Kroger moves its retail media ad tech in-house

Kroger’s retail media arm on Wednesday said it is building an in-house advertising platform to streamline the retail media buying process and create a unified marketing strategy.

To start, Kroger Precision Marketing’s (KPM) new self-service platform will encompass the retailer’s existing product listing ads and onsite display advertising. Soon, however, it will power all of KPM’s retail media portfolio. All advertisers will be able to transition to the new platform by the end of the year.

“It’s a bold ambition but one we fundamentally believe is right in front of us,” Cara Pratt, SVP of KPM, told Winsight Grocery Business in advance of the announcement. “There’s been too much friction on the buy side … This kicks off a really important journey. We’ve been underway with this for 18 months.”

KPM will add about 100 net new roles to support the new platform, adding to the several hundred people who have worked to build the retail media business in the more than five years since it launched, Pratt said.

The platform’s initial client-facing benefits include the ability to: reach relevant audiences using search-based insights and custom ad groups; design, iterate and activate creative messages within the platform; customize and save multiple templates by brand and product; optimize all campaign elements; and build reports and boost performance against retail data such as household penetration and sales and unit lift.

Albertsons’ retail media arm, Albertsons Media Collective, last week debuted a preliminary framework to standardize operations across retail media networks.

Kroger is currently awaiting regulatory approval in its pending $24.6 billion acquisition of Albertsons. If approved, the mega-merger has the potential to create a massive retail media player. Pratt declined to comment on the future of KPM or what the business might look like in a post-merger landscape.

Kroger’s retail media offering is fueled by analytics from 84.51°, the grocer’s data science platform, as well as Kroger's shopper loyalty program.  

KPM data has shown that its on-site advertising is highly effective at driving product discovery for consumer-packaged goods brands, with 75% of targeted onsite display impressions and clicks coming from new-to-brand households. A quarter of those new shoppers became repeat purchasers, KPM said.

“Retail media works because of a strong core infrastructure, the core retailing aspect of it,” Pratt said. “That will always be a really important anchor point … I have no doubt that Kroger’s going to continue to be one of the leaders in this space. The understanding we have on consumer behavior to influence discovery and brand choice at scale is really special.”