How retail media is redefining audience engagement.

Transcript of the DMS Talk for further reading

Interview partners
Oliver Nitz (Moderator)
Christoph Truppe (Board Member & Head of the Retail Media Working Group, IAB Austria)

Oliver Nitz:
A very warm welcome to the DMS Talk. My name is Oliver Nitz, I am your moderator. Our topic today: The Point of Impact – how retail media is redefining contact with the target group.
I am pleased to welcome today’s guest Christoph Truppe from the IAB, the Interactive Advertising Bureau Austria, board member and head of the Retail Media working group. He should know – therefore a few questions for him today. I hope he can enlighten us a little.
Christoph, what does the IAB do?

Christoph Truppe:
Hello Oliver, thank you for the invitation. First of all: the IAB – Interactive Advertising Bureau – is the largest interest group representing the digital economy with a focus on communication in Austria. We have around 200 member companies in the association, across the entire market: agencies, advertisers, technical service providers and publishers.
We are an association that takes care of further developing the digital marketing market in Austria – with all its characteristics. This includes setting standards, providing orientation, offering education, building landscapes and thus creating a common basis for all market participants.
What distinguishes us to some extent is that we are also a global construct. The IAB exists in more than 40 countries. This enables very intensive exchange at European level, for example with London or our German sister association. This allows us to adapt international developments to the Austrian market.
This is also one reason why major players in digital marketing – Google and others – are members with us.

Oliver Nitz:
Since when has the Retail Media working group existed?

Christoph Truppe:
The Retail Media working group has existed since the beginning of 2020. That means it is still relatively young – just like the topic of retail media itself.
We are still in a very early phase, comparable to programmatic advertising around 2014. Back then there was also a sense of departure, many different perspectives on definitions and a joint struggle for understanding. I see today’s atmosphere as very similar.
In the working group we are a strong team of merchants, retailers, agencies and AdTech providers. Together we try to further develop the topic through different focal points and to map the ecosystem as completely as possible.

Oliver Nitz:
The market is growing – is that true? And if so, why?

Christoph Truppe:
Basically, one can orient oneself on the current advertising spendings study, which was published relatively recently. Absolute figures are still difficult, because the data basis is complex. But one can see the growth at least in percentages.
Retail media shows around 11 percent year-on-year growth in Austria.
At European level there are also figures that are collected regularly. However, one must consider that the Amazon share is always included. Depending on the forecast, this amounts to between 70 and 80 percent of the entire retail media pie.
If you subtract Amazon, what remains is a very dynamic market with strong growth, which develops differently depending on the country. Broken down to Austria, it is currently still not quite easy to obtain very concrete figures.
This is also part of our task: to create a shared market understanding and to be able to map reliable figures in the future.

Oliver Nitz:
How would you describe the current stage of development of the retail media market in Austria?

Christoph Truppe:
A lot is happening, a lot is developing. It is talked about a lot, it is present – but there are still relatively few really tangible cases.
This is also my clear call and one of our goals: to collect more cases and make them visible – across all media subcategories. There is definitely still room for expansion here.
I hope for companies that lead the way and share their experiences. There are already some very active players, but what exactly is happening and what is actually successful is often still not very well known.

Oliver Nitz:
Is this a strategic restraint by providers, not communicating too much?

Christoph Truppe:
I cannot ultimately judge that. I do see initiatives, campaigns and individual cases in all three subcategories – in-store, onsite and offsite.
What is still missing are the really large, holistic examples that show the full potential of retail media and inspire both advertisers and agencies.
Retail media is still a new or at least strongly evolving business field for many companies. Internally, many factors have to work together before one goes offensively public with it.
But I am convinced: time is on our side. We will see more – perhaps even dedicated marketing awards for this channel.

Oliver Nitz:
Could you please explain again the differences between onsite, in-store and offsite?

Christoph Truppe:
With pleasure. Onsite means advertising on a retailer’s digital channels – i.e. websites or apps. In-store refers to digital channels directly in the store, such as digital signage or in-store radio.
Offsite is the extension of these onsite campaigns via external channels using specific data. The goal is to make use of the particular strength of retail media – namely the purchase-affine target group – outside of one’s own platforms as well.
International examples show how retail data can be used, for example, in cooperations with TV or digital networks. Especially in smaller markets like Austria, this is a very exciting approach to build reach.
From my perspective, offsite is the area that is talked about the least, but which has enormous potential.

Oliver Nitz:
Which growth areas do you see in the next two years?

Christoph Truppe:
In-store will certainly continue to grow – there is a lot of demand for digital surfaces. Onsite will also grow, but at some point it will reach reach limits in the Austrian market.
That is why I see offsite as a particularly important growth area. A lot will still happen there, especially in combination with data, clean rooms and new technical solutions.

Oliver Nitz:
Where are currently the biggest challenges for the market?

Christoph Truppe:
Very clearly in education and standardization. There are many different definitions and understandings of what retail media is.
One of our core tasks at the IAB is to arrive at a common understanding here. For this purpose, we have published a glossary on our website, coordinated with European colleagues.
In the end it is not tremendously complicated – but one must agree on common foundations in order to let the market grow further.

Oliver Nitz:
You said earlier that retail media mainly takes place where purchase intent is high. Is that the main reason why brands advertise there?
Let’s take an example: I am in a supermarket or on a large retail website – and I am an insurance company or a mail-order retailer. Does it bring me more there than elsewhere, also measurably?

