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Kroger is Also Building an Advertising Business
By: Digiday
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Amazon’s advertising business is worth at least $1 billion, and Walmart has a growing advertising platform, too. Kroger, one of the biggest grocery brands in the U.S., is also venturing into retail media. Kroger is selling its suppliers ad units and solutions, and it is developing a programmatic platform that will go live next year.

Kroger, which owns the likes of Harris Teeter, Baker’s and Fred Meyer Jewelers, generated $27.7 billion in sales from July to September of this year, up 4.5 percent from the same period a year prior, according its quarterly earnings report released in November. Approximately half of all U.S. households have a Kroger loyalty card, which drives nearly 90 percent of Kroger’s sales, according to the company. Like Walmart, Kroger boasts that its loyalty program data and purchase data gathered from its mobile apps, brand websites and around 2,800 stores across 35 states in the U.S. can help its suppliers (mostly consumer packaged goods companies like Procter & Gamble) serve targeted ads on Kroger’s properties and the open web.

Kroger’s sales pitch may sound familiar, as mass retailers like Amazon and Walmart all use their consumer purchase data as the cornerstone to carve out a media business. But different from Amazon, which has an in-house media division called Amazon Marketing Group, and Walmart, whose media platform was largely built by WPP-owned Triad Retail Media (which also creates ad units to sell for other retailers), Kroger bought the data analytics piece of agency Dunnhumby (formerly a joint venture between Kroger and Tesco) around three years ago to form its own consumer insights subsidiary called 84.51°.

“CPG brands today are splitting their marketing spend between trade and advertising. Trade promotion is one of the industry’s largest investments — this is promotional dollars to influence brick-and-mortar sale pricing like temporary price reductions,” said Cara Pratt, vp of customer communications product strategy and innovation for 84.51°. “CPGs shift their marketing budgets across vehicles — many of which deliver against different business objectives, but all are intended to [generate] sales. Our science and Kroger’s customer insights help CPG brands drive actions.”




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This article was published on Digiday.com.  A full link to the original piece is after the story. www.digiday.com
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