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09/06/2022

CSA Exclusive: Kroger Precision Marketing connects brands to shoppers

Dan Berthiaume
Senior Editor, Technology
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Cara Pratt
Cara Pratt, senior VP, Kroger Precision Marketing (KPM)

The Kroger Co. wants its CPG partners and its customers to know each other – in the right way.

Chain Store Age recently spoke with Cara Pratt, senior VP, Kroger Precision Marketing (KPM), about KPM’s mission and how it provides benefits to both advertisers and customers.

KPM is the retail media business of Kroger, supported by the grocer’s 84.51° data analytics subsidiary. The network features nearly 2,000 participating brands, with Pratt leading a team of data scientists using 45 machine-learning models tapping purchase data from 60 million households. KPM has delivered an average 25%-30% household penetration lift and 35%-40% sales lift on campaigns, according to Kroger analysis.

[Read more: Kroger Precision Marketing gives shoppers ads they want]

When asked what general benefits retail media networks offer retailers and customers, Pratt said there are two distinct areas where benefits are provided.

“First, retailer media networks provide visibility into customer behavior over time,” said Pratt. “In the case of Kroger, we capture 96% of all transactions.”

As a result, Pratt said Kroger can let advertisers deliver the right promotions for the right products at the right time in a customer’s shopping journey, benefiting both brand and shopper.

“You can advertise without waste, on property and off, continuing (digitally) with the customer at home and seamlessly influencing their purchase,” explained Pratt.

In addition, Pratt said retail media networks provide advertisers with the ability to increase the effectiveness of their media spend by letting them learn more details about customer preferences and behaviors.

According to Pratt, 84.51° launched KPM with straightforward goals in mind.

“We simply wanted to focus on making CPG advertisements more effective,” she stated. “KPM is designed to remove the opaqueness to understand the performative nature of ad spend. Customers drive change, and standards for media change accordingly.”

Leveraging KPM, Kroger enables its CPG partners to target customers both in its brick-and-mortar stores and online properties, as well as across major content platforms such as Pinterest and Roku connected TV. In addition, KPM offers a private programmatic advertising marketplace, known as the Kroger Private Marketplace, which allows advertising agencies and CPG brands to target consumers by applying Kroger audience data to programmatic campaigns within their preferred ad-buying platform.

“KPM makes CPG ads more efficient,” stated Pratt. “It inherently makes shopping easier for the customer.”

Since its initial launch in fall 2017, Pratt says KPM’s largest achievements have been in two key areas.

KPM is raising expectations for media capability,” said Pratt. “Across the buy and sell sides we can shape understanding and provide visibility into ROI. Last year, over 2,000 brands worked with KPM at a retention rate of 90%. KPM is driving change in the industry because brands are seeing a real impact on their business.”

In addition, Pratt cited KPM’s role in transforming audience targeting and the measurement of advertising performance statistics. This includes providing information such as after viewing an ad whether a customer made a purchase or spent more than they had before seeing the ad. 

“We’re sharpening the pencil,” she said. “KPM has direct relationships with major publishers like Meta.”

Looking ahead, Pratt said that KPM will create an opportunity for CPG companies to create influence across more media touchpoints.

“Where does a consumer spend time?” asked Pratt. “KPM will support media in those channels and will provide advertisers a share of those touchpoints.”

In addition, Pratt said KPM will continue partnering with other appropriate entities to support its advertising flywheel.

“Across the buy and sell sides, we want to provide advertisers a sharper understanding of what happens on customer contact and provide visibility into ROI,” she said.