The Future of Ad Targeting – Why Retail Media is the Solution, Not the Problem
The tide of privacy is coming in, and it feels like the water is rising fast. Eleven U.S. states now have consumer privacy laws in place, and four more have bills in committee. Meanwhile, a recent survey found that 42% of U.S. consumers are concerned or very concerned about how big companies are using their data.
Combine all this with the coming cookie-pocalypse, and it’s easy to see why brands are concerned about their ability to target and personalize advertising at scale. They’re worried that the ads themselves will be less relevant, there’ll be more wastage, and that returns on ad spend will fall as a result.
The good news is that in Europe, where the data protection laws are among the toughest in the world, we’re finding that retail media offers a solution to the privacy problem. Over here, retail media networks haven’t grown in spite of General Data Protection Regulation (GDPR), but because of it.
Retailers are now the key data owners
The reason is that retailers are now the only ones who have explicit, permission-based data that is also attached to shopping behaviors; what customers buy, how they buy it, what they browse, what they look at. As long as the retailers are doing the right things when they collect the data and getting the right permissions, their media networks become a massive opportunity for advertisers.
Retail Media Summit UK
Where: Shoreditch Studios in London
When: Oct. 11, 2023
Register: events.p2pi.com/retailmediasummitUK
What’s more, data sharing technology has advanced very quickly. That means brands and retailers can combine their data in a privacy compliant way to improve their targeting and, crucially, measure the impact of campaigns in the backend.
So the message from Europe is that advertisers don’t need to fear the impact of privacy legislation and consumer concerns. But in order to gain – or maintain – competitive advantage, they do need to embrace retail media networks now. That means:
- Building a privacy compliant tech stack. Ensure all of the elements of your current tech stack comply with the relevant privacy regulations, along with how you collect and compile the data, how you hold it, and how you transfer it. And make sure you work with the right partners, people who understand the relevant privacy legislation, so you’re sure you’re doing it right.
- Earning your customers’ data. When you’re asking customers to sign up for a loyalty scheme, make sure it provides real value for them and be honest with them over how you will use their data to help them. A recent survey found 83% of consumers are willing to share their data if you provide them with value back, and a more personalized experience.
- Using the data you collect in the right way. Building the right customer segments to target is a balancing act between getting the right scale and the right accuracy. If your targeting is too granular, you won’t reach enough people to have any impact. But if your segments are too large, you targeting will be too broad and you’ll be wasting budget.
- Linking that data back into the store. That’s where 90% of sales happen, so make sure you’re using that first party data in an omnichannel way. You can target people offsite using that data via e-commerce platforms, but how do you continue that experience when they’re swiping their card in store? Can you use things like digital screens to target people using that first party data as a guide?
There’s a lot more we can pass on from our experience in setting up and running retail media networks across Europe, so we’re very excited to be running Retail Media Summit UK, in partnership with P2PI, in London on Oct. 11. There’ll be representatives from ASDA, Dunnhumby, Morrisons, Co-Op, Currys, and a number of U.S. retailers, and we’ll be talking about this subject in more detail, and sharing some learnings across the Atlantic.
