Cheat Sheet: Inside Carrefour’s ‘competitive’ retail media pitch to advertisers

CPG

Supermarkets are definitely in the ad sales game judging by Carrefour’s latest announcements. 

The France-based supermarket chain’s director of data, e-commerce and digital transformation Elodie Perthuisot believes retailers will grow to have more influence over media dollars. If Carrefour’s new deals are anything to go by then it’s well on its way. Google, Criteo and LiveRamp were announced earlier this week (June. 14) as companies that will turbocharge the U.K.-based global supermarket chain’s transformation into an ads business. 

And It shows the company has learned from the missteps of its U.S. counterparts. Several years ago, many of those businesses tried and failed to standup ad sales business alone. Carrefour’s latest deals are an admission it isn’t an ad tech business and so has to be more honest with itself about what it can and can’t do. It can’t afford to make too many mistakes — certainly not when success as an online media owner is so intertwined with success as an online retailer. 

Important as e-commerce is for the likes of Carrefour is, its hard to turn a profit on it — at least in the short-term — thanks to the huge sums needed to expand online. On the flip side, ads generate fat margins. So media dollars are essentially a way for Carrefour to offset those meaty e-commerce costs.

“We can measure that 20% of our sales in-stores are directly impacted by our digital marketing campaign,” said Perthuisot. “The retail media market is worth €30 billion ($36 billion) in the U.K. and €500 million ($600 million) in France.”

A concerted push for media dollars: Carrefour’s partnerships will try to overcome three of the big pitfalls its peers have stumbled into on the route to ad sales: Google’s cloud platform means Carrefour isn’t bogged down with having to build and maintain its own tech: Criteo will be a source of media spending thanks to its own clients using its targeting tech to reach shoppers on Carrefour. LiveRamp’s will provide the building blocks for a safe haven of sorts where the supermarket and its advertisers can share data without someone’s privacy being compromised. None of these are new per se. Criteo also powers the likes of Roundel, for example. The difference will be in how much scale Carrefour can eke from each growth stream as it tries to cement its version of a self-serve retail network media — Carrefour Links — in the minds of marketers.

Wait, what’s a retail media network? It’s a supermarket’s version of an ads business. Marketers turn to these retail media networks to access various products and services that help them buy, track and measure ads in the same, or close to, the environments where they sell ads. It’s not a new concept but has become crucial for supermarkets hoping to turn e-commerce into a sustainable business. In 2020, Merkle set up six retail media networks, for example. If executed properly, these media networks can be a win-win for both retailers and marketers. Unlike other online marketplaces, the ads in retail media networks are very close to the point of purchase, meaning it’s easier for marketers to see how much they influenced a sale. 

“Spending on retail media is big and growing very fast,” said Donna Sharp, managing director at Medialink. “Part of this is down to the strong arm of the retailer which will push advertisers to spend more thanks to the control they have. But the other factor is down to more SKUs being available online so companies are supporting more products online — and that’s not just on Amazon but also in other areas like grocery stores where the growth in click-and-collect is fueling sales.”

Success will come down to the data: Not least because third-party cookies are going away. Whenever this happens, Carrefour will become a source of audience data outside of the walled gardens. After all, CPG advertisers have a fairly limited view of their customers given they sell via retailers. Carrefour, however, wants to change this. Essentially, the plan isn’t too dissimilar to what publishers are doing. Like publishers, Carrefour has an abundance of audience data that they need to scale and monetize without putting their customer’s privacy at risk. Enter the data clean room, which will be available in Carrefour’s global markets including Spain, Italy, Belgium, Brazil and Taiwan. 

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“We are based on rich, first-party data, which has more value to determine audiences for marketers,” said Perthuisot. “The goal for us is to be very competitive in the overall marketing market because CPG advertisers have money to spend now.”

How does this data clean room work in retail media? Carrefour’s partnership with LiveRamp boils down to a data clean room. Let’s say a CPG advertiser wants to understand how consumers are buying diapers in Carrefour’s stores based on actual transaction data. Doing so provides a baseline of sorts to overlay campaign data on top of, which would hopefully unearth new insights like whether people are moving to a different brand as their baby grows, for example. For this to happen, each data set sits in its own siloed cloud environment. From here, LiveRamp’s technology runs different queries, whether it’s for insights activation or measurement, across those environments — this way the data doesn’t have to be moved or even commingled, which could lead to data leakage. 

The runway for growth here is long, according to Carrefour. What would start out as offering insights and measurement to advertisers eventually becomes a more holistic look at category management. Doing so blurs the lines between online advertising and shopper marketing and subsequently makes it easier for CPG advertisers to consolidate spending. 

How it started: Carrefour has been easing its way into the world of ad sales since 2019. It has worked with the likes of CPG advertiser Nestle on a retail version of a private marketplace deal for programmatic campaigns, while its Carrefour Media arm has worked with data companies like Acxiom and Artefact to find ways to make its own audiences more accessible to advertisers.  

How it’s going: As it stands, 20% of store sales are already influenced by its digital ad sales, said Perthuisot, who pointed out that nearly a quarter (23%) of the products that end up in a shopping basket on its sites are the result of recommendations from its own proprietary algorithm.

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