Retail Media Is the Fast Lane for the Customer Purchase Path

We marketers have heard every single variation on the "funnel" metaphor imaginable. It’s collapsed, it’s dead, it’s come back to life as a flesh-eating zombie—and every possible scenario therein. Wherever you stand on the funnel issue, I think we can all agree it’s more slippery and has gotten faster. And arguably, retail media has the speediest funnel out there. The channel has a head start on competitors since consumers are all logged in and ready to buy as soon as they get there. But where it really gets interesting is that retail media sites like Amazon, Instacart, Walmart and Target are quickly adding features that allow brands to be built on their platforms. Hence, it’s truly becoming a place where brand and performance come together. The stated mission of Instacart Ads, for example, is to "connect brands with consumers to help them discover products they will love.” Instacart has said that a major goal this year is to transform their shopping experience from transactional to inspirational. This comes from one of the best lower-funnel performers, along with Amazon, consistently across categories, with their multiple qualifiers before a user even sees an ad. So, if the kings of conversion are wanting to move up into consideration and awareness, we should be taking notice. These digital-first platforms are also leading us into the online-to-offline experiences that are so critical to brands in our new hybrid shopping environments. The Top 5 Innovations in Retail Media Here Today (and Coming Tomorrow) To be clear, this is where we’re headed, not necessarily where we are today. We are reaching stages of maturity in retail media that are catching up with other digital-first advertisers like Google, Facebook and programmatic. So, instead of comparison shopping across all the retail media channels to examine which one has what type of offering—which is exhausting, I’ve done it—I created an organizing system that starts with the ad types available to us today and assigns them to their position within the funnel. It’s a useful tool to help you build your media mix plans. Each retailer has some sort of offering that lands in each bucket, but then aligning that to the business outcomes that your brand is aiming for is probably the best way to think about and apply the funnel to retail media today. From there, I took the four most common business goals that brands have when doing retail media advertising and then aligned top-level ad types to each of those and mapped out where those ad types sit in the funnel for driving performance, as the chart below shows. If your goal with retail media is ROAS and it’s as straightforward as that, your ad types are search-based sponsored or featured products, that’s it. And if you want to insist that it’s also growth or new customers, I’m going to remind you that your primary goal can’t be ROAS then. Or you have to lower that ROAS expectation or delineate specific ROAS markers for each of the business goals you have with the retailer. If your goal is growth—hooray! You’re actually starting to move up the funnel. Here in the consideration phase, you can add some of the self-service or search-based banner type advertising that’s available, for example, on Instacart, Walmart and Kroger. That said, it’s best to design a pilot before doing a full-scale launch on any of these to assess performance. I recommend looking at it from a few vantage points. One of those angles should be investigating what you’re proposing in connection with sponsored products, which is a superior way to truly understand the full impact of your growth strategy. The banners as a standalone, search or otherwise triggered, rarely tell the best story in a silo. The other thing to consider is what you’re using to measure success against. Is it a single SKU? A category? A brand? A set of SKUs? Keep in mind, the narrower the view you take—like a single or only a few SKUs—the poorer the performance may seem, as you will be excluding influenced SKUs like halo sales. Remember how often it is that you yourself actually buy the exact SKU and variation you clicked on. Often in banner ads, only a few SKUs can be shown, but there may be several more available. Using a set of SKUs will give the most accurate view of that narrow picture. I recommend a category-level view to start with when moving up the funnel. Turn Performance Marketing Into Performance Branding If your goal is discoverability, now we’re cooking. This is where sponsored products are still lurking around in the background, always on of course. But now we’re bringing awareness-based tactics like brand pages—which some platforms offer for free—coupons or promotions in addition to audience-based targeting for banners. This is also the point at which I highly recommend not only a pilot and ramp-up but a deliberative approach to the audiences you’re testing and over what period of time—while avoiding the temptation to add too many variables or audiences to the mix. Start with those in market or category audiences, and stress test the retailer’s ability to actually identify and serve impressions before going all the way to the top of the funnel. As I have said before, some retailers might promise you the world but only truly have the capacity to deliver you a continent or two. If your goal is new customers, I recommend first taking a beat and identifying what your position and standing is at the retailer overall. Are you an established brand with a decent assortment size on-shelf—in-store and online? Or is it your first attempt ever trying to get shelf space? If you are more established, you get to build off of previous purchasers that have lapsed and bid on head search terms where you have some brand name recognition alongside those terms or competitors with your creative and audiences selected—whereas a new-to-market or retailer brand should consider more offsite tactics, like social media, as part of their plan in addition to bigger investments like homepage or category takeovers for a day. Those takeovers aren’t cheap. But depending on how fast you need those new customers, they might be the way to go. There are always going to be caveats and what-ifs with this kind of modeling, as well as 100 questions to help clarify and qualify what makes sense within those keyword, audience and behavior selections. But your brand’s got to start somewhere, right? And what’s more familiar than a good old fashioned funnel? Retailers and Media Are ‘a Match Made in Heaven’