Retail media networks are having a moment, as a result of they’re positioned so as to add relevance in a cookieless world, says Luke Kigel, VP of Walgreens built-in media and head of the Walgreens Promoting Group (WAG).
Walgreens put a bow on its retail media network, dubbed WAG, in early December.
However the launch is a component of a bigger ongoing transformation. Walgreens is within the midst of evolving from a “historically minded” retailer to at least one that’s each “digital first and viewers first,” Kigel mentioned.
“In some ways, this has all been a part of a multiyear macro transformation of Walgreens in direction of digitization,” he mentioned. “And from a advertising and communications standpoint, it’s enabling us to unlock the worth of our first-party knowledge – which is straightforward to say and never really easy to do.”
Even so, many of the biggie retailers, together with Walgreens, consider that the juice is definitely worth the squeeze. Over the previous few years, Walmart, CVS Pharmacy, Target/Roundel, Kroger, Finest Purchase and The Residence Depot have all rolled out media networks of their very own.
Listed here are the highest six issues you should know in regards to the Walgreens strategy to retail media.
1. First-party knowledge
The myWalgreens loyalty program, which has greater than 100 million members, types the inspiration of the first-party knowledge set that Walgreens makes use of to underpin WAG in addition to its personal advertising and co-marketing actions.
Walgreens additionally has a big bodily footprint of greater than 9,000 shops unfold throughout all 50 states, Washington, DC, Puerto Rico and the US Virgin Islands.
However sitting on wealthy first-party knowledge property is one factor – and attending to the type of scale that may appeal to advertisers is one other.
There’s no denying that Fb, Google and Amazon are answerable for practically two-thirds of all digital funding, Kigel mentioned, however they don’t have the identical omnichannel first-party knowledge entry as a big retailer.
“I come from CPG lands the place we will create segmentation that’s based mostly on actual buy conduct,” he mentioned, “and our relationship with the shopper is channel agnostic.”
Walgreens additionally has a workforce of in-house knowledge scientists that may run superior modeling in opposition to its first-party knowledge set, which permits Walgreens to increase an advertiser’s attain and ship customized viewers segments as a part of a model’s broader viewers technique.
“We see something from a 50% potential enchancment to greater than 2x when incorporating first-party knowledge, both as an viewers section or as a seed to do modeling,” Kigel mentioned.
3. The tech
Along with its owned-and-operated channels, Walgreens has direct relationships with Fb, YouTube, and Pinterest to match clients on offsite platforms. It not too long ago struck partnerships with Adobe and Microsoft to boost and personalize the drug retailer expertise.
Walgreens additionally has a partnership with Epsilon to accommodate all of its loyalty and SKU-level transaction knowledge, and Epsilon powers the Walgreens DSP, which permits for real-time execution and optimization tied to dynamic inventive capabilities, viewers segmentation and marketing campaign reporting. Model companions can activate media on Walgreens O&O, on third-party accomplice websites, and in Walgreens retailer areas.
Out there codecs embrace show and video, with linked TV activation on the street map.
4. Match charges
As a result of WAG operates as a closed loop system and thru direct partnerships, there’s no unbiased onboarding required, and that helps enhance match charges.
Though Kigel declined to share particular numbers, he mentioned that Walgreens model companions see match charges which can be increased than the business normal for digital media shopping for.
5. The service layer
For the second, WAG is a managed service, though Walgreens is “actively pursuing mechanisms to make it simpler to work with us,” Kigel mentioned.
Count on extra self-service parts over the following three to 6 months.
Like different retail media networks, Walgreens affords reporting due to its giant retail footprint.
Since its analytics is predicated on a first-party knowledge set, Walgreens has a superb sense of advert effectiveness and incremenality based mostly on marketing campaign execution.
“Like the whole lot else on this business, there’s nuance based mostly on the information that’s out there from totally different companions,” Kigel mentioned. “However as a result of now we have a direct relationship with our shoppers – and since we’re agnostic when it comes to shops versus ecommerce – we will attribute direct purchases again to media activation.”
And that functionality ties straight into why retail media networks are popping up proper now.
With third-party cookies on the best way out, advertisers are searching for first-party knowledge entry wherever they will get it.
“First-party knowledge – and the power to make use of it – is a giant a part of the worth we deliver to the desk within the conversations we’re having with manufacturers and media businesses,” Kigel mentioned. “And from a focusing on, measurement, and efficiency standpoint, we all know that it performs higher than third-party focusing on.”