Food retailers have regained ground against big tech and major retailers in the battle for consumer goods companies’ shifting ad budgets.
The ability to target, personalize and measure promotional spending against massive audiences gave companies such as Amazon, Google and then major retailers such as Walmart, Target and Kroger a tremendous advantage when vying for ad budgets. Small and mid-size retailers lacked adequate digital traffic to be of interest to advertisers and even if they have the volume they didn’t have the technology to monetize their audiences.
That is no longer the case as capabilities in the world of digital advertising advance rapidly and become more universally available even as major companies intensify their efforts. CPG companies are re-rethinking where they spend money as the universe of retailers functioning as media platforms expand, offering CPGs unprecedented targeting, optimization and precise measurement to know budgets are producing results.
“There are a lot of companies that talk about retail as media, but very few that actually do it,” said Brad Moran, CEO of CitrusAd, an Australian company that launched in December 2017 with two main goals; provide an easy to install, self-serve ad platform enabling retailers to compete with advertising giants and allow retailers to finally use their first party data to enhance both CPG and customer experience with personlized ad content.
In furtherance of both goals, CitrusAd recently partnered with Mi9, the enterprise software provider, which acquired MyWebGrocer last fall, to gain entry into the grocery vertical and bolster its position with CPG companies. MyWebGrocer was best known as a provider e-commerce, order management and click and collect solutions.
“The partnership with Mi9 enables Citrus to provide cutting edge solutions for both large, national retailers as well as launch a platform to aggregate regional retailers to capture national media budgets,” Moran said. “Existing ad networks have either lacked the self service capability, personalization or the reporting transparency of the ad spend at a retailer level. Brands, and in particular media agency trading desks, want self-serve capability with real time, transparent reporting, which has been one of the main reasons for Amazon’s ad success to date.”
The same could be said for Google and more recently Walmart and Target, both of whom have become more aggressive about touting their sizable online traffic and targeting capabilities to advertisers. Further validation of retail ad spend shifting towards sponsored search was Microsoft’s recent acquisition of New York based company PromoteIQ. Moran said he saw the wave coming two years ago when he started CitrusAd with an emphasis on execution.
“We are in an era where retailers know this is an area they need to focus us. However, just like we saw with the rush to get into e-commerce, retailers need to select the technology that will allow them to scale, rather than the first company that crosses their desk. Getting it wrong could set them back further than where they started,” Moran said.
Setbacks are problematic considering rapid advancements by major companies designed to make it easier for CPG companies to drive sales on their respective platforms. Most notably, Walmart has been building its Walmart Media Group for several years, offering full service programs powered by online and in-store shopper data. The company recently acquired Silicon Valley ad tech start up Polymorph Labs whose technologies will enable the management of real-time auctions across multiple ad-pricing models such as cost per click, impression and conversion. According to Walmart, the acquisition will enable both existing and new advertisers to control their advertising tactics and spend in real-time and reach their desired audiences more effectively.
Not to be outdone, Target and Kroger have elevated their capabilities. Target launched its in-house media company in 2016 and in May of this year rebranded the group as Roundel. To make a splash, Target unveiled the name change at an annual event called NewFronts organized by the Interactive Advertising Bureau.
And then there’s Kroger Precision Marketing, a group launched in the fall of 2017. Known as KPM, the platform is similar to Walmart and Target in the sense that it blends agency capabilities with a proprietary audience, but leverages Kroger’s proprietary data science and insights group 84.51.
All of these moves come as conventional retailers are gaining ground in e-commerce and realizing they can rival Amazon’s targeting capabilities by leveraging technology to capitalize on their audiences. It helps explain how a company like CitrusAd can seemingly come out of nowhere with capabilities that rival major retailers and then bolster its impact with innovative partnerships such as the Mi9 deal.
“The Mi9 and CitrusAd partnership brings together a roster of more than 500 retailers across 30,000 stores, putting the platform on par with major tier 1 players to compete for billions in national media dollars due to the collective scale,” said Neil Moses, Mi9 CEO. “We are excited to bring a highly differentiated digital media monetization option to retailers, providing both CitrusAd’s best of breed ad tech and immediate access to media revenue via the marketplace solution.”
Plans call for Mi9 to migrate existing retailers and add future retailers to CitrusAd’s platform where they will join companies such as U.K. online retailer Ocado, recent U.S. addition Hy-Vee, H-E-B in Latin America and Australian majors Coles and Woolworths Group.
By Mike Troy - 08/19/2019