Many CPGs are having trouble scaling RMNs. CPG marketing teams will need forward-thinking strategies to become better stewards. Identifying the retailers most critical to supporting organizational goals with their corresponding media spend can help consumer goods CMOs make strategic investment decisions on what retail networks to use and how much resources (both personal and budget) are required to support them.
RMNs primarily benefit CPGs by reaching consumers on retailer websites at the point of purchase, yet more off-site media capabilities will continue to emerge as retailers seek to monetize their own channels. Placement in retailer emails or special programs like holiday promotions will challenge consumer goods leaders to determine what programs offer the best results.
RMNs appeal significantly to the CPG industry because products are sold directly on the retailer websites, but other industries are beginning to test media on networks. Industries ranging from automobiles to insurance providers are testing ads on these networks to reach valuable consumers. As retail media capabilities scale and improve, it will become easier for non-CPG brands to participate in these networks for improved targeting and audience-building.
Retailers try to grow private-label brands and retail media networks
Retailers must endure the push-pull challenge to grow private labels (aka, store brands) while continuing to support national brands that consumers covet. The growth of private-label brands can clash with initiatives that retailers have to grow retail media. On one hand, the increased competition of store brands encourages national brands to increase investments in retail media.
RMNs also provide new tools to show store brand ads to consumers. However, the downside results in fewer advertisers if store brands replace national brands. Multibrand retail CMOs who oversee RMNs in addition to private-label brands have the advantage of setting clear goals for both. CMOs who do not have responsibility over RMNs must work together with their counterparts to ensure the company’s overarching goals supersede any specific department goals.
Private-label brands are critical for many retailers to differentiate their offerings and keep their pricing competitive as many consumers are trading down to combat inflation and higher pricing.
How CMOs can get started on leading their teams through the realities of RMNs
CPG CMOs can lead their marketing teams by engaging with cross-functional team leaders to better define the roles and responsibilities each has in retail media.
To more efficiently spend and effectively structure your organization to participate in retail media advertising, CMOs should evaluate their organization’s current maturity level. Do this by assessing the current state across five dimensions: retailer prioritization, team and role structure, media measurement, budget optimizations and audience segmentation.
Start this exercise at the senior leadership level and obtain cross-functional team feedback in your discovery assessment. Include key internal stakeholder teams responsible for media advertising types like social, programmatic display advertising and OTT. External agency partners can be looped in after your organization has defined budget and strategic objectives for your agency to help build your retail media advertising strategy.
Different steps are required, depending on your organization’s internal and external retail media maturity. For example, if your organization’s internal RMN knowledge is low but your media agency’s RMN experience and ad-targeting capabilities are high, focus on internal organization buy-in and strategic direction before building an RMN priority list.
This story is part of Adweek’s Beyond the Transaction special feature, which spotlights the people and strategies driving business growth and brand awareness.
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