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Kroger Precision Marketing casts vision for a new age of media accountability

February 09, 2022

The time’s up for the digital media industry to hold itself to a higher standard of advertising accountability. In their keynote address at the IAB Annual Leadership Meeting in New York City, Kroger Precision Marketing SVP Cara Pratt and The Kroger Co. VP and Head of Marketing Amanda Rassi laid out their vision for the future of media measurement, transparency, and trust.

Together, Pratt and Rassi shared Kroger’s mission to pave the way for this new era.

Media leaders need to act now

“It is up to us, the established leaders in digital media and retail, to keep pace with consumer needs and expectations. It is up to us to earn every engagement. It is up to us to protect the trust that consumers put in us,” Rassi said. “But as a national brand marketer – speaking to digital media leaders – I’m concerned about the growing trust-gap between consumers and the digital marketing world.”

She pointed to research shared in last year’s IAB Outlook, revealing how consumers feel less comfortable sharing their data with businesses.

“The digital media industry needs to become more accountable for the advertising we sell,” Pratt added. “Consumers deserve transparency.”

The third-wave of digital advertising will set new expectations

Kroger and other retailers have emerged as the unexpected innovators in digital advertising. “eMarketer has called retail media the third wave of digital advertising – following the first wave of search advertising and the second wave of social media,” Pratt said.

The primary force driving this third wave of digital advertising? Accountability. “The closed-loop reporting of retail media—our ability to compare a media exposure to online and in-store sales—means that greater accountability for performance is baked-in to our business,” she said.

But the rest of the digital media industry can’t be left behind, and retailers alone can’t meet all of the needs for brands, Pratt said. Rather, in the same way that search engines and social media changed digital media forever, this third wave of digital advertising will impact the entire industry moving forward.

Kroger’s keys to creating more media accountability

Rassi explained how Kroger defines accountability as a measurable standard of what’s right. “We categorize these standards into three areas: what is right for consumers, what is right for brand marketers, and what is right for the media industry,” she said.

Do what’s right for consumers. “Millions of households use our loyalty program because they understand this simple exchange: ‘the more I shop with Kroger, the more I earn,’” Rassi said. “The result is that 96% of our sales are connected to a loyalty account.”

But the value exchange doesn’t end with how Kroger earns data—it extends to how that first-party data is applied.

“We infuse insights from our first-party data at each step to bring increased relevancy along the way,” Rassi said. “As a result of our customer-first media planning, we improved overall media responsiveness by 11% last year.”

Do what’s right for brands. Pratt explained, “At Kroger, we’re not just concerned about our own brand. We need the brands we sell on our shelves to be effective in their advertising, too,” she said. “With that in mind, we created our retail media business – Kroger Precision Marketing (KPM) – over four years ago.”

Pratt pointed to the main reason retail media networks are gaining share of ad spend: their ability to reduce wasted impressions. KPM, for example, has a team of data scientists using 45 machine-learning models to pre-optimize audiences against households most likely to be receptive to a specific campaign. The outcomes include a 25 to 30% average uplift in household penetration for brands looking to increase consideration, and 35 to 40% average sales uplift across all media channels for brands looking to increase conversions.

With their access to exclusive sales data, “Retail media networks are able to identify sales from loyal buyers, lapsed buyers or first-time buyers. Brands need to know if their media investment is driving truly incremental growth.”

Do what’s right for the media industry. Taking care of consumers and brands “doesn’t have to mean sacrifices for the media industry,” Pratt added. “Rather, it means we can all move together into the third wave of digital advertising with a more accountable media ecosystem.”

She urged the gathering of media industry leaders to follow Kroger’s lead and do what’s right for everyone in the IAB: “Let’s bite the bullet and agree on common and universal metrics for reporting media quality.”

Pratt continued: “Strategic choices have to be made. But landing on common definitions for quality and business outcomes will give us the credibility to lead that strategic conversation with advertisers.”

The result: A more accountable media ecosystem for all

Pratt and Rassi wrapped up their keynote address with a call to the entire digital advertising ecosystem: Drive more accountability now. That means earning consumer trust, delivering more value, reducing wasted impressions, establishing universal definitions for quality and measurement, and building more bridges between trusted partners.

“Let’s work together to do what is right for consumers, what’s right for brands and what’s right for the future of our digital ad economy,” Pratt said.

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