The Convergence of Retailers and Publishers


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dunnhumby's Allen Mason's presentation at the 2012 Cincinnati Digital Non-Conference

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  • The historical role of retailers as the brand sales channel is changing. Retailers are evolving to play an expanded role for brand marketers, taking on the role previously owned by publishers and media outlets. I’ll share some trends in digital media, brand marketing and customer retailer strategy that signal a changing landscape for brand marketers and retailers to consider as they think about their relationship.
  • Overall media is becoming increasingly fragmented as more touchpoints become available everyday for brands to reach the consumer. Connecting with the consumer across this vast media landscape is challenging enough, but digital alone comes with a huge array of options including search, social, mobile, etc. Brands need to balance reach and relevance to make sure their messages connect with their targets as they evaluate the multitude of options.If fragmentation was challenging enough, digital media CPMs are on the rise. What has enabled brands to drive greater marketing efficiency based on performance vs. cost is beginning to become more expensive. The rise according to Forrester is a supply and demand issue: marketers are competing for similar audience segments and bid density is continuing to increase. Digital ad growth is driven by higher engagement and content rich formats like video and rich media with Static ad rates declining 45%. These high engagement formats are certain to attract even more competition from advertisers for consumer attention. This trend should serve as a warning to Brands and they should anticipate ways efficiently leverage higher engagement content formats.
  • Cost aside, there are two ongoing issues with Digital media. Digital was believed to enable brand marketers the ability to laser target the right consumer with the right message at the right time and place. The standard, Behavioral targeting, is past tense and based on what a web visitor viewed or general demographic data. The targeting is often segment based and not 1:1. It also fails to deliver a brand message at the Zero Moment of truth when a consumer is considering a purchase.
  • Measurement is the second systemic issue. Digital was believed to be breakthrough with regards to measuring ROI and impact of advertising on sales but there is much room for improvement. There is a lot of current focus on measuring engagement, viewability, etc. by companies like Comscore, Moat and others which is an improvement over clicks. But without a linkage to sales data, it’s difficult to equate advertising effectiveness to brand sales. Household panel matching offers some measurement but only at an aggregrate level which doesn’t give granular enough insight into the granular tactics available with digital marketing.
  • With a growing number of choices for brand advertising dollars, increasing rates, and room for improvement on measurement, publishers are left with two choices to attract advertising investment: 1) expand content to grow their audience. This is accomplished by moving into new content verticals or acquiring media properties to own more space in an existing content vertical. There is only so much expansion and consolidation available so content growth has limits. The second options is to branch out into new businesses like eCommerce which provide revenue but more importantly, sales data to measure media impact. This is the more strategic play since it closes the loop on marketing measurement and provides
  • There are early examples of this move to eCommerce with Harper’s Bazaar launching a high fashion online store (partnered with Saks for fulfillment) and facebook’s recent announcement of their gift program. Move to retailer trends 
  • Let’s review online and offline trends in retailing.eCommerce continues to grow at a significant rate and is outpacing traditional retail. We continue to see an expansion of what shoppers buy online, moving from high ticket, narrowly focused categories like electronics, to things like household consumables. The divide between online and brick/mortar is disappearing. eCommerce is important not just because of where consumers buy, but because it redefined the way retailers engage with shoppers. *transition slide*
  • Online reviews moved the decision at shelf to the virtual shelf with retailer sites playing an important role in product research and decision making. The top 3 places consumers named for researching products online were retailer sites (65%), brand sites (58%) and (33%). Social media sites ranked the lowest at 6%.[Source:  2010 Social Shopping Study.  thee-tailing group/PowerReviews. Mar. 2010.  Web.  4 May 2010]What brands had hoped to do through formal social media channels is happening through retailer platforms – consumers are rating, reviewing and advocating for brand products. This can transform categories. I think the automotive tire business and TireRack is one of the best examples of this. It works well because the customer is first and all parties benefit.
  • The accepted statistic is that over 70% 70% of decisions are made at shelf. But now the shelf is more than just a physical shelf, it’s a virtual shelf which includes ratings and review content via the retailer. 82% of consumers say their decisions have been influenced by ratings and reviews, which makes the retailer an even more powerful influencer of brand product decisions. 
  • Now that consumers have access to an incredible amount of information , retailers are forced to look beyond price to deliver value and attract shoppers. This is driving an emphasis on high value engagements with the shopper both in store and out of store. Retailers are looking for ways to educate the shopper, deliver high value content and information, and make the shopping experience as personalized as possible using the incredibly valuable data asset. If retailers know what a shopper buys, they can make their total shopping experience more personal.
  • most major chains can guarantee more eyeballs on a weekly basis than big network TV shows; What is the avg weekly store traffic for a major retailer as an example vs. viewing audience for a prime time TV show?Target led an evolution of retailers becoming brands with their “sign of the times” bulls eye campaign at the turn of the century. Retailers built marketing organizations, brought in talent, and integrated classic brand building into their business models. Now they have the ability to connect and communicate with their shoppers like a brand, and they have the ability to reach more eyeballs on a weekly basis than big network TV shows.
  • Retailers are also making a heavy push into digital and focusing on much more engaging connections with consumers. This is accomplished through significant investments in Big Data capability like Kroger’s relationship with dunnhumby, and Walmart Labs. The use of shopping data enables highly personalized connections that aren’t possibly with publishers and brands.
  • With the expanding consumer connections, retailers are building significant reach. Amazon, Walmart and Target websites generate traffic in the top 50 along with major publisher networks. Add the additional reach through mobile tools, email, and in-store, and the quickly move to the top with regards to connection opportunities with the shopper. These are marketing channels, not just retailers.
  • CPGs are shifting to digital and that shift is expected to continue to grow. Forrester is forecasting an annualized growth rate of 17% in digital spending through 2016 with the fastest growth in mobile and social. Brands are in digital. The next challenge is how to most effectively use digital.  
  • There are two brand digital priorities that I feel are most relevant to the retailer opportunity. The first is connecting with the shopper when they are most receptive and open to considering a purchase decision. You don’t know when that is going to happen so it leads to the second priority of being always on. Digital gives brands an opportunity to be in front of the consumer across many channels at any given time in hopes of being present at the ZMOT moment. 
  • There are also consumer habits online that are relevant to retailers. From a joint study by dunnhumby, Comscore and Accenture showed that CPG brand buyers over index on recipe sites, community sites and coupon related searches. Retailers are perfectly positioned to reach the CPG buyer across all three of these areas via recipe content, local connections with the shopper and as a central source for coupons.
  • The final comment regarding brand digital trends is the learning about facebook fans. Brands made a huge push into facebook over the past 18-24 mos. The majority of facebook fans are not the most loyal brand consumers and are primarily interested in coupons. Retailers can identify the most loyal fans through shopper data and serve as a channel for connecting with them. 
  • Brands need to think about retailers as a connected ecosystem and develop strategies based on how customers interact across that systemValue added services like content, mobile solutions, mobile payments, digital coupons, etc.And because retailers have shopper data, they can make those connections highly personalized and measureable.  …and for those reasons, every brand should be exploring new ways to strategically partner with retailers to connect with their customers.
  • +70% of decisions made at shelf which now includes the virtual shelf
  • The Convergence of Retailers and Publishers

