The era of convergence in media is being spearheaded by the trend towards monetizing companies' assets including physical stores, apps and customer data. This trend is leading to the emergence of retail media, the increasing crossover between digital media channels enabled by technology. This is a widespread development that encompasses channels traditionally considered offline (e.g., Dynamic Out-of-Home screens [DOOH]) and online (e.g., social media), driven in part by the search for alternative targeting solutions that open up new territories for brands and agencies to tap into and enrich their media activations.
But how are brands and agencies preparing to take advantage of these opportunities? Let us unpack this by looking at three trends and how they are driving closer collaboration between the crafts.
Shopping meets entertainment
The rise of retail media is particularly notable on social platforms with the emergence of shops such as TikTok Shop, and programmatic advertising with the rise of aggregators like The Trade Desk.
With TikTok Shop, social commerce has become an effective way for brands to use partners like influencersi to fuse sales-led messages with entertainment to promote their products and drive conversions, even with arguably lower quality videos. The results speak for themselves with more than 11% of US households having purchased items via TikTok Shop.
However, there are concerns about consumer privacy on TikTok and social media more broadly. One question that needs to be answered is how can brands and agencies ensure that consumers' data is safe and used with respect. We recommend waiting for the regulators, especially the EU, to finalize their judgements, rather than acting independently as this may later be superseded by legislation.
Data is everywhere
With programmatic advertising there is a strong focus around the data aspect and how this creates alternatives to cookie-based segments and targeting. With more retailers integrating with aggregators, the ability to leverage retailer first-party data for brand activations is growing rapidly.ii In many cases retailers are using loyalty cards to enrich their first-party data and monetize it digitally. A great example is Nectar360, which has more than 18m active users in the UK, and is now fully integrated with The Trade Desk, allowing advertisers and agencies to tap into their data segments.
It is not only retailers that are moving into the retail space. With the involvement of companies like JPMorgan Chase with Chase Media Solutions, and United Airlines with Kinective Media, a new dynamic within the industry has been born. We will learn how these companies evolve their offerings in the years to come, but one thing is clear – these innovations are driving the convergence of media.
Brick and mortars embracing advertising via in-store screens
The final trend focuses on the increasing number of in-store DOOH screens.iii This is a type of media that has seen a lot of innovation in recent years, with an increasing number of screens becoming digitally connected. In-store activation is a new way to engage with consumers while they're shopping and it’s perfect for brands that want to boost their product launches, promotions or general visibility among shoppers.
The technologies facilitating these new paths to consumers are integrating with known players within the programmatic space, enabling algorithmic DOOH screen buying, while overlaying data coming from the retailer to increase the relevance of the screen selection.
Agencies have no time to breathe – action needed now!
These great innovations are expanding the opportunities for brands and agencies to engage with their consumers. The challenge they face is that the teams managing media channels such as social, programmatic and DOOH are typically siloed.
While technology is moving in a direction that demands close collaboration between the crafts, the question is whether brands and agencies are able to keep pace with innovation. It will require a fundamental change in how teams have operated for years. Fast adapters will be able to drive efficiencies for their clients when it comes to activating retail media but, and perhaps more importantly, also with the adoption of these trends.
There are clearly an exciting few years ahead, with many new contenders in the media space innovating new opportunities to create impact. With agencies actively acquiring and intensifying client company relationships, their influence will grow rapidly, and, for the sake of retail media as a whole, we can only hope that agencies remain unbiased when it comes to selecting partners and activating media trends for their clients.