Shopper marketing has had a hard time shaking the impression that it's only about what happens in-store, though programs in the field use a variety of ways to reach consumers. But the rapid and sustained growth of Triad Retail Media -- which does relatively little of its work in-store and mainly revolves around selling brands ads on retailer websites -- may help put that notion to rest for good.
Triad expects to sell $120 million of online display ads this year for retail partners that include Walmart.com, SamsClub.com, CVS.com, RiteAid.com, ToysRUs.com, Dell.com, 1800Flowers.com, BarnesandNoble.com and, most recently, eBay. And CEO Greg Murtagh expects the overall online display advertising market on retailer sites to hit $500 million within a few years.
By way of comparison, that $120 million is equivalent to what Johnson & Johnson, Unilever, Coca-Cola Co., L'Oreal and Colgate-Palmolive Co. spent combined on all measured internet display advertising last year, according to Kantar Media.
About 80% of Triad revenue comes from such consumer package-goods marketers, Mr. Murtagh said. The rest comes from a host of other industries, such as insurance companies looking to reach shoppers at eBay Motors to sell car insurance.
Triad, founded in 2004, now has 285 employees and sits squarely in the middle of the two fastest-growing movements in packaged goods -- digital and shopper marketing. As such, Mr. Murtagh said he expects sales to rise 40% this year, about double the pace of digital advertising spending overall.
"The whole idea behind Triad is to help retailers leverage the traffic they get to their website and basically turn them into publishers where they can establish IAB-standard ad units and create packages to offer media agencies and brands," Mr. Murtagh said.
Retailers weren't even thinking about their sites this way in 2004, he said. Now, increasingly they are, be they retailers Triad represents or those, like Target and Walgreens, that it doesn't. The money retailers make, he said, tends to go to support their own marketing spending -- though nothing prevents them from taking it straight to the bottom line.
Like other shopper-marketing propositions, just about everyone on one of Triad's retailer sites is shopping for something. But it's not exactly a digital version of in-store advertising, because consumers at those sites aren't necessarily there to buy right away.
Take Walmart.com. It had about 36 million unique visitors in June, according to ComScore, compared to 95 million for Amazon. That's similar to the roughly 1-to-3 ratio the two have long had. But Walmart last year had only $4.1 billion in online sales, according to Internet Retailer magazine, compared to more than $35 billion for Amazon -- a ratio of more like 1-9. A big part of that difference is product research consumers do at Walmart.com before shopping in a store.
So Triad's proposition is a lot like the "Zero Moment of Truth" concept Jim Lecinski, managing director U.S. service and sales at Google, has been pushing through talks and his recently published "ZMOT" book -- that people go online and use search before buying, even for CPG products, be it online or in store. Mr. Murtagh fully agrees and said he sees his relationship with Google as symbiotic, as Triad is a substantial buyer of Google search aimed at steering people toward its retail websites.
Another perhaps non-intuitive take on what Triad does in shopper marketing comes with one of its newer programs -- eBay. While it may be associated with hard-core auction lovers, 70% of eBay's sales are via the "Buy It Now" option, Mr. Murtagh said. And while eBay ads target shoppers, they often target them in a cross-merchandising effort. So, for example, people shopping eBay for baby strollers may see ads for diaper brands.
In a similar way, ads on Walmart.com aren't necessarily linked to products people are searching for. When Walmart last week launched its new effort to link its Vudu streaming-video rental service directly to Walmart.com, an advertiser on the page for video rentals was Procter & Gamble Co.'s Crest 3D White, a brand that also targets beauty-conscious consumers across a wide variety of other entertainment-focused media.
Triad's revenue streams come about evenly from traditional trade marketing budgets, shopper marketing budgets and standard brand media budgets, Mr. Murtagh said, with 25 sales reps now in Manhattan dedicated solely to media agencies.
And there's one big difference between the money a marketer might spend on its trade funds to buy space in a store circular from a retailer and the money spent to buy space on a retailer's website via Triad. The money spent on Triad, he said, can be represented as a marketing expenditure under current U.S. accounting rules, he said. The money spent on the store circular needs to be accounted for as a reduction of net sales -- generally seen as less desirable in financial statement as it both depresses the topline and doesn't show up as a brand investment.
Ads on retailer websites look to be doing better, at least from a growth perspective, than ads on in-store TV networks. Players in the latter space are privately held or don't break out revenue separately. But analysis of financial statements of Technicolor, the French company whose PRN unit handles Walmart's in-store network in addition to several others, suggests PRN's total revenue has never topped $250 million and has been falling in recent years. After trying to sell PRN the past two years but getting no satisfactory bids, Technicolor took the unit off the market earlier this year.
"All the research I was ever privy to suggests that shoppers do not go to stores to watch TV," said Ann Mooney, a former P&G shopper marketing executive and now principal of Rising Moon Consulting, Cincinnati. Shoppers tend to see in-store TV as just more clutter, she said, and the messages at best work in short sports or as static billboard-style ads.
But she said shoppers do appear more receptive to online display ads at retailer websites, which come at a time when they're gathering information and making lists even if they're not buying right away. "When you think about it, you have to be there on some of these big retailer sites, because of the traffic," Ms. Mooney said. "Triad was able to help retailers figure out how much that traffic was worth."