Along with connected TV, retail media is one of the hottest channels in advertising. According to eMarketer, U.S. digital retail media ad spending was forecast to grow 31.4% to $40.81 billion in 2022. And by 2024, the total will reach $61.15 billion, making up nearly 20% of digital ad spending. What started with retailers like Walmart, Amazon, Walgreens, and Target serving targeted display ads on their websites and mobile apps has mushroomed into its own media juggernaut. The attraction for advertisers is the first party data retailers collect on their customers’ browsing, searching, and buying behavior. Targeting consumers based on their shopping-related characteristics has opened up a new frontier for advertisers whose products are sold by the retailer.
“Retailers, inspired by Amazon, realize they have a lot of data that’s even more strongly correlated with purchase intent,” says Nicole Perrin, VP of Business Intelligence at Advertiser Perceptions, which surveys advertisers and agencies. “There's all of this retailer data that helps advertisers target these ads.” In addition, Advertiser Perceptions research consistently shows brands want to be present as advertisers in the same places that their products are available for purchase, Perrin says.
Where Audio Fits In
Large scale audio players can get in on the retail media action by integrating their own first party data, in a privacy-protected way, with that of the retailer to help advertisers find their audiences. Perrin sees an opportunity for radio by following the cue of media companies in other channels. Roku, for example, partnered with grocery store giant Kroger to share first party data so advertisers can target the appropriate audience on its streaming video platform. Integrating with Kroger’s data enables Roku to show the advertiser insights about what happened after the ads ran.
“Radio or digital audio companies would have the same potential there to find retailers to partner with in some type of a data co-op situation,” Perrin says. “Data clean rooms are a technological venue where this sort of thing could happen.”
So-called data clean rooms allow multiple parties to share data insights without actually sharing the data itself. Users can query multiple datasets about individuals without joining those datasets together.
In this scenario, an audio company with first party data on its listeners could partner with a retailer and its first party consumer data to help advertisers find the right audience and understand the effects of the ads.
“I think all types of publishers are going to end up seeking to form partnerships with retailers using data clean rooms, or similar technology to both provide the right audience targeting options, and also provide the right measurement and attribution insights after the fact,” Perrin days.
Adding Scale
There’s another way radio can get involved. Unlike Amazon, Walmart and other retail giants, smaller retail media networks lack scale. To make up for that, they sometimes partner with other media channels. “If you're doing a streaming audio or podcast program using data around these segments, you're still missing a lot of people,” says Cumulus Media Chief Insights Officer Pierre Bouvard. “That's where radio can come in to expand the reach for these consumer retailers.” According to Edison Research’s Share Of Ear, 74% of all American ad-supported audio goes to AM/FM radio.
An example of an audio-retail media partnership comes from Vibenomics, which provides customized background music and on-location advertising for retail locations. The Indianapolis-based company has partnered its in-store audio network with Kroger, High-Vee grocery stores and other retailers. “The retail media networks are looking at the foot traffic within the walls of their brick and mortar stores and they're now absorbing in-store into the retail media offering,” says Paul Brenner, President of Audio OOH and Chief Strategy Officer at Vibenomics. In addition to providing music and messaging to Kroger (its biggest customer), Vibenomics integrates with their retail media team.
Reaching 210 million consumers, each exposed five to ten times a month, Brenner says Vibenomics has become another offering within the retail media plan for some buyers. The company segments its audience much like radio does. It also buys smartphone data from various parties to match it up with the retailer's data.
“We call ourselves a one-to-many media with a one-to-one measurement,” says Brenner, a former Emmis Communications and Next Radio exec. “We have an hourly impression that is calculated by what kind of person is most likely to be in that location within that time period.”
With sizable audiences and reams of data, retail media networks are gaining clout with advertisers, especially those whose products they sell. “I think what will ultimately happen is it will be another form of media with a comparable menu of ways a brand could approach first party data and create a media plan that spans all of those different forms,” Brenner says.
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