The Mars Agency’s Kandi Arrington and Ethan Goodman tackle some of the most common questions brands ask about retail media strategy.
You can’t achieve maximum results from retail media when it’s managed in a silo. The strategy that guides our work with some of the world’s largest CPG organizations is the treatment of retail media as an integral — and therefore integrated — part of a brand’s overall marketing strategy.
This best-in-class approach to retail media requires deep expertise in, and tight integration with, the other key elements of the brand’s customer engagement activity: trade, shopper, ecommerce, and the merchant relationship. But beyond that, it also demands integration with consumer promotions and brand initiatives as well.
Achieving that level of internal alignment is, of course, no easy task (and is discussed in greater detail here), which leads many brands to ask the following questions.
QUESTION: What’s the biggest challenge brands face as they try to align internally across functions? How do you solve for that?
Ethan Goodman: The biggest obstacle is overcoming legacy structures — and legacy thinking — to break down silos that have existed for decades.
For a long time, Walmart had separate P&Ls for their ecommerce and brick-and-mortar businesses, and the merchants for each had competing incentives. In large CPG organizations, we still often see the same kinds of issues — the media team wants to control their territory, the sales team is protective of their domain, and so on down the line. It can therefore be a real challenge bringing everybody to the table and adopting the “one team” mindset you need to win with omnichannel retailers.
But it doesn’t necessarily require a wholesale restructuring of the organization. It can literally be a simple monthly meeting that brings all the relevant stakeholders together to talk. It’s amazing how much progress you can make just by having the right people in the room to hold the right conversations — and you don’t have to blow anything up.
Kandi Arrington: It all starts with communication. We’ve often asked the team we’re working with to outline their brand’s key goals for the year, and they can’t because every silo has its own success criteria. So even just communicating to each other what success looks like, and understanding how it can all work together, is extremely important.
Ethan: As for best-in-class solutions, there isn’t a one-size-fits-all approach. In a special report we published last year called “Making Sense of Retail Media,” we identified five different operating models for dealing with retail media. And while all five structures can work, we have a favorite that’s also probably the simplest option: the Single Point of Contact model.
A lot of CPG organizations have multiple touch points with the retailer — sometimes dealing with the retail media network separately while both the national media and sales teams have their own conversations.
In the Single Point of Contact model, one function inside the organization takes lead responsibility for all activities with the retailer. A cross-functional committee works “behind the scenes” to provide input and guidance, but the brand has only “one face” working directly with the retailer. This is the model we’ve seen achieve the greatest success.
Kandi: The next logical question is, who should take lead? We think it should be the sales team lead for that retailer. Why? Because retail media and marketing in general are most successful when they’re aligned from a total business perspective, and the sales team already owns the merchant relationship — if you don’t have enough product on-shelf at the right time and place, what can your marketing even hope to accomplish?
This doesn’t mean that the sales lead can’t bring the shopper marketer or the media person to the meetings when needed. But to maintain consistency, you need to have one megaphone that will keep the organization focused on the total business, and we’ve seen the greatest success when it’s the sales team.
Get more insights from previous Fast FAQs:
What metrics should brands be using to measure retail media performance?
Are there any best practices for measuring iROAS?
In terms of collaborative joint value planning, what retailer is best in class?
What percentage of your overall marketing spend should be allocated to retail media?
How do you compare results across retailer media networks when attribution windows vary so much?
