Impact of Retail Media on the CPG marketing mix

Retail media networks are having a historic year, with increase in planned advertising expenditure of $10 million year-over-year from 2020 to present in the United States alone. Even with the delay in moving away from cookies, CPG brands are flocking to these partners for access to end-to-end solutions, including robust customer data sets, category and competitive insights, and award attribution. sales. It’s very appealing, especially for CPG marketers who don’t have large customer databases.

While it may be tempting to redirect budget to these networks, it’s important to keep the customer journey at the heart of your initiatives and understand some of the limitations of these “mini walled gardens”. This will help ensure that you are building a media mix focused on business goals for your brand growth stage rather than placing all your eggs in one basket.

Here’s how to use retail media in the CPG marketing mix at every stage of growing your brand:

Step 1: Getting started – Low brand awareness, low budget

If you are a DTC brand, select a physical retailer whose customers most closely resemble your target consumers. This allows quick access to addressable audiences, giving your brand momentum. If you have a physical presence, start with your strongest retail partner in terms of profit margin and distribution. This will help ensure that you are spending your money with customers who have already started noticing your products. It will also help identify like-minded consumers and keep existing customers engaged with your brand. Use the remaining dollars to invest in targeted outreach tactics such as online video, outdoor, and social media.

Stage 2: Challenger – Medium brand awareness, low budget

Now that your brand is gaining traction and notoriety, maintain that disjointed mentality while expanding your footprint. Continue to invest in the big retailer that helped boost sales, but tap into a few other niche retailers as well. When given the right value proposition, these audiences are likely to become brand enthusiasts. This will encourage word of mouth marketing and create a loyalty base to help you get started on the next stage of brand growth.

Stage 3: Competitive set: high brand awareness, average budget

Now that you’re armed with plenty of historical data, track the sales. You now have the money to invest more broadly in relevant retailers. Adopt a test and learn approach to determine where the true potential lies (i.e., what is the ROI per retail channel?). That said, ROI means you get effective results. But that doesn’t mean there’s always the scale needed to propel your brand forward. Be aware of how to balance efficiency and scale to take your product sales to the next level.

Step 4: Household name: high brand awareness, high budget

At household name status, you need to make your brand feel like it’s everywhere – in terms of visibility and accessibility. Be present on all relevant retail channels, but optimize budget allocation and tactics based on where you see the most efficiency. Now you can start playing on more expensive reach channels like National TV, Macro Influencers, and Experiential Channels – maybe even a play in the metaverse.

Retail media networks offer CPG brands a lot of value. But it’s important to find the optimal marketing mix with channels that fit budgets and meet your full funnel goals.

–Elise Stieferman, Director of Marketing and Business Strategy at coegi