Kroger Precision Marketing (KPM)
Kroger Precision Marketing officially launched in the fall of 2017. Dedicated new KPM teams were still being formed as of late spring. The new structure consolidates Kroger’s ad platforms under the KPM banner while seeking to expand and improve targeting capabilities through the use of first-party data. Kroger and its 84.51 subsidiary are now partnering to enable digital advertising for suppliers on Kroger’s digital properties, including Kroger.com and its other banner sites, the retailer’s mobile app and Kroger emails. New products enable suppliers to communicate directly with Kroger shoppers using 84.51 targeting and personalization science.
- Targeted digital coupons on the banner sites and the mobile app with customizable offer values and coupon types.
- Targeted email modules within Kroger multi-subject emails that reach 11 million-plus customers weekly.
- Banner website ad placement: An ad block on the Kroger.com department pages in which ads will be personalized using 84.51 science.
- Banner website brand pages: Dedicated brand pages (e.g., Kroger.com/“SupplierName”) as a place to showcase brand content and serve as a destination for other media.
- Sponsored product recommendations on banner.com and the mobile app within search or any product carousels (e.g., Start My List).
Keys to Success
Be prepared for budgeting challenges. As a more integrated entity than previous Kroger ad platforms, KPM stands to impact how marketers budget funds for shopper programs. “This may now be a challenge for marketers, as they may now need to shift funding to dedicate marketing efforts to a specific retailer, thus losing some control,” says Steve Abdo, senior vice president of client services and Kroger team leader at Epsilon Catapult.
KPM could put further pressure on manufacturers to break down traditional silos by blurring the lines between trade, shopper and media spending. “The up side is that, from Kroger’s point of view, I can talk to your shoppers in a more intimate way and tell you whether or not they bought,” says Abdo.
Rebecca Campbell, who oversees digital and e-commerce programs as shopper marketing manager at Hormel, says that it’s important for marketers to communicate KPM’s capabilities internally to get buy-in on various programs, particularly if shopper funds now have to be redirected from national marketing budgets.
“You have to be able to think more holistically about working with Kroger, but you also have to understand the value of all the individual assets and levers that you can pull,” says Campbell. “We’re putting significant resources behind KPM so we are going to work very hard to make sure it succeeds.”
Test, learn and adjust KPIs. Since many of the tools under KPM are new, marketers may need to establish new parameters for measuring campaign performance and ROI. Campbell says she has been using a white board during planning sessions with KPM to outline all of the permutations of available tactics. She is going into programs from a vantage point of needing to “test, learn and adjust” to figure out what works best for different brand initiatives.
For example, to drive trial for a new product launch under the Herdez salsa brand, Hormel is using several KPM tools to target a specific subset of households within the Kroger shopper base. “We wanted to come at this from several different angles,” says Campbell. “We’ve been going back and forth with KPM to figure out the best ways to build awareness and drive traffic to Kroger.”
Marketers should think broadly about their return on investment from KPM programs, adds Abdo. “A lot of this activity can’t be judged solely on a two-week sales lift because we’re building more brand equity with some of these tools. Programs are going longer. Spending should be viewed through a broader lens and ROI metrics adjusted for each scenario – whether it’s a digital coupon informing Kroger shoppers about a product improvement through a targeted email module or driving them to a brand page with recipe content.”
Stay engaged as new tools are introduced. Kroger has been frequently updating its KPM portfolio and will likely introduce new tools in the weeks and months ahead. Its latest offering, boosted search within Kroger.com, was unveiled in June and described as follows:
“Brands will have the ability to promote their online assortment with Product Listing Ads (PLAs) through the KPM platform by balancing cost-per-click bid pricing, customer relevancy and in-flight performance optimization. Native product integration will take SKUs appearing within search results, or within relevant categories, and feature them in high visibility slots for the customer.”
CPG brands, particularly those in commoditized categories, may find value in tools like boosted search and brand pages on Kroger.com as a way to stay top of mind with consumers. The brand page offering is a one-time cost for the year and allows the marketer to refresh the page up to four times per year. “It makes sense for the marketer with a portfolio of brands that wants to change things up seasonally or deliver content such as recipes for an always-on play,” says Abdo.
Campbell says that it has been challenging to keep pace in the new environment but sees the ongoing evolution with KPM as an opportunity to build deeper relationships with Kroger. “Things are evolving very quickly. It is literally changing by the day.”