“Everything has become performance”: Skai’s Michelle Urwin on the retail media revolution

Borne out of industry stalwart Kenshoo, omnichannel marketing platform Skai helps brands and agencies unlock insights, streamline execution and measure impact at scale across walled garden media. 

PMW sat down with Michelle Urwin, the platform’s VP of Marketing, to talk about the rise of retail media, accelerating customer journeys and the changing face of marketing teams…

Q. Retail media was arguably the biggest success story of 2022 in terms of performance marketing. Has that been your experience?  

“Absolutely. Retail media has been around forever – it's just referring to point of sale advertising. This used to refer solely to checkout displays and end points on a shopping aisle, like we still see in supermarkets today. That's why when retail media came into the digital world, a lot of brand shopper marketing teams were initially managing the channel, rather than digital media teams. Now it's matured with new formats and you see media teams are starting to get involved.”

Q. In terms of retail media, are there any key regional differences? Target Roundel and Walmart Connect are well established in the USA – where are the UK counterparts?

“The USA is certainly ahead of the UK in retail media. There's more mature retailers at this point. We've recently launched our partnership with Nectar360, which covers Sainsbury’s and Argos among others, and the brands we speak to are definitely ready for it. 

“It'll be interesting to see how retail media expands now that the channel is becoming established and there's the means to manage it in one place. Before, people were putting it off because of having to log into, for instance, 10 different systems! I think we'll see that change in 2023 and the growth in retail media will soon start to match the levels seen in the USA. 

“One of the things we are seeing is average order values going down. That’s reflective of how advertisers are behaving. They're pushing lower price products at the moment, through just knowing that consumers are choosing products that are cheaper, given the economic climate. That's significant in the UK right now.”

Q. Your role focuses on branding at Skai, but you have extensive experience on the pay-for-performance side of marketing. How do you see the ‘brand versus performance’ debate evolving in 2023?

“I think the biggest mistake we're making as marketers is trying to separate brand and performance. What I'm seeing within my role now is that you just can't split the two. Think about how success was measured years ago, when performance marketing started becoming a thing on Google. Marketers were judged on return of advertising spend (ROAS), cost-per-click and a number of other vanity metrics.

“In light of the current economic climate we're in at the moment, accountability is huge. If you look at Chief Marketing Officers now, some people in those roles are getting sacked if they're not delivering on performance. But historically, performance to those brands was return on investment (ROI).

“Now, if I meet my CFO and tell them; ‘we got X cost per click on this campaign’, or ‘we’ve got this ROI on this ad spend’, they won’t care. It’s ‘what opportunities has that generated’? ‘What sales have you made’? ‘What value has that customer click won to my business in the long term’?

The consumer can go from browsing something to buying in an instant – you can't separate brand channels from performance channels anymore.

“That's what we're starting to see now, especially with the kind of brands we work with. It’s that pressure and that accountability, and it's gone beyond those vanity metrics. Marketers now have to be responsible for proper business outcomes, whether that's revenue, lifetime value, new to brand consumers or their share in a category versus other competitors.

“That's where the distinction between brand and demand comes in, but it's much more blurred nowadays. The consumer can go from browsing something to buying in an instant – you can't separate brand channels from performance channels anymore.

“Take Amazon, which started off with sponsored search placements, but now look at what it’s doing around Thursday Night Football, the Sizmek acquisition and the partnerships with other offsite media. Walmart is doing the same with the Trade Desk, looking at these opportunities to expand.

“These are full funnel journeys. You can go from being targeted to buying in a second. TikTok is the same. I was on there the other day looking for eyeliner and two minutes later I bought it in five colours. It's just so easy nowadays with social commerce.” 

Q. Do you think performance and branding roles will change within agencies and brands over the next few years? 

“We've seen it already. We work with a lot of consumer goods’ brands, and a lot of agencies that service those brands. One of our clients – a large pharmaceutical company – has brought all of their media in-house because they want that control, by bringing in brand and demand together with somebody sitting across both functions. 

“We've seen the ‘Head of Omnichannel’ role pop up a lot more, and a new role: ‘Head of Connected Performance’. The word ‘connected’ doesn’t just mean across the channels; TV, e-commerce and everything else. They're talking about brand demand. 

“This role has risen up fast, especially in the agencies: Connected Performance, Connected Omnichannel, Connected Commerce. We are seeing whole new teams cropping up. 

“We did a webinar with HP, where they spoke about how retail media is moving into the upper funnel – brand awareness and consideration – rather than positioning it in the lower funnel – conversion – with the likes of sponsored search. They're actually restructuring their entire team around these new concepts.

That's the biggest mindset shift we're seeing: channel choice is becoming an afterthought, the consumer comes first. It’s about the insights that you need to actually to attract them in the first place.

“The brand team knows that it's all one customer. They need to service the customer, not the channel. That's the biggest mindset shift we're seeing: channel choice is becoming an afterthought. The consumer comes first. It’s about the insights you need to actually to attract them in the first place.

“What a lot of these big B2C brands are doing so well is they appeal to the nature of these consumer demands and then work out what role each channel plays, and how you can tailor your message and your creative.”

Q. Are there any other particular trends the marketing industry should be preparing for as we start 2023?

“I think this shift toward performance media is going to become even more pronounced. A lot of retailers are going to be rethinking how they can create a walled garden playbook so they can differentiate themselves.

“Everything has become ‘performance’. You just have to look at performance out-of-home,performance TV and performance audio – these are brand channels that have rebranded themselves to be performance because they recognise that that's where the money's going. All marketing needs to perform and we have to rethink what that looks like in this new age.”

Michelle Urwin is VP of Marketing at Skai