Advertisers must navigate a sea of constantly growing and changing retail media partners, marketplaces, and ad types while responding to more volatile consumer buying behaviors. As consumer preference for online shopping continues to grow and more retailers roll out their own media offerings, brands must be nimble with their advertising strategy.
At the Firstmovr iQBR eCommerce Leadership Summit, Pacvue President Melissa Burdick participated in a roundtable with Christina Vail, Director of Client Strategy at Profitero, to answer common questions about retail media.
You need to make sure you’re comparing apples to apples, and you also need to bring your data together into one place for it to be truly actionable. At Pacvue, we have a Unified Retail Media dashboard that integrates across retailers, including Amazon, Walmart, Target, Instacart, and eBay. We’re able to unify all of that data, and standardize on the backend, such as setting sales attribution for the same window.
That’s why software exists, to help you uncover areas to optimize. The first thing to do is an audit to understand if your campaigns are structured according to best practices and if you’re meeting benchmarks. Then, focus on the goals you’re trying to achieve, overlaying your sales figures with digital Share of Voice and market share to see where you’re overinvested and where you’re underinvested. Another benchmark may be comparing in-store versus online market share. Finally, understand the gap between your existing strategy and the level of investment it would take to hit your goals. In the Pacvue platform, for example, we can tell you the ad price of slot one versus slot two, so you understand the costs it will take, and how far you still have to go.
Break it down by function. Do you have the right processes in place?
Ultimately the executive team needs to understand the value of the eCommerce team. There’s so much change in this industry that you can’t constantly be losing knowledge with personnel or organizational changes.
At the eCommerce Leadership Summit, Melissa also hosted a session with L’Oreal’s Head of Media, Shenan Reed, to discuss the changing media landscape and the need for greater budget fluidity. Here are some of the takeaways.
Budget fluidity is the ability to adjust and move a budget flexibility and quickly without requiring approval from layers of decision makers. Using just-in-time information, budgets can be adjusted across platforms, channels and retailers to respond to changes.
Achieving budget fluidity requires buy-in from all decision makers involved and an understanding of what the brand’s goals are. When leadership understands the benefits that can be seen and the reasons for forfeiting some control over budgets, the initiative has a better chance of success. In order to make a compelling case and be data-driven in the approach, it’s important to look at Unified Retail Media – that is, measure retail channels side-by-side, including attributed sales from search and display across marketplaces, in order to optimize for holistic impact.
Overall budgets should still be planned, but avoid locking into a specific marketplace, ad type, or monthly budget. eCommerce advertisers need to be able to adjust ad strategies and keyword bidding in real-time. In terms of monthly budgets, advertisers should have the freedom to defer budgets to later in the year when consumer behavior is slowing or pull budgets forward when there is an opportunity to take advantage of.
Adjusting budgets and ad strategies requires reliable metrics that provide both real-time and big-picture views of ad performance. Standard attribution is important to understand the full value of ads and adjust budgets accordingly.
When it comes to measuring the full value of an Amazon ad, direct sales doesn’t always tell the full picture. Many consumers now use Amazon to gather data before making in-store purchases. Ads can also be used to build brand recognition and win share of voice. Using Media Mix Modeling and other KPIs can help determine the long-term impacts of ad strategies across the entire ecosystem. However, these models do have the downside of a time lag.
The other critical piece in developing budget fluidity is making use of real-time metrics to track small changes in ad performance and make granular adjustments. Keyword bidding and CPC can often change dramatically throughout the day. Taking advantage of real-time metrics allows advertisers to make small adjustments to budgets, such as daypart bidding.
Making meaningful adjustments to ad strategies requires visibility into how ads are performing. Real-time analytics and multi-touch attribution help provide the insights necessary to make short-term and long-term budget decisions.
Not only does budget fluidity provide a way to respond to market fluctuations, it can also create a significant competitive advantage. Pacvue tracked an interesting case study in 2020 between two brands in the same industry that handled the COVID-19 consumer changes very differently. While CPG Brand 2 plans budgets annually, CPG Brand 1 readjusts ad budgets monthly.
Thanks to greater budget fluidity, CPG Brand 1 (which had a higher degree of budget fluidity) was able to reallocate budget from brick & mortar channels and drive a +269% increase in Paid Share of Voice on Amazon. This allowed them to overtake CPG Brand 2 and sustain their first-place SOV position.
By looking at the retail media channels in one, unified place, brands are also uncovering growth opportunities on newer platforms, like Instacart, and optimize their product mix, campaign spend, and targeting across retailers to work in concert together.
If you’re interested in creating more budget fluidity in 2021 and plan ahead for future changes, check out the 2021 Planning Guide.
Interested in learning more? Check out this eCommerce ad management guide.
Timely trends and need-to-knows delivered straight to your inbox.