Christoph Truppe:
Here one has to distinguish between two groups: endemic and non-endemic customers.
For endemic customers – i.e. brands whose products are listed by the retailer – this is basically the business that retailers have always done. Keyword leaflet: am I placed correctly there or not?
For non-endemic customers it is more performance-driven. The big advantage there is that I can map the entire funnel – from first contact to completion – within one ecosystem.
I can bundle budgets, guide the user via visual anchors and lead them directly to purchase. For endemic customers this is extremely exciting.
For non-endemic customers the purchase-affine effect may be lower or differently structured, but even there one can, with imagination, certainly create meaningful use cases. For example: “If you are interested in this product, you might also be interested in this insurance.”
In the end there must be a logical connection that benefits the user, the advertiser and the retailer alike – not simply additional advertising pressure.

Oliver Nitz:
Was the topic of in-store audio or in-store radio already on your agenda? That is, audio as a marketable channel – also thought programmatically?

Christoph Truppe:
Yes, absolutely. That in-store audio is a marketable channel is beyond question. It has fundamentally existed for a very long time – keyword in-store radio or announcements. What is new above all is the digital, data-driven further development.
From a technical point of view, the programmatic marketing of audio is no longer a major challenge today. There are already providers in the market who enable exactly that or are working on it. The question is less whether it works, but how it is used meaningfully.
It becomes particularly exciting in combination: audio in connection with screens, with contextual signals and with data. This is known from the classic digital audio space – for example from web radio, streaming services or podcasts.
This logic can be transferred very well to the in-store area. You reach the same brands, the same target groups – but directly at the point of sale.
Of course, the question of reach, measurability and plannability also arises here. In Austria this is – as with many retail media formats – still a matter of scaling. But fundamentally, I consider in-store audio to be a very exciting building block within the retail media ecosystem.
Precisely because audio can be very well combined with visual contacts, an additional lever of impact is created here.

Oliver Nitz:
Do you see retailers providing data to their suppliers in the in-store area – for example on sales effects due to advertising? Or is that more of a black box?

Christoph Truppe:
This is a very sensitive area, because it involves highly relevant data sets. That must be stated clearly.
Internationally, one knows some large examples where this is handled very transparently. At the German sister association BVDW, for example, there is an exciting definition around incremental uplift.
Internationally, the focus is shifting strongly toward incremental growth: what additional value does advertising bring – beyond what would have happened anyway?
This is often measured via A/B tests: one group is advertised to, the other is not. This allows external effects to be better isolated.
In Austria we are still a step away from that, but the goal is clear.

Oliver Nitz:
Who, in your view, is driving innovation in the market more strongly – agencies or providers?

Christoph Truppe:
Both. Media agencies say: we have clients who want to do retail media, but do not know exactly where.
That is why we build, among other things, landscapes to provide orientation. We will publish an update of our retail media landscape in the first half of the year in order to make the relevant players in the different categories visible.
At the same time, retailers are also driving the topic strongly. In our working group, for example, MediaMarkt and the REWE Group are very actively represented.
I would like to see even more retailers get involved in the future. One can see very clearly that where internal structures have been created, innovation and growth are possible.

Oliver Nitz:
How important is the integration of contextual signals – such as weather, time of day or location – from your perspective?

Christoph Truppe:
Let’s start with the CPM: yes, contextual signals usually lead to a surcharge, because they create relevance. And relevance is always associated with added value.
From a digital perspective, contextualization is not something special, but standard. Weather, time windows, situational relevance – this has existed in online marketing for years.
In out-of-home advertising and in-store, however, one has to weigh how deep one goes, because it is also a reach medium. Too strong fragmentation can be counterproductive.
But there are numerous examples – also in Austria – where time and context control are used very sensibly, for example for coffee, food or seasonal products.

Oliver Nitz:
Is the market overall moving away from TV toward posters, digital out of home and retail media?

Christoph Truppe:
I see this more as a shift within the moving image space. TV will continue to be consumed – just differently, also via streaming or mobile devices.
At the same time, out-of-home advertising in Austria is traditionally very strong. The digitization of these surfaces is growing, currently at around three percent according to the Momentum study.
In other countries this growth is significantly higher. That shows that there is still a lot of potential here.

Oliver Nitz:
What concrete role does programmatic play in Austria?

Christoph Truppe:
Programmatic is essentially a software and booking infrastructure. It enables flexible, data-driven campaign control.
There is a shift from direct bookings toward programmatic approaches – but both have their justification. Some formats or stagings work better directly.
However, for campaigns with contextual signals, longer durations or high flexibility, programmatic is an absolute necessity.

Oliver Nitz:
Does this change the role of media agencies?

Christoph Truppe:
Not fundamentally. Retail media and digital out of home are additional channels within the customer journey.
Agencies continue to advise their clients along this journey and integrate retail media where it makes sense.
The distinguishing feature lies in the detailed work and strategic planning – not in a completely new role distribution.

Oliver Nitz:
What next steps is the IAB planning to further advance retail media?

Christoph Truppe:
A central topic is standards. Together with European partners, we have already defined in-store standards for Austria, which are publicly available on our website.
These standards are a voluntary self-commitment and are continuously being further developed. Feedback is explicitly welcome.
In the long term, we are also considering certifications. In addition, we are working on further expanding the retail media landscape and on collecting valid market figures in the future.
Retail media is strongly data-driven. A feedback channel – that is, measurability from first contact to sales – is essential.

Oliver Nitz:
Thank you very much, Christoph, for the conversation and the insights.
Further DMS Talks can be found on our website at:
digitale-medien.at/dms-talk

Christoph Truppe:
Thank you. Thank you for the invitation.

Oliver Nitz:
Thank you for watching – see you next time.