On 5th April, ITV AdLabs announced that 12 FMCG brands were trialling its new retail media solution ‘Matchmaker’. Built in partnership with Boots and Tesco, the privacy-safe solution looks to leverage the retail stores’ rich 1st party loyalty card data for addressable targeting and measurement on ITV’s VOD platform. So how does the solution work and what are the wider ramifications for the growth and evolution of retail media?
Matchmaker is a data-driven targeting and measurement solution. It enables brands who supply products to Boots and Tesco to augment their VOD targeting on ITVX through the activation of category shopping audiences built from the retail stores’ rich 1st party loyalty card data. The solution is entirely cookieless and consented by design, leveraging Infosum’s privacy-first clean room technology for data matching. ITV has repeatedly invested in Infosum, which it sees as a crucial long-term partner for the expansion of its advertising capabilities. Infosum’s primary capability is to serve as a data-processing intermediary between brands. ITV, Boots, and Tesco each have their own data bunker in the cloud, which remains accessible only to them. They upload their 1st party data to their bunker. Infosum’s tech can then process, aggregate, and anonymise user data to extract non-personally identifiable information to target specific audiences. The privacy-safe targeting can then be pushed through to ITVX’s advertising platform, enabling cookieless targeting with the 1st party retail data as its fuel. With ITV’s 37M registered users and the combined 20M users of Boots’ Advantage Card and Tesco’s Clubcard databases, there is evidently huge scalability in the targeting potential offered by this solution. As well as activation, Matchmaker also offers accurate conversion and sales lift measurement, closing the loop on measuring the effectiveness of the solution. Although the initial trial is restricted to a handful of advertisers, including the likes of Walkers, Heineken, Magnum, and Sure, if the results are positive then we’re expecting a full roll-out to all qualifying FMCG brands in July.
ITV’s partnership with Boots and Tesco is another huge headline in the explosion of retail media that we first highlighted and discussed in January. Hailed as the 3rd great wave of advertising, retail media is re-examining the nature of commercial relationships and developing the end-to-end brand experience for customers. Retail media is growing exponentially year-on-year, with a global forecast of $121.9B in 2023, up 10% from the previous year. Although investment is now rising significantly, we are only just seeing the tip of the iceberg, as retail powerhouses look to build out capabilities with their rich 1st party customer data. Amazon are sitting on unparalleled levels of retail customer data and have been at the forefront of this new wave, steadily building out their advertising ecosystem over the past few years with ad placements on-site and on their O&O properties, including Twitch, Amazon Music, their Fire Stick and Alexa, and Display advertising on the OpenExchange through their proprietary DSP. In the US, Walmart is making similar headlines with the recent launch of three self-service lines, focused on on-site Display and Search ads and their own DSP that marries their expansive omnichannel 1st party data with The Trade Desk’s technology. In 2022 in the UK, Tesco and Dunhumby launched Tesco’s Media and Insight Platform, enabling brands stocked by Tesco to gain unparalleled insight into their customers and target them on Tesco’s site, with close-looped measurement to measure real-time uplift in sales performance. ITV’s Matchmaker is the latest high-profile usage of retail data, and in itself embodies a growing trend of novel and innovative ways to leverage retail data outside of its immediate retail commerce environment.
So, what’s in store for the evolution of retail media? Despite the initial rapid expansion of powerhouses like Amazon, Walmart and Tesco, the industry is still finding its feet in this space. In the short-term we will see a diversification of retail networks outside of the FMCG space, with the likes of Marriot and ASOS already announcing the development of their own networks. As we start to see an increased demand in the services across the industry, we’ll see rapid improvement in the technology and methodology for bidding and measurement. More power will be transferred to agencies and clients, who will demand more from retailers and begin to have more control in shaping the direction of travel. Dentsu recognised the incoming wave of retail media early on and is now in a prime position to accelerate retail strategy for our clients, with a core team of dedicated retail media specialists already formed. We expect to see significant developments within the space in the next 12 months, with increasingly relevant metrics and improved opportunities for data use and believe that now is the time to begin testing relevant retail media networks to get ahead of competitors, begin to form strong partnerships, and conduct early testing that will inform future strategy.