    1. The convergence of retailers and publishers© dunnhumbyUSA 2012 | confidential
    2. Reevaluating the Role of the Retailer in BrandMarketing Talk about it: #dignc @allenrmason @dunnhumby© dunnhumbyUSA 2012 | confidential
    3. Online Media Trends© dunnhumbyUSA 2012 | confidential
    4. Digital Media Fragmentation & CPMsare on the Rise Fragmentation of Online Average CPMs will rise Spending 109% by 2017 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2012 2017© dunnhumbyUSA 2012 | confidential
    5. Digital Issue #1: Targeted media online has limits 1. Behavioral targeting based on content viewed or demographic data 2. Not 1:1 or delivered at “zero moment of truth” to the consumer© dunnhumbyUSA 2012 | confidential
    6. Digital Issue #2: Measurement lacks robust ROI ● Many focus on clicks, not sales and ROI due to an inability to close the loop© dunnhumbyUSA 2012 | confidential
    7. Publishers need to differentiate and grow But they are limited to: Content Commerce© dunnhumbyUSA 2012 | confidential
    8. Publishers see ecommerce as growth areas© dunnhumbyUSA 2012 | confidential
    9. Retailer Trends© dunnhumbyUSA 2012 | confidential
    10. Consistent eCommerce sales growth© dunnhumbyUSA 2012 | confidential
    11. Online reviews and The Virtual Shelf© dunnhumbyUSA 2012 | confidential
    12. More Decisions “at Shelf” than ever before of consumers say their purchase decisions have been directly influenced by user reviews, either influencing them to buy a different product than the one they had originally been thinking about purchasing or confirming the original purchase intention Source: Deloitte© dunnhumbyUSA 2012 | confidential
    13. Retailers can no longer compete on price alone ● Differentiation based on customer knowledge ● Focus on value delivered ● Driving highly personalized engagement© dunnhumbyUSA 2012 | confidential
    14. Retailers have become marketers© dunnhumbyUSA 2012 | confidential
    15. Heavy push into digital by traditional retailers 1 download every 30 seconds© dunnhumbyUSA 2012 | confidential
    16. Attracting as many visitors as largest publishers #6 Amazon #25 Walmart #49 Target© dunnhumbyUSA 2012 | confidential
    17. Brand Marketer Trends© dunnhumbyUSA 2012 | confidential
    18. CPGs are shifting have shifted to digital 17% Annual growth rate in digital spending Source: Forrester Research interactive marketing forecast 2011 to 2016 (US)© dunnhumbyUSA 2012 | confidential
    19. Brand Digital Priorities ● Make the brand message more relevant and connect at the “Zero Moment of Truth” “It’s a new decision-making moment that takes place a hundred million times a day on mobile phones, laptops and wired devices of all kinds” ● Be “Always on”© dunnhumbyUSA 2012 | confidential
    20. CPG Brand Buyers Online Behavior aligns withRetailer offerings© dunnhumbyUSA 2012 | confidential
    21. Consumers don’t always want a relationship ● #1 reason people like a brand is for coupons or discounts ● They arent your best customer, or your advocates© dunnhumbyUSA 2012 | confidential
    22. The Case for Re-evaluating Marketing Role of the Retailer© dunnhumbyUSA 2012 | confidential
    23. 4 Points that make the case 1. Consumers do more with a retailer than shop – the shopper- retailer relationship is broader and deeper than ever 2. Rapidly expanding multi-touchpoint connections with the consumer are engaging, relevant, and measureable 3. Retailers can use shopper sales data to deliver a personalized experience and measure the impact of marketing 4. Consumer interaction with a brand at retail doesn’t correlate with where the consumer buys the brand© dunnhumbyUSA 2012 | confidential
    24. There is no better advertising effectiveness measurement than marketing campaigns run with a retailer.© dunnhumbyUSA 2012 | confidential