Retailers may be missing out on a multi-million dollar opportunity to boost revenue, writes Jonathan Hopkins.
If I told you that the value of a two-week campaign using in-store digital screens and your website’s homepage was worth A$500,000, would that make you rethink how you use those channels?
If I added that you could also use these same platforms to promote not just your business, but that of partner businesses by leveraging your customer’s attention and thereby generating a new revenue stream, would that be enough to make you rethink your owned media assets entirely?
Well, it should!
Over the past 20 years we have witnessed a seismic shift in the media landscape. During this shift, online retailer Amazon, social media network Facebook and search engine Google have emerged as the largest media owners in the world, eclipsing traditional media owners of TV, print, radio and outdoor.
If you look at Australia’s top 100 websites, there are more retailers than traditional media owners, proving that businesses are indeed the new media owners.
Understanding your owned media
Owned media channels are grossly undervalued by retailers in three ways:
- They are not seen as ecosystems that drive customer acquisition and advocacy
- The data offered by these media channels is not being fully harnessed
- They should be used to generate revenue by accepting advertising from vendors
Leveraging owned media for your own brand
In the US, fast food chain McDonalds has been reaping the rewards of a three-year investment in building owned media channels like digital screens, digital menu boards, a mobile app and leveraging customer data.
The strategy appears to be paying off in spades. According to the CMO, McDonald’s is seeing a 5x lift in engagement and restaurant visits from its owned media channels versus results from paid media.
Personalised marketing programs in owned media channels had phenomenal results for UK supermarket Sainsbury’s. Visits were up 8.2 per cent and sales 6.6 per cent over a campaign period where all messages were delivered via owned media channels like email, mobile messages, app alerts and in-store WiFi beacons. Perhaps most noteworthy of all: sales growth was delivered with zero investment in paid media.
Closer to home, we have seen CBA leverage their ATM network to get honest responses from their customers, Telstra leveraged their phone box network, Coles leveraged their stores and trucks to promote their brand, Myer created ice-rinks in their stores to attract customers and Caltex launched their Socceroos partnership through their petrol network.
Leveraging your owned media with partner brands
There is a rising wave of organisations that recognise the immense value of their own media platforms for the vendors they represent. Ecommerce giants Amazon and eBay are leading the way but aggregator retailers and grocery businesses all around the world are leveraging their data and customer attention with huge financial rewards.
The fastest growing division in Amazon is not its e-commerce sales, or its services like Prime, but its media sales division. According to research firm EMarketer Inc, revenues have more than doubled from A$1.8 billion in 2017 to A$4.6 billion in 2018.
And this was before Amazon’s disparate media divisions were centralised into one unit, which Wall Street firm SG Coven estimates could generate ad sales revenue of US$24.8 billion (A$36 billion) in five years’ time.
I’m not suggesting every business should start its own media unit but the fact is, owned media leverage represents a very real opportunity for many Australian businesses to unlock enormous levels of revenue. Let’s be honest, in the current retail climate, you don’t hear the words “new revenue opportunities” very often!
Look out for many more examples of smart retailers leveraging their customer’s attention.
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