Five years ago, retail media networks were run primarily by Amazon and major chain retailers like Walmart, Target and Kroger. Today, many other retailers offer brands the opportunity to advertise within the retailer’s owned and operated digital channels. In the past 18 months, new retail media networks have been launched by national grocery chains (Albertsons), drug chains (Walgreens, CVS), department stores (Macy’s, Nordstrom) and many more retailers.
For this once-niche retail media category, which is increasingly referred to as “commerce media” and includes non-retail brands such as Marriott and DoorDash, Forrester predicts the channel will top $50 billion in worldwide revenue this year. By 2023, eMarketer predicts that retail media will account for nearly 20% of all digital ad spending.
But with increased opportunity comes an urgency to manage product content and the delivery of ads, powered by purchase data across these disparate networks, in a consistent and meaningful way. Diaz Nesamoney, founder, president and CEO of Jivox, spoke with Ad Age Studio 30 about how brands can use best-in-breed tools to deliver personalized commerce marketing across today’s rapidly expanding retail media networks.
Ad Age Studio 30: Can you describe what you mean by personalized commerce marketing? How is personalization in a retail media environment unique from digital advertising more broadly?
Diaz Nesamoney: Personalized commerce marketing takes the concept of personalization deeper into the realm of shopping. Take the example of a global athletic apparel brand that offers tens of thousands of product choices. You want to be intelligent enough to show consumers precisely what they’re likely to pick. Since the choices can be bewildering, if you can’t get that precision with your messaging and your content, you’re likely to lose that moment when a consumer is looking to buy.
Ad Age Studio 30: How would you sum up the marketing opportunity that commerce media represents?
Nesamoney: It’s a significant opportunity for marketers because there is a lot more knowledge today about the consumer’s propensity to purchase. It’s one thing for the marketer to have an idea of who you are on Facebook, but it’s another thing to know what you buy every week, how much you buy and who you buy from. That’s incredibly powerful as a concept. I’d say the opportunity is as big as social media, maybe bigger.
Ad Age Studio 30: Why do you think consumers are more likely to share personal information or be more receptive to targeted advertising in a digital shopping environment?
Nesamoney: There are a number of surveys that show consumers wanting their shopping experiences to be personalized. And I think a lot of it has to do with the rewards and special offers of loyalty programs. Many brands have gotten pretty good at offering them. Commerce media is actually a much richer environment for data, including for the purpose of advertising, than even social media is.
Ad Age Studio 30: Tell us more about your vision for the commerce marketing cloud and the role of Jivox in that ecosystem.
Nesamoney: We’ve built a set of tools that allows marketers to simultaneously leverage all of these emerging media and e-commerce platforms. The commerce marketing cloud ultimately could end up being the best in breed of tools that are assembled together, or it can be a single suite of specialized tools offered by a company like ours. Our vision of the commerce marketing cloud is that of a single tech stack that manages personalized ad delivery, attribution, analytics and insights across all commerce media and e-commerce platforms.
Ad Age Studio 30: Can you give us a specific example of how the commerce marketing cloud has evolved beyond what brands might have deployed, say, five or 10 years ago?
Nesamoney: For example, the concept of a dynamic product ad with a carousel is not new, but there’s more granularity now and the precision has increased. Say I go onto Amazon’s site and look at a particular brand of sneaker. Now, the carousel has the opportunity to show me several products. Well, you can show me the product I looked at, but what do you show in the rest of the carousel? This is where intelligence and decisioning comes in—for example, showing the customer best-sellers, or the types of sneakers that people like me tend to purchase based on my gender or other attributes. So, there’s a lot of intelligence that goes into filling out the carousel with products that are likely to be relevant and appealing to you.
Ad Age Studio 30: Do brands have to create entirely new dynamic ads for all of the different retail media networks, or does the inventory just need to be updated and customized? What are the solutions?
Nesamoney: That’s exactly the power of the commerce marketing cloud. It is cost-prohibitive and very challenging for a brand to figure out how to run all of these dynamic product ads against so many retailer ad platforms. The available data and attribution are different. The ad formats might be different and might be native to the retail media platforms.
In contrast, the commerce marketing cloud is a tech stack that mediates all of those differences. So whether you’re running dynamic product ads on Facebook or on Walmart or CVS, that’s the value of investing in a commerce marketing cloud. Essentially, it helps to make them all appear to be a single media platform.
Ad Age Studio 30: Brands are spending enormous sums of money to acquire data and martech tools. How can they make sure they’re getting a sufficient return on investment?
Nesamoney: First, brands should think about the efficiencies of a full suite of products, versus buying bits and pieces from everyone and having to assemble them and train people on how to operate all the different platforms. Secondly, I think the way the efficiency of the stack is measured has to change, so it really should not be counted as a cost against your media spend, but rather in terms of the value being delivered.
Ad Age Studio 30: What does that mean in practical terms?
Nesamoney: Brands always think about how much of their media spend goes to ad tech. The better question is, what is that ad tech doing for your media spend? For most brands, if you could lift their ROI on media spend by even 5% with the technology needed to do that, then the cost is absolutely justifiable.
Ad Age Studio 30: Any final thoughts?
Nesamoney: Yes, personalized commerce marketing is transforming digital commerce by accelerating conversions and sales through increased relevance of products and offers for each shopper, in real time. It is not unusual for some retailers to have tens of thousands or even millions of products in their catalog. In addition, while shoppers are in-market, real-time feedback is critical to optimize the relevance of products and offers to the right consumer. Delivering commerce marketing successfully requires a platform that is purpose-built to handle sophisticated needs of content and optimization.
Editor’s note: This Q&A is an excerpt of a more in-depth interview we had with Diaz Nesamoney. If you are interested in learning more about commerce media, commerce marketing and what opportunities may exist for you, here’s a link to the full interview.