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How to create quality media estates to generate sustainable profit

Retailers becoming media owners has become increasingly prevalent over the last ten years. For those who have ventured into the space, becoming a media owner is certainly more than a mere trend – it has provided an opportunity for these retailers to generate an alternative source of revenue that can turbo-charge their profit. And in a world where retailer margins are increasingly squeezed, it’s a commercial benefit that’s impossible to ignore.

Many retail media owners lie within the Grocery category, due to their large physical and digital media estates and vast array of supplier branded products. Through our research, we’ve estimated that the U.K. Grocery sector alone is currently* generating upwards of £300m annually in media revenue.

But what learnings can other retailers take from Grocery media owners? How did they get there? And, how can Grocery media owners improve their estates to offer real quality to their supplier brands?

1. Build a portfolio of quality channels

For retailers to successfully generate incremental media revenue, it’s vital to start by assessing the range of media touchpoints that are available to supplier brands. Start with the customer – how do they shop? It’s critical to understand the right moments to reach them and to determine the channels they are most likely to engage with. If you can get this part right, you’ll have found the sweet spot between an appealing media portfolio for branded advertising, and vehicles that the customer will find useful.

For those without established media toolkits, it’s important to determine the existing channels you have that you’re happy to ‘open up’ to supplier brands. The more meaningful opportunities for communication with shoppers, the more opportunities for brands to invest. It may also be that you need to develop new channels and ways of communicating with customers over time – if done right, this doesn’t mean flooding stores or websites with extra ‘stuff’, it means creating well-designed channels that improve the shopping experience.

2. Be transparent without fail

Trust is vital to creating a sustainable media business. The easiest place to start is in your media pricing.

When building a rate card, be absolutely clear on the market and where you sit within it. When you’ve created it, be transparent with it – publish it and make it equal for all supplier brands. Whilst discounting can be a short-term solution for retailers to deliver against high profitability targets, it is not going to lead to sustainable growth. Consider alternative ways to incentivise spend growth and reward brands who invest significantly.

Constantly monitor campaign performance and use this as a tool through which to re-evaluate your pricing over time. If a channel isn’t delivering a return on investment at the price you’ve set it, don’t be afraid to review the price. By contrast, if a channel is delivering outstanding results for suppliers and there’s great demand for it, there could be an opportunity to increase rates over time.

3. Put data at the core

Brands need to make a clear business case for every marketing pound they spend. The more accessible performance data is made to suppliers, the more the investment will come. Provide clear campaign reporting and make it central to the offering.

It’s important to be constantly learning. With the retail landscape constantly changing, keep an ear to the ground and create a cycle of ongoing media channel development. For retailers, the ability to constantly learn, track media performance, shopper behaviours, new technologies and repeatedly test and learn, is the best way to develop a quality media estate – and one that works.

Developing a quality media estate isn’t just about selling media. It’s about understanding your customers and your suppliers to build a media offering that can deliver results and genuinely compete in the market. For retailers who are able to develop a quality suite of channels, that acknowledge the importance of transparency and who use data to fuel progress, there’s a massive opportunity right ahead of them.


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