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Retail data is entering the upfronts as measurement gets more important

Movie theater with curtain and seats and a hand reaching out from the curtains holding a yellow shopping bag.

Illustration by Reagan Hicks / Getty / Shutterstock / The Current

The topic of retail data is becoming bigger in media buyers’ conversations this upfront season, according to industry experts who spoke with The Current.

The impetus comes from a marketplace that is much more focused on full-loop measurement from reach to conversion. Streaming has made inroads into the upfronts in recent years as advertisers have allocated more budget to streaming platforms, and audiences have shifted their viewing habits from linear TV to streaming.

“Because now TV has got the metrics and the history as a performance medium, advertisers want this worked into the discussion and the negotiation,” Sean Cunningham, CEO of the Video Advertising Bureau, the industry trade organization representing TV networks, tells The Current. “They want provisions and allowances as part of an overall master deal.”

The combination of connected TV (CTV) and verified buying data from retailers is the secret sauce behind this surging interest. Advertisers and publishers are already seizing the opportunity, which is already shaping the future of identity and authentication.

“If you take premium content like we have at Disney and then you pair it with retail media data, the advertiser’s going to win,” Jamie Power, Disney Advertising’s SVP of addressable sales, said at the Forward ’24 event hosted by The Trade Desk.

The numbers back up this emerging combination. After forecasting in August of 2023 that retail media CTV ad spend for 2024 would be $1.5 billion, almost double from 2023, eMarketer moved that projection up months later to approximately $3.6 billion.

The projections may paint a bright future overall, with eMarketer anticipating retail media CTV buys to potentially be over $8.6 billion by 2027.

“This is the future I think of TV advertising,” eMarketer’s Vice President and Principal Analyst Andrew Lipsman said in a webinar.

And it’s not just measurement that advertisers are getting. In-theater advertising firm National CineMedia (NCM) is guaranteeing business outcomes for the first time as part of its upfront offer, Digiday reports. If advertisers’ goals aren’t met, NCM will give extra ad inventory to satisfy them. This isn’t the first case of a network guaranteeing business outcomes — A&E Networks has done it since 2018.

Why now?

While this isn’t the first year advertisers are focused on measurement during the upfronts, Cunningham said upfront conversations about end-to-end conversion will be at an all-time high.

He says another driver is more companies adopting measurement currencies from companies like iSpot, VideoAmp and Comscore, which are trying to take share from Nielsen. Last year, Warner Bros. Discovery named VideoAmp and iSpot as its official currency partners, and NBCUniversal added Comscore as its official partner for all local advertising.

Agencies, brands, retailers and networks have been experimenting with streaming retail data partnerships increasingly over the past year. Disney and Kroger have teamed up, along with Walmart partnering with NBCUniversal and Paramount, among others.

Retailers are looking for brands that will test and learn with these partnerships, according to Dalia Youssefi, The Mars Agency’s VP of retail media and data strategy. Youssefi adds that streaming is becoming a bigger part of briefs, with brands or media planners making it a bigger part of the package because it’s more accessible and mainstream now.

Another catalyst for this focus on retail media’s power is Amazon, says Lee Dunbar, SVP and head of retail media at the agency Starcom. He believes retail data’s prominence in the upfronts this year is coming from Amazon launching its ad-supported option this year and making its debut upfront presentation. That level of scale, inventory and data is enough to grab attention, says Dunbar.

Identity comes into focus

The future of identity is a key part to this conversation as well. Advertisers can serve ads using retail data to the right audience of authenticated viewers. Cunningham says we are moving from a world based on demographics to one with identity in focus, as audience-based buying takes a bigger share.

Having an authenticated audience is proving more valuable for brands, as evidenced by this recent example from Red Baron Pizza, Roku and Kroger Precision Marketing. Red Baron Pizza saw a 9.1% total uplift in household penetration and estimated a $3.3 million add in lifetime value for the brand after matching Roku ad exposure data with Kroger Precision Marketing’s sales data.

“Retail data is one amazing path to leverage...That’s something that’s really critical for the future,” Unilever’s Head of U.S. Media Investment and Partnerships Aaron Sobol said at Forward ’24.

That identity is gaining more prominence is another evolution of what the upfronts have become. The technology that the TV networks offer, from Disney’s tech showcase, to NBCUniversal’s One24 tech conference, are important to advertisers. The upfronts have historically been the place to premiere what could be networks’ next big-hit show, but now technology is also becoming another thing to showcase.

As retail media embeds itself more into the upfronts, which hark back to the early 1960s, there is potential for much more on the horizon.

“In five years’ time, I can’t even imagine where we’re going to be because I look back at the last five years and [retail media’s] just blown up. Things are growing at such a pace, it blows my mind,” Youssefi tells The Current.

The Current is owned and operated by The Trade Desk Inc.