Ocado has launched a retail media offering called Ocado Ads, which “marks a new chapter in its journey”.
Ocado Ads would help brands “drive measurable growth” and deliver customer “relevant advertising and a personalised experience” the online pureplay grocer said.
Ads is made up of a number of elements including tools for brands to plan and manage campaigns, powered in partnership with retail media platform Zitcha; onsite and offsite, social media and connected TV advertising options; and insights and analytics via Ocado’s Beet platform.
The retailer said that advertisers could also leverage the Ocado NPD Lab for “the fastest NPD in the UK” and use A/B testing to compare the performance of different creatives. The grocer – which is on a six-month run as the UK’s fastest-growing supermarket, according to the latest Kantar figures – said it aimed to be “the home of test and learn for grocery advertising” in the UK.
“Ocado Ads is raising the bar for retail media,” said Jack Johnson, head of Ocado Ads at Ocado Retail. “We encourage all our suppliers to grow with us and so we’ve created Ocado Ads with a view to providing another growth engine for brands. Ocado has been an innovative and disruptive force in the industry since its creation and we believe this will boost our approach to retail media.
“Ocado Ads has a flexible operating model that challenges the one-size-fits-all approach of traditional retail media networks,” Johnson added. “Whether you’re an advertiser or an agency, you can have it your way: fully self-serve, completely managed, or anywhere in between.”
The launch of Ocado Ads comes as ad spend for the retail media industry is expected to pass £4bn in the UK this year, according to Insider Intelligence forecasts, and set to almost double that by 2027, the highest spend in western Europe. Spend globally is poised to grow a further 10% this year, after reaching $128.2bn in 2023, according to WARC Media’s latest Global Ad Trends report. The extraordinary growth will – as Tesco told suppliers at an event earlier this summer – make the medium bigger than television by the end of 2025, behind only paid search and social media.
For retailers, selling ads on the channels they own – covering both online and in store – offers “robust margins” of 70% to 90%, according to research by Boston Consulting Group.
Most supermarkets now offer retail media services, with many having refreshed and repackaged their offerings into specialised retail media agencies. The big four grocers now all boast dedicated media groups, as do the likes of Co-op, Boots, Superdrug, Deliveroo and others. Lidl owner Schwarz Group announced in 2022 a retail media effort, and last year opened advertiser access to its data.
Being purely online gave Ocado an advantage in the retail media space, argued Ocado Retail chief commercial officer Amit Chitnis in The Grocer last month. The retailer knew its customers “very deeply and very forensically” he said, including their address, purchase history and preferences, as well as exactly how baskets were built and “what you hovered on and chose not to buy”.
“It’s the equivalent of a physical store if there was eyeball tracking technology and thousands of cameras doing that for every customer,” Chitnis said.
Troy Townsend, Zitcha CEO, said his company was helping Ocado “integrate the entire business around its retail media network”.
“For us that means building out cross-functional capability and offering full visibility on the planning and delivery of retail media for the whole business,” he said. “Ocado is spearheading the use of our joint business planning tools and will be the first in EMEA to access Zitcha’s single customer-view platform, where it can manage its network to scale and deliver against its bottom line.
“By seamlessly integrating, Zitcha can expand current capabilities and unlock new ones. The Ocado partnership illustrates how our platform can empower an existing retail media network to drive growth and maximise performance.”
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