June 2024: This is the first a series of Q&A articles from members of the IAB Australia Retail Media Working Group. In this article Lachlan Brahe from Cashrewards and Michael Levine discuss trade and media budget allocations for retail media investment
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Lachlan Brahe, General Manager – Retail Media, Cashrewards
“Will the distinction between trade and media budgets decrease over time?”
Yes, it will decrease, particularly in areas like promotions and co-operative advertising. Trade budgets often encompass discounting, competitive pricing strategies, rebates, and other B2B activities designed to garner retailer support. These elements, while influential, don’t have direct counterparts in retail media. However, the consumer-facing aspects of trade investments and media budgets are converging.
The narrowing distinction between media budgets (especially retail media) and the promotional/advertising aspects of trade investments will be driven by the measurability and accountability of retail media applied to trade. Standardising costs to reach customers via media/promotional channels and determining ROAS or effectiveness for comparable formats at the lower funnel or Point of Purchase is key.
What remains unclear is how trade and retail media spends will converge as retail media expands beyond traditional trade domains into omnichannel and full-funnel approaches. Retail media’s strengths lie in precise audience targeting and direct sales attribution. As retail media expands into off-site channels, programmatic advertising, DooH, CTV, and streaming platforms, trade budgets may follow customer eyeballs into these environments, offering greater creative expression and measurable impact. Simultaneously, in-store environments are being digitised to enhance creativity and audience targeting – blurring the lines between retail media and trade. The future will likely see a blend of both, leveraging each other’s strengths for maximum impact.
As the landscape evolves, the boundaries between trade and media budgets are fading. The integration of retail media’s precise targeting and measurability with trade’s broader strategies will create a more unified and efficient approach to reaching and engaging consumers.
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Michael Levine, Head of Advertising Sales ANZ, Uber
Question: There is a lot of market discussion in relation to trade and media funding pools for retail media investments. Why is this topic driving so much discussion? Does it matter?
The topic of trade and media funding pools for retail media investments is driving significant discussion due to the evolving dynamics of consumer behavior and the changing landscape of marketing strategies. The traditional sales funnel, once a linear and predictable path from awareness across traditional media platforms to purchase within bricks and mortar stores, is collapsing.
Through new digital media channels, consumers can now jump back and forth between different stages of the buying process rapidly, making it more critical than ever for trade and media teams to collaborate closely. This shift necessitates a seamless integration of trade and media efforts to ensure that every dollar spent on media is maximised for effectiveness. When trade and media teams operate in silos, there is a risk of duplicative efforts, inefficiencies, and missed opportunities to influence consumer behaviour at the optimal points. By aligning these teams, businesses can gain comprehensive visibility into their activities, allowing for more strategic planning and execution.
Furthermore, the integration of trade and media funding pools allows for a more agile and responsive approach to market changes. With the emergence of fast commerce platforms like Uber Eats, consumer preferences in how they want to purchase your product can shift rapidly, having a unified strategy enables quicker adjustments and more targeted interventions.
Uber and Uber Eats exemplify the benefits of such collaboration. By connecting brand awareness formats during Uber rides with conversion formats on Uber Eats, these platforms can engage customers effectively at multiple touchpoints, driving both brand recognition and immediate sales. This integrated approach demonstrates how coordinated efforts can maximise impact, emphasising the need for improved communication and collaboration across the industry.
Ultimately, the discussion around this topic matters because it addresses the need for businesses to adapt to a more complex and fast-paced marketplace. By fostering collaboration between trade and media teams, companies can enhance their overall marketing efficiency, drive better results, and stay competitive in an increasingly fragmented and dynamic retail environment.
What does the industry need to do to help with communication across trade and media teams?
The industry must prioritise better insights, measurement, and collaboration while minimising jargon.
Establishing unified metrics that can be used across trade and media activities will ensure that all teams are working towards the same goals and can accurately assess the effectiveness of their strategies. Collaboration can be fostered by creating cross-functional teams and regular communication forums where trade and media professionals can share insights, challenges, and successes. Encouraging a culture of collaboration rather than competition will help in breaking down silos and promoting a holistic approach to marketing strategies.
Reducing jargon is another important aspect. Using simple, clear language ensures that everyone in the retail media space, regardless of their specific expertise, can understand and contribute to discussions.
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For more information on retail media check out the following resources:
Retail Media Glossary of Terms
Foundations of Retail Media e-learning