In this Q&A, Wen Zhe Lim, Director, Advertising & Partnerships, foodpanda and Chris Mooney GM, Data Partnerships APAC, The Trade Desk, discuss how retail media is poised to elevate the advertising landscape, in an era where third-party cookies are set to be phased out completely this year, posing challenges for brands and advertisers in audience targeting and performance measurement.
1. Can you share with us your take on retail media and how can it help digital advertising?
Wen Zhe: With the sunset of third-party cookies and the rise of consent marketing, retail media has emerged as an advertising tool of choice for many brands – which I believe will only grow more relevant as it addresses multiple pain points faced by marketers.
Retail media is so effective because it reaches potential customers who are already in shopping mode. A retail media platform like foodpanda has access to rich data including purchase patterns and intent which can inform marketers to deliver relevant, useful and timely ads to target audiences. This helps brands improve the shopping experience for customers as they see ads that align with their interests.
Chris: Global marketing leaders today face unprecedented challenges and pressures driven by factors such as shrinking media budgets, driving them to do more with less. This complexity is further compounded by intensified competition, exemplified by more choice and the rise of direct-to-consumer (DTC) brands, etc.
Retail data plays a pivotal role in enabling these strategies, facilitating growth in multiple ways. It provides scaled reach and measurement necessary for global marketers, allowing them to reach relevant audiences and personalize connections.
Derived from loyalty programs and online/in-store purchases, this data offers valuable insights into consumer behavior, fostering personalized connections and driving revenue. Additionally, retail data furnishes in-flight sales signals for transparent reporting and closed-loop measurement, connecting digital campaigns across channels and driving sales.
2. What are the impacts or challenges of the phase out of third-party cookies, and how can first-party data offset or address these challenges?
Wen Zhe: The loss of third-party cookies disrupts traditional targeting and measurement methods, pushing marketers to diversify their advertising spend. Strategies that use first-party data, such as retail media advertising, will increasingly become the default, as they provide a deeper understanding of customer preferences, behaviors, and purchasing patterns to reach their potential customers effectively.
Additionally, we will increasingly see partnerships between platforms and publishers that enhances marketers’ access to first-party data beyond their own sources. This provides more information about their target audience, enriching the quality of insights derived from the data – hence enabling more precise targeting and personalized marketing campaigns.
Full-funnel advertising has become extremely important in understanding the customer’s journey, with retail media advertising playing a significant role in this strategy. It allows retailers to engage with customers at various stages of the funnel, from initial awareness to final purchase, targeting consumers with highly relevant and personalized ads throughout their journey.
Chris: Firstly, it’s important to note that the deprecation of third-party cookies does have some impact on the targeting and measurement of digital advertising, but that’s primarily in the desktop browsing environment. Furthermore, nearly all major browsers except Chrome are defaulting to block third-party cookies.
Secondly, and more importantly, consumers are spending more of their digital time on open internet channels such as CTV/OTT, apps, streaming music that do not rely on third party cookies. This shift indicates the emergence of new internet landscape.
Given these reasons, I believe it would be more constructive to seek alternative solutions that adapt to the evolving internet landscape mentioned above, while also complying with privacy standards, to continue delivering personalized targeted ads to consumers—rather than discussing the impact of cookie deprecation.
These alternative solutions include privacy-compliant identity solutions like Unified ID 2.0 (UID2), or channels that do not rely on cookies such as CTV, streaming, apps, DOOH, and other open internet channels, as well as the collection and utilization of first-party data (such as their own first-party data and retail data). Advertisers may need to explore alternative measurement solutions.
3. Lastly, what are the trends you see in the Asia-Pacific when it comes to retail media?
Wen Zhe: I foresee retail media attracting a wider range of brands in the future. Beyond endemic brands, we’ll see a diverse mix of companies recognizing the power of retail media in reaching and engaging with consumers effectively.
Chris: No doubt, retail media is poised for rapid growth in the APAC region. eMarketer data shows that Retail Media spending for all types of activations across digital marketing will reach 140bn by 2024 and will make up one-fifth of worldwide digital ad spend in this year.
In APAC, a recent report released by IAB shows that all APAC marketers are planning to increase their retail media spend over the next 12 months. There is a lot of opportunity for us to tap into.
Retail data has historically been reserved for the lower funnel/shopper teams. However, the landscape has evolved, and now marketers have the opportunity to integrate retail data into their omnichannel strategies.
