Publicis Media's Spark Foundry Rocks the Retail Self-Checkout with Programmatic Offering

By Publicis Media InSites Archives
Cover image for  article: Publicis Media's Spark Foundry Rocks the Retail Self-Checkout with Programmatic Offering

The growth of retail media is one sure trend in 2022. The marriage of first-party data, contextual relevance and signals that provide a strong picture of how and when consumers purchase their everyday needs epitomizes all of the benefits of the digital era, while minimizing many of the concerns and risks. Last year, Publicis Media's Spark Foundry agency became one of the first to test a new programmatic offering from Kroger's Precision Marketing group. Kroger, the second largest grocer in the U.S. with revenue of over $121 billion and over 2,750 stores, is an innovator and one of the fastest to embrace and operationalize their media solutions services.

The pandemic has forever changed the grocery purchase experience. In fact, it's a safe bet that of all the industries whose digital transformation was accelerated, no other industry has been forced to completely restructure its entire operations from front end to back end as quickly and completely to accommodate today's ever-changing economic dynamism.

At first thought, it may seem that grocery retail has been a beneficiary from the reduction in dining out and increased amount of in-home cooking that has accompanied the past two years. However, dig into it and you find that the supply-chain challenge, along with higher wages for employees and overall inflation, has put tremendous pressure on margins and the bottom line.

While grocery stores have embraced the use of data for over a decade through loyalty cards, the consumer's embrace of online grocery shopping, either for delivery or curbside pickup, has opened an entirely new revenue stream at a time when it is much needed. Advertising on grocery-owned properties such as their websites or mobile apps -- along with the transition from paper couponing to digital coupons accessed via those apertures -- has proven to be a lucrative new revenue stream. And then there's that first-party shopping data.

According to August 2021 data from eMarketer, in 2020 there was a 63.9% jump in online ordering of groceries. By 2025, eMarketer projects that grocery ecommerce will hit $243 billion in annual sales, accounting for 16.8% of all grocery revenue.

For grocery retailers, that means that they get significantly more information about the consumer. Not only do they get a full look at the consumer purchases, but they can also now have access to how consumers actually go about shopping. In the digital space, they also gain insight into what consumers look at but don't purchase, which digital coupons they save, the time of day or day of week an individual shopper likes to shop and which brands earn their loyalty.

All these signals, which are very much first-party data and therefore valid to use in a privacy-first world, are data points of the highest quality. And as such, they are incredibly valuable to marketers.

Cara Pratt leads Kroger Precision Marketing within 84.51, the retail data-science company that is powering Kroger's entry into the advertising content and data seller business. Pratt believes that the data is imperative for creating optimization levers in the connection of consumers with brands.

To accomplish that, Kroger announced in late 2021 that it would make its data available in a private marketplace to be used by marketers for creating audiences and targeting in programmatic.

"Previously, we had our owned and operated assets [the Kroger website, the app, e-mails, search and display units] and we had publisher networks that were part of a managed service approach," Pratt says. "Now, our science will pre-optimize based on business outcomes, conversions or awareness. And the best part is that you can use any DSP [demand side platform] that you'd like to apply the data to your marketplace."

Spark Foundry was one of the first media agencies out of the gate to embrace this new opportunity -- on behalf of their food and beverage client. While the project is still in beta, "it's showing real promise," according to Amanda Mollet, Senior Vice President, Director at Spark Foundry, who oversees partnerships and investment. "I've recognized, through my own experience, the exponential amount of time that I personally spend on Kroger's digital products, such as the website or app," she says.

As an industry, there has been a rebalancing of programmatic strategy to incorporate a greater measure of attention back to the traditional importance of contextual relevance, which also includes moment-in-time relevancy. The ability for a CPG marketer to not only reach a consumer when they are in the shopping mindset but also access a layer of data to differentiate between someone new to the category, a brand loyalist, or someone loyal to a competitor opens a myriad of communication options and upsell opportunity.

While Mollet's team always looks at opportunities through a "commerce-first lens," the key performance indicator is not simply a direct response, immediate conversion. There are upper funnel applications as well. "What's interesting about our engagement in this new programmatic offering is that the budget actually came from a brand budget, not a DR or shopper marketing approach," Mollett explains. "We are seeing a lot of our CPG clients rethink the role of their shopper budgets."

Mollet has been very pleased with the product to date, the support from the Kroger team, and especially the ability to use the data across various DSPs.

As marketers, and agencies like Spark Foundry, continue to recognize the benefit of context and the worry-free use of data -- all while consumers increasingly turn to screens to either assist or completely transact their real-world purchases -- grocer retail media options and data will continue to proliferate. The media world, which paid relatively little notice to the channel in the past, is certainly paying attention now.

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