Hint: They look a lot like 2022
We’re going to get more metrics, for sure, like attempts at attribution for online to in-store.Guoya/Getty Images
I have a rule: If you make the predictions before the end of January, they still can come true for that year.
My overall prediction is that 2023 will look a lot like 2022. We made a lot of progress on the retail media front. But because things moved fast, I would argue we now need to catch our collective breath and assess which of those advancements have been effective and which haven’t.
Here’s what I said last year in its entirety; I’ll do a quick recap at the end on how accurate they were to keep myself honest.
RETAILERS’ SECRET WEAPONS TO SURVIVE A POTENTIAL 2023 RECESSION? DIGITAL TOOLS AND DATA
On-site search is still king
We will see a lot more offerings and adoption of self-service platforms like Walmart and Instacart that offer pre-set audience targeting that can be applied using first-party data to run onsite display campaigns. But at the end of the day, search reigns supreme. Sure, the ability to prove out incrementality and actual new-to-brand customers will progress with self-service. But when it comes to determining the concrete value of media investment, we’ll still remain firmly in the realm of sponsored products. This will keep marketers at the bottom of the funnel, unfortunately.
We need to change our mindset from “efficiency” and “ROAS” based on ecommerce results (ignoring the lion’s share of in-store) and go beyond harvesting existing demand and move up the funnel. So for 2023, I search, you search, we all keep on searching.
Even more programmatic options
Google’s decision to push back its plan to abolish third-party cookies from Chrome bought marketers some time. But with partnerships forming fast and furious across networks (Amazon Thursday Night Football or YouTube Sunday Ticket package, anyone?), brands will need to make decisions on not only which retailer and what partners but also how to dedupe efforts across their organizations.
Personally, I’m a fan of the expansion into self-service programmatic like what Roundel, Kroger and Walgreens are offering. I would compare those retailers’ self-service options against retailers that only offer packages managed by the retailer of their first-party audiences. Any time you can enable a savvy marketer, the better. They may opt for fewer, unique-to-retailer audiences (and their premium CPM rates) and supplement that data with third-party audiences at cheaper CPMs. This approach will expand reach to help answer the question of whether that shopper was new to the brand or incremental at that particular retailer.
Assets! I need assets!
I need static banners and short, simple videos. And I need them at scale, ideally showing off the product in use, size or any kind of features. Retail media networks are building out their abilities to not only display and target these types of ads (onsite and offsite) but are also experimenting with placements onsite in search engine results pages (SERPs), category pages and even brand pages. And in some cases, they are getting pretty creative: Check out Lord & Taylor’s new video in SERP layout with InMobi, Instacart brand pages and shoppable video, and Amazon’s in-platform video templates as examples.
Affiliate + influencers with retail media are the new power couple
The “hot” term is influencers—but really, it’s affiliate, updated and merged, and that’s just fine with me. Receiving “credit” for the influence of a sale—albeit a coupon code, a product demo or a rave—influencer marketing is growing in its importance and appearing where eyeballs are. Affiliate marketing is mature and well-tested. And as economic headwinds hit, shoppers will look to the kinds of deals and promos within affiliate programs like Ibotta, Rakuten and retailer apps.
Retailers like Walmart, Best Buy and Kohl’s have long-established relationships here. Armed with first-party retailer data, retail media can not only extend reach but track it, too. Add in newer influencer programs—Walmart Creator, Like To Know It with Target and Macy’s Style Crew—and the assets they create, and now you’ve also got content. This revamp and expansion creates a trackable, engaging and relationship-building ecosystem where influencers and retailers can meet.
2022 predictions—grading my own homework
OK, now that I’ve made my calls for 2023, let’s take a quick trip back in time to 2022 and see how right I was (or wasn’t).
Retail media offerings will continue to expand. Duh. Did it come true? Oh yeah.
However, my prediction was that growth will both expand and contract. Not all retailers’ offerings will be able to scale, grow or even survive at the current or predicted rate. There are lots of media dollars out there, but it’s been an organizational hodgepodge and consistently inconsistent in distribution. I would say that the contraction or consolidation hasn’t really happened yet, either.
The loop will get tighter but still won’t close. Was I right? Yup.
But … 2023 shows a lot more promise, and the days of retailers policing themselves are at least going to get a guiding hand from the IAB’s working group going into 2024.
Attribution will still be a fruit basket case. Survey says: Unfortunately, yes.
We’re going to get more metrics, for sure, like attempts at attribution for online to in-store. More advanced digital-first brands will have a distinct advantage by rolling that into what they’re already doing. It’ll be the legacy, heavy brick-and-mortar brands that will struggle to incorporate these new metrics and educate their internal organizations with any kind of speed.
The current brand and buyer relationship dynamic will evolve. Hit or miss? Miss.
For years, brands and retailers have had mutually beneficial, predictable relationships that follow a classic model of planning, review, negotiating, forecasting, rinse and repeat. Layering in digital retail media spend adds a consideration lever that is not currently being accounted for in a consistent or, to be blunt, fair way. If a brand commits to a retailer’s media arm for investment to drive sales at the retailer, but the buyer is “notified” but otherwise takes no interest or responsibility in the outcomes, this model is doomed.
Make way for self-serve programmatic. Not only was I right, but I am doubling down on this one for 2023!
Running the last mile. Last mile definitely hasn’t gone away, but we have not seen the growth in retail media platforms outside of Instacart that looked like a sure thing in early 2022. DoorDash and GoPuff have not only struggled but slid backward, and while Instacart is steady, the pace has slowed. This was probably my biggest miss in terms of multiplication—but it’s still important.
Last mile is going to multiply. Brands need to stop looking at it as redundancy and instead recognize it as meeting customers where they are. Don’t underestimate their place in media plans and the opportunities they might bring to your brand.
So, how’d I do in ‘22? Pretty solid, actually. How will I do in ’23? I’ll meet you back here in a year to let you know.