And everyone is an ad network

So you now have an ecosystem where valuable first party data on people’s purchases is going to be widely available to be deployed at scale.

What does all this mean for marketers, especially those in CPG?

Implication for marketers

Imagine you are P&G, and you’ve been defining your target audience in terms of demographics for the last 100 years.Take the example of the brand Olay, and the category of bodywash. In the TV era, you defined your audience as Female 25-44 and were able to reach a % of them through linear TV.But was this optimal? Wouldn’t you like to sharpen your focus?

In the digital era, you added a further layer of audiences defined by their browsing behavior – The kind of websites they visited, the pages they liked, etc. So you added additional targeting elements of ‘Beauty mavens’ or ‘ Beauty and wellness’.

Maybe this is better, but was it optimal?

The uncomfortable truth about digital audiences is that they are not created equal. We know a universal human truth that what people do is a far more important indicator than what they say. The marketing corollary of that is that what people buy is a far better indicator of their future purchases than what they ‘like’, the pages they follow or the websites they visit.

What if you had the opportunity to define the audience truly in terms of purchase behavior? You could say the audience for Olay body wash – is anyone who has purchased any other body wash in the last 3 months, above a certain price point.

Wouldn’t this be far more optimal?

Marketing nirvana(?)

That’s exactly what retail media audiences will do to marketing.You can now slice and dice your audiences into lapsers, category buyers, brand buyers, category non-buyers, brand non-buyers and many many more relevant audience cuts. Currently retailers don’t have the scale or engagement platforms that social media or CTV have. But that’s changing. Every passing day the industry announces a collaboration between an RMN and a social media/CTV platform, and eventually the market will move towards providing advertisers with the choice of reaching someone who has lapsed out of buying an Olay bodywash when they’re watching Hulu.

When CPG companies start working with retail media audiences and start seeing the impact, do you think there’s any going back to the old types of targeting?

There’s a revolution coming in the way marketers build their fundamental plans, and it’s going to start with the way they define their audiences.