Dive Brief:
- Albertsons, owner of Safeway and other grocery chains, is collaborating with Quotient Technology to introduce a service for brands to track the impact online ads have on store sales, according to CNBC.
- So far, 60 consumer companies have signed up for the program called Albertsons Performance Media. The grocer reports that the return on investment by the major brands that have taken part is three times that of other, similar programs
- This is the most recent drive by Albertsons to update the digital side of its business. Last summer, it acquired meal kit company Plated, and has expanded its partnership with e-commerce service Instacart.
Dive Insight:
Albertsons’ new service to help brands track the real impact of digital ads on sales seems like a natural step forward for the grocer/manufacturer relationship. The supermarket chain has the advanced capabilities to compare ad views to shopper’s verified purchases. According to the company, Albertson’s already has 30 million verified buyers whose purchase habits they can track.
By targeting ads to buyers, Albertsons says they can drive product sampling, which could turn shoppers into repeat buyers of a new product. The technology would apply to the grocery chains 2,300 stores in 35 states.
If this model is successful for Albertsons, expect to see other digitally advanced grocery chains start to offer a similar service. Amazon currently offers their own version of the program, called the Amazon Advertising Platform. With 20 years of consumer purchase data to play with, the online giant can offer impressive insight to brands willing to pay for the service.
As for Albertsons, it makes sense for brands to utilize the service being offered. Digital ads can eat up a sizable portion of an advertising budget, often without affirmation that money spent is resulting in increased purchases.
Case in point: Procter & Gamble cut $140 million in digital ad spending in early 2017, and still reported a 2% growth rate the following quarter. It’s no small wonder that other companies may be wondering just how much of an impact digital ads really have on sales.
There is no word on how much the grocer is charging for their services, but if successful, it could turn into a profitable revenue stream. If food manufacturers see the investment resulting in increased sales, this could become a new standard operating procedure and cost.
If that happens, expect competing markets to quickly develop programs of their own. This appears to be a pilot program exclusive to Albertsons right now, but that doesn’t mean other grocery chains aren’t in the process of developing a similar service. As more shoppers turn to their phones instead of the Sunday paper to see what’s on sale at the market, expect interest in correlating digital ads to sales only to rise.