level of interaction cannot be the same ad if you are sitting in a comfortable chair watching television with your family. This leads to the need for specialists in the particular medium to produce the right sort of content. At the same time you need to ensure brand consistency In order that the customer can recognise the brand message without having to work at it. As Lafley points out, consistency implies the sharing of assets. This in turn implies a high level of communication between the teams of specialists for each media.

It begins to sound like we are talking about the creation of an agency that just does retail media. This could solve some of the communication problems as well as enabling asset sharing. At the same time it would give the customer a single point of contact ensuring that the brand message is not given different interpretations each time it is passed to a relevant agency. So far this sounds good, so what are the cons? The major con is that no such agency exists. There is no one out there who does everything across all media to a sufficient standard to be the first choice for all media.

Practically speaking, what is the answer? A first step would be to minimise the number of agencies involved so as to allow as little as possible to fall through the cracks. The second step would be to try to persuade the agencies that display most competence to start taking on additional media and expanding their services. It should be possible to find an agency that specifically handles retail media and then persuade them to expand. They could do this either through bringing the new media in house or by evolving close partnerships with the best in breed of the non-retail media agencies. Putting agreements in place that they will share assets on joint clients as well as specific agreements about how this will take place.

There would be more steps beyond this before we reached the best of all possible worlds, but for the moment it would be good to hear about agencies who are moving in that direction. Failing that, are there any who are offering good reasons, beyond “that isn’t how we work” for why they are not doing this.

Rufus Evison

Penetration or Loyalty

I’ve been discussing with dunnhumby’s Rob Turtle the question of penetration vs. loyalty. My interest was renewed after attending WARC’s recent Measuring Advertising Performance where Andrew Ehrenberg’s work on this was quoted in the first presentation and then referred to several times over in subsequent sessions.

This is a very simplistic synopsis (but it reflects how it was raised by speakers at the conference): Ehrenberg and his team at the Ehrenberg Bass Institute have concluded that in many situations ‘the main driver of [market share is] not customer loyalty but large differences in market penetration – the sheer number of customers each brand has.’ Consequently, the rallying call by the speakers was to not employ marketing strategies focussed on loyalty but instead to focus on driving increased penetration.

The theoretical model behind this is the Dirichlet.

As Rob Turtle eloquently explains:

Dirichlet is a choice model – it allows different customers to buy different stuff differently. To handle that mathematically, it tries to model the distribution of customers for a particular measure (for the technically minded, the model assumes zero-order Poisson choice process, Gamma purchase incidence/ rate of purchase, and multivariate Beta (=Dirichlet) brand loyalty).

Sticking to the coffee example {this is an example used by Ehrenburg] … the Beta distribution for loyalty might look like this (weight of purchase on the x-axis, number of customers on the y-axis):



There are two ways in which we can grow sales … either get more customers in (blue doted line), or shift the mode of the distribution to the right (red dotted line).


What Ehrenberg points out is that it is easier to get more customers to buy you, than it is to get customers to buy you more. Do one doubts that one can get new customers in … however, there is simply a limit to how much coffee someone can drink in a fixed period, and every distribution yet observed is positively skewed (i.e. has the mode on the left). It is this thinking that drives the conclusion.

This having been said, he also talks about “double jeopardy” which states that “big brands not only have more customers, but those customers tend to buy them more often as well” (the flip side being that small brands have less customers that buy less frequently). Which would seem to confuse the issue again!

So what might this mean for penetration vs. loyalty? As a matter of principle, I think that both Rob and I would disagree with any statement that simply says ‘penetration is more important that loyalty’ – trial that does not build repeat purchase will skew the distribution even more to the left. As Rob says, ‘reading between the lines, Ehrenberg would agree as there is a tacit admission that we want our trialists to then become typical buyers of the brand (in the example cited, buying 3 times – not just once!) In this way it does indeed drive the moments of truth … marketing gets the trial, the product gets the repeat. (Which incidentally explains the double-jeopardy: products have higher market shares because they are genuinely better products … which when I try one makes me more likely to repeat as it is better etc.)’

Graham Thomas

Retail media: Digital Signage prospers in economic climate

The Platt Retail Institute has recently published a report on digital signage discussing its effectiveness in the banking sector. This document is particularly relevant to retail media today as it details some of the signs of the economic downturn. We discussed previously how this down turn could actually be a good thing for retail media as it leads to more decisions being made at the point of sale when the consumer has a full understanding of what is available and how much it will cost them.

It would be nice if we could say that the research suggests that the poor economy may be a good thing for digital signage as a retail media, but to be honest that would be something of a stretch. AKA
reason that things have already become difficult without affecting the medium and then go on to say that the medium is about driving sales directly, which ties in well with our thoughts. Where we cannot agree with them is that a failure to experience problems is in itself a good sign for a given retail medium.

So does the report suggest that the medium itself is good? Well yes it does. It suggests that banking should be spending more on point of sale media and digital signage or screens in particular. Why are they not already doing this? Well in part because creating digital signage is costly and for a large investment more research to back up the effectiveness is required. This is the issue for banking, but for those who wish to advertise their products on screens there is another alternative. It is always possible to make use of the screens in a retailer who already has a digital presence and measure the results. Remember to make sure that what is measured is meaningful! That way the problem of investment is avoided at the same time as adding to the available data to ensure that there is genuine ROI being created. It may even be possible to get a certain amount of free PR by publishing the results. If this is the path that you choose to take then do feel free to let us know and we may even write about them for you.

Another way around the cost of investment is of course not to invest. With the economic down turn maybe the price of screens will go down and the medium will become cheaper? Not the sort of advantage we were talking about getting for retail media from the economic climate, but perhaps an incentive for the retailers to invest further down the line.

