Kroger Adds CTV Inventory To Its Retail Media Offering

Kroger Precision Marketing, the grocer’s advertising and data business, announced an expansion into CTV and video inventory channels on Monday.

Late last year, Kroger set up a private marketplace so that advertisers and certain demand-side ad tech partners can use Kroger data to buy and measure campaigns. That was for display-only campaigns, though, until the official roll-out today of CTV supply.

“It’s critical to … move into these channels that are increasing with respect to where advertisers are investing their dollars,” said Cara Pratt, SVP and head of the Kroger Precision Marketing business. Kroger data can help advertisers demonstrate how CTV performs.

KPM’s initial CTV partners are Xandr, PubMatic, OpenX and Magnite, which is the only vendor that’s net-new to the Kroger ad platform.

One might wonder why expanding from display-only to CTV is a difficult jump. It’s all programmatic, after all.

“The audience creation capability is the same,” Pratt said. And the targeting and measurement is based on the same Kroger identity data set.

But TV campaigns are often bought ahead of time at negotiated rates, Pratt said. “And then there’s a small markup for our services on top of that the audience and measurement standards.”

Those costs can be tough for TV buyers to swallow.

Programmatic buyers are accustomed to campaigns that over-index on data costs. Kroger’s first-party data is relatively expensive, compared to using a third-party data provider that promises store sales lift attribution. For a programmatic display campaign, the data might account for a third of the overall budget, since the point is it’s being used to target more valuable audiences and attribute campaigns across much cheaper online inventory.

On the other hand, national TV advertisers, especially big CPG brands with upfront rates, are used to software and data costs eating up some single-digit percent of the media plan. That’s the difficult transition for KPM as it adds CTV – not just proving the ROI of a campaign, but the value of the data itself.

KPM has put its retail data to use in CTV. Last year it announced a partnership with Roku to attribute Roku DSP campaigns using Kroger sales data, which Pratt said has already been used in more than 100 campaigns. However, that isn’t the Kroger PMP or Kroger ad campaigns. Those are Roku managed service campaigns.

Now, the pipes are actually running through the retailer’s platform.

The retail media expansion into CTV is also part of a trend of retailers growing beyond their own managed service offerings.

Grocer’s like Kroger, Walmart, Target and Albertson’s have had CPG advertising accounts for years, if not decades. But historically those are all managed services; the grocer works with the brand on ways to display or promote the product on a shelf, but it’s executed by the store. A brand can’t issue its own coupons willy-nilly, for instance, without the store’s backing.

But those brand marketers are evolving.

“As you think about the top 50 or 100 type advertisers, they’re very comfortable hands-on-keys on the buy side at this point,” Pratt said. Those large CPG brands are creating more of their own direct publisher integrations and working in a more sophisticated way with SSPs and exchanges.

The PMP product is built for these self-serve use cases, she said.

Advertisers in general are moving from managed offerings, like linear TV ads, which brands send to broadcasters and the broadcasters place across their networks mostly as they see fit, to programmatic or CTV campaigns controlled by the brand.

If one brand or DSP plugs into Magnite, say, with another to OpenX and a third campaign on a direct deal with Xandr, KPM needs those partnerships in place to enable self-serve advertising on its platform.

CTV and self-serve advertising are the priorities among large brand advertisers, Pratt said.

“That’s the dynamic that, as streaming becomes the most common form of how people consume content, we knew we needed to create the capability to be there.”

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