As e-commerce and retail media have separately made their mark on the media investing business during the last decade especially during the last 2 yrs one consultancy believes its time and energy to consider the two as you big industry: commerce media that encompasses all of the advertisers, retail media firms, media companies and shoulder industries that serve them.
And the thinking behind the rolling up of most that has regarding the energy of connecting media investment to sales data in whatever form it requires, explained Quentin George, partner and Jon Flugstad, associate partner at McKinsey, two leaders of the firms commerce media practice. McKinsey estimates everything results in some $1.3 trillion in enterprise value.
- Divided which includes:
$820 billion for retailers who develop new, margin-rich media businesses
- $280 billion for advertisers by means of higher returns on ad spending (ROAS)
- $50 billion for publishers from new means of capturing additional ad dollars
- $5 billion for ad agencies that deliver high-efficiency performance marketing for clients or help firms create media planning and purchasing capabilities
- $160 billion for ad-tech providers who offer martech answers to firms which have no experience as media companies.
Going back 100 years, weve optimized media on impression delivery did I reach the audience that I said I would reach? said George. The change here’s, I could now connect the feeling with a SKU level sale not with a [checkout] basket, not with credit cards, but with a primary sale. Which is incredibly transformative for the.
Whats more impressive to the McKinsey executives is that the growth the planet of commerce media is experiencing is basically incremental CPG advertisers cant seemingly get enough of it.
Our surveys [show] that around 70% of advertisers indicate that [when they buy ad time or space] on retail media, its somewhat or significantly better performance than what they are able to get elsewhere, said Flugstad. Theres no certain threshold or number that theyll spend if youre driving performance they’ll keep shifting toward you. And then the pie that retail media can eat from may be the broader digital pie.
Clearly that power represents both incredible opportunity and a potential challenge to the agency world, as retailers and e-commerce firms take their story right to brands. It can help to describe why some agency holding companies took steps to either partner with the larger players of retail media, or have committed to their very own shoulder and support businesses.
When you’re able to measure things toward direct selling, more dollars go there, said Megan Pagliuca, chief activation officer for Omnicom Media Group, which announced four separate e-commerce-related partnerships through the Cannes Lions festival. She recalled that Facebook became and ad juggernaut only once it changed its focus from brand advertising to a far more DTC approach that drove eyeballs right to advertisers pages. When its directly attributable you cant argue with that.
Industry analyst firm Forrester is focusing on its research in to the broader conjoining of performance, commerce and retail in the marketing ecosystem, and is discovering that marketer are considering it all as you aswell. The distinction at your client level between retail media performance media, or commerce media, isn’t an obvious distinction, said Jay Pattisall, vp and senior agency analyst.
Another unifying factor to Pattisall is that practically all the investing activity over the landscape is data driven. Performance media is driven by third-party data, commerce is driven by first-party platform data and retail media is driven by first-party retailer data. However the signals are similar in the sense they seek to comprehend, whos buying, what theyre giving an answer to, and what this means for sales or conversion.
Will this process to media investment result in an environment of haves and have-nots, the latter being media that dont deliver similar degrees of sales results or business outcomes? Will there be likely to be an expectation that media should become better measurable? I am hoping so, thats an excellent evolution, said Pagliuca.
Pattisall thinks the result will undoubtedly be limited from the media perspective, because media can only just be optimized so much. The creative side of marketing is where better optimization can occur. Creative optimization originates from those same data signals of whos giving an answer to what andthose atomic components of whats being presented in their mind, he said. Theres a significant level of work underway all over the industry to comprehend this What combinations of information and content are most reliable, instead of just where its placed?