As AKA also point out, as the barrier to entry becomes lower more players will move into the market for screens, making them available in a wider and wider variety of retailers. Greater adoption of screens in any context makes them more accepted as an advertising format, both by the advertisers and by their customers. Longer term this is good news for the medium. The growth in non-retailer based digital signage is potentially a sign (no pun intended) of the future growth of screens as a retail media.

All in all it does not show that digital signage will remain free from the effects of the economy in the long term, but it does suggest that using it correctly could free it from those effects.

Rufus Evison

Retail Media and the Mcnamara Fallacy

“The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can’t be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exit. This is suicide.”

The McNamara Fallacy is named after the Robert McNamara, the US Secretary of Defence in the 1960s who was obsessed with quantifying the Vietnam War in a way that tended to ignore what was truly going on.

And Albert Einstein once said: "Not everything that counts can be counted and not everything that can be counted counts!"

In the world of marketing we have a wonderful tendency to give too much importance to that which can be easily measured but which has no value. A prime example of this is advertising recall. It has absolutely no value what so ever because whatever measure is determined no other outcome can be linked to it. (And cf The Rosser Reeves fallacy.)

Conversely, we make no attempt to measure the unmeasurable. Take something like creativity. We all know it’s essential none of us can get anywhere close to quantifying its intangible qualities. So instead, people try to convert the intangible into to the tangible most often when it comes to advertising to measuring something like engagement with advertising and likes/dislikes.

In the world of retail media we suffer from the same conundrum. Recently, I was looking at a presentation from a major supplier of in-store media in the US. Their justification for success included such measures as:

- 31% average Aided and Unaided brand recall

- 51% of ad recallers said that the ads influenced their purchase intent. (So only 16% of shopper claimed that the ads had any affect.)

- 84% of shoppers agreed that the content was a good thing to offer their customers

- 72% of shoppers said that the in-store TV has useful information about products sold in-store.

All these measures are completely vacuous. They are measured because they are measurable not because they have any significance.

Graham Thomas

To paraphrase a recent Google press-release, the Holy Grail of media measurement is to link media activity to shopper behaviour - that is sales. If Google get it for on-line media I reckon we should get it for in-store media.

Retail media review: Why we buy

I have just been reading why we buy and felt the need to recommend it to the users of retail media. It is not intended to be a book about retail media and so some practitioners may not have come across it despite its age. The title suggests that it talks about why we buy, but in fact it talks about how to position media and product so as to be effective advertising.

On caveat is that the author does tend to conflate fact and opinion, so it is important to make sure to separate them out as the book progresses. If one takes his facts, uses them to produce actions and then measures their effects then it is possible to gain a lot from the book. If instead one takes the authpr's word for what the facts mean should be done, and does them in an uncontrolled manner then the result will be at least as bad as can be expected.

Another thing the author does is describe the way in which his company has set about measuring things within the retail environment. Some of it is so straightforward that is can be copied. Some of it is not. Providing care is taken to avoid the McNamara Fallacy then some useful gains can be made out of measuring the simple things and one might even do well employing experts to measure the more difficult things.

In summary this book, why we buy, the science of shopping is worth reading as a light read, as a source of interesting factoids and as an inspiration to do things with your retail media that might make a difference.

Rufus Evison

Featured retail media: Shopping trolleys

This week we are going to shine a spotlight on shopping trolleys as a star of retail media. This is the first retail medium we have featured, so there has been hot debate about how much detail makes sense for a given article. The decision has been to try it and see, with the option to do follow up articles if feedback suggests it would be worthwhile.

Clearly shopping trolley media fall into two main categories:
1) Static display
This is the addition of a creative to some combination of the sides and the handle of the trolley.
2) Dynamic display
This is a video display that may, or may not include other features such as location detection, loyalty card tie up and motion sensitive displays.

This article will only look at the first of these as the second is too complicated to fit into one article and too infrequently used to be a featured retail media at this time.

So what are shopping trolleys best used for? Well first the obvious, shopping trolleys, like all other retail media are best used in combination as part of an integrated campaign.

They are a good reminder to the customer of an offer they are already aware of, so if you have a radio offer you want to tie them to, this could be the way to get in-store effectiveness. If you can arrange to have the in-store location incorporated into your creative then they can become a call to action and actually prove useful to the customer. This matches with the best practice for floor graphics, another retail media which can work particularly well to highlight an in-store promotion.

They are also good for general brand building as they are visible throughout the shopper journey. If you are trying to raise awareness then a constant/frequent reminder is often best. In this case you would want to use them in conjunction with roadsides, fleet media or similar brand building tool as part of a coherent whole.


How are they best used? Here the important thing is to make best use of the limited space available. Clarity is of key importance. Try and keep the number of words as few as possible. If the optimum on a poster is 5-7 words then the optimum on a shopping trolley is probably less. As mentioned before, try to get an aisle location if promoting an in-store offer; it will use up 2 words (e.g. Aisle K) but will be worth it for the additional conversions it provides.

If the retailer has a particular color scheme associated with offers make sure that if your campaign is an offer you use their colors. This is more than just a courtesy. Shoppers in a particular store are aware of how the retail media work in that store and will have trained themselves to spot offers efficiently. This will have a measurable impact on uplift.

Make sure your branding is clear and distinct regardless of whether you are promoting an offer or raising brand awareness. In the former case you will help the customer to find your product and in the latter your brand is what you need them to see. As always a clear message is important, though in some contexts humor can still be effective despite the size restrictions. If you are working on brand awareness then the same level of humor should be retained as in the rest of your campaign even if this particular retail media (along with pump nozzles) requires more work.