Unveiling the Unique Data-Driven Approach of Kroger Precision Marketing

In a recent episode of the Commerce Collective podcast hosted by Flywheel, Emma Irwin sat down with Jill Smith, the VP of Advertising Sales for Kroger Precision Marketing (KPM), to delve into the distinctive strategies and advancements in offsite and programmatic advertising within the grocery retail landscape.

Here are six takeaways from their insightful conversation:

1. Personalized Data-Driven Marketing

KPM leverages Kroger's long-standing loyalty card program, enabling them to create highly relevant and effective advertising campaigns. With this full view of in-store sales, KPM brings a robust dataset to advertisers.

“This positions the dataset to be scalable in its purest form,” Smith said. “We do not have to model anything, and the data is updated as of yesterday. It's because of this trusted value exchange that Kroger has with its customers that allows us to use this data from a media perspective.”

2. Integration of Data Science and Media

KPM's unique organizational structure—as Kroger’s media arm situated within the data science subsidiary 84.51°—allows for seamless integration of data analytics and advertising strategies. This fusion enables KPM to offer sophisticated audience segmentation and measurement capabilities, setting them apart in the retail media landscape.

“It really is unique, sitting among all these data scientists—I am learning so much every single day,” Smith said. “But as this retail media industry advances and measurement becomes more sophisticated, and more important, it is, in my opinion, our secret sauce and we are incredibly lucky to have them.”

3. Offsite and Programmatic Advancements

Through partnerships with platforms like Pinterest, Roku, Pandora, and Hulu, KPM extends its advertising reach beyond Kroger's owned and operated sites. By overlaying Kroger's first-party audiences onto these platforms, advertisers can efficiently reach relevant households and measure the impact of their campaigns, resulting in significant returns on ad spend.

“We can be very prescriptive about the audience these brands want to speak to and reach,” Smith said. KPM’s purpose is to make people's lives easier, “and that means that as a Kroger customer, however they're consuming media, we want that to be a personalized experience—whether they're shopping in our stores, or on our websites, or watching a platform like Roku.”

4. Eliminating Ad Waste and Enhancing User Experience

KPM is committed to reducing ad waste by delivering personalized ad experiences tailored to consumer preferences. By leveraging data insights, KPM ensures that advertisements resonate with consumers, leading to improved campaign effectiveness and enhanced user experiences across various digital platforms.

“In 2023, we were able to analyze thousands of our campaigns,” Smith said. “On average, we saw an 11x return on ad spend when you are participating in one of KPM’s programs. I'm really proud of that, because it means that these advanced audiences are working and we're able to prove that through measurement.”

5. Focus on Sustainability

KPM is pioneering efforts to track and reduce carbon emissions associated with its advertising operations, demonstrating a commitment to environmental responsibility. By partnering with Scope3 to monitor carbon emissions through managed service offerings, KPM aims to contribute to a more sustainable advertising ecosystem.

“I look forward to the day where we expand this program into self-service and get a true understanding of the carbon footprint,” Smith said.

6. Future Vision

Looking ahead, KPM aims to further refine its audience capabilities and enhance user experiences while prioritizing environmental sustainability. With a focus on eliminating wasted ad impressions and expanding carbon emission tracking, KPM will continue serving as a leader in responsible and effective retail media advertising.

Jill Smith's insights shed light on the innovative strategies and initiatives driving Kroger Precision Marketing's success in the dynamic world of data-driven advertising. By harnessing the power of personalized data, forging strategic partnerships, and prioritizing sustainability, KPM continues to redefine the retail media landscape and deliver impactful advertising solutions for brands.

Listen to the full interview here.