Retail Media

Disney and Kroger just inked a major retail media partnership

Kroger's first-party data will provide insights for advertisers on Hulu, such as PepsiCo.

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The advertising arms of Disney and Kroger are combining retail media and streaming inventory in an effort to expand opportunities for brands to effectively reach audiences, and measure the impact of advertising on sales.

The news: Disney Advertising and Kroger Precision Marketing are launching a collaboration that will make first-party data from the Kroger retail media arm available to advertisers for targeting and measurement on streaming TV platforms in Disney’s portfolio. The limited beta test will start with Hulu, and a select group of CPGs are being invited to participate. The program is expected to roll out to the general public in the second half of 2023.

What are the benefits? The companies said this collaboration combines data science capabilities from Kroger Precision Marketing with Disney’s capabilities to provide premium inventory on its streaming platforms that reaches consumers on their couch, just like traditional TV. Specifically, the partnership is focusing in three areas:

Audience: The combination of Disney’s audience graph and data from 60 million annual households shopping at Kroger will “create efficiency and improve KPI’s through purchase-based data science,” the companies said.

Content: Advertisers will be able to reach people while they view news, sports and entertainment programming across streaming platforms. Alongside Hulu, the company’s portfolio includes Disney+ and ESPN, so there's room to make an even bigger impact as the program expands.

Measurement: With Kroger Precision Marketing data, brands can measure whether advertising helped lead to a sale. This allows them to “close the loop” between an advertising campaign and a sale, the companies said. In particular, advertisers will receive data on retail sales, household penetration and segment level insights.

Key quote from Lisa Valentino, EVP of client solutions and addressable enablement at Disney Advertising: “While the industry is focused on identifying alternative currencies, Disney is doubling down on driving real-world results for brand clients each and every day. The unrivaled reach of Disney, amplified through retail media insights from one of America’s leading grocers, results in a better experience for both viewers and advertisers, and actionable results for our clients.”

What it means

Streaming + retail media: While retail media is typically associated with on-platform advertising at grocers’ websites, the first-party data that powers it can also be valuable for advertising that takes place beyond a marketplace. Streaming, known as CTV in advertising circles, holds the promise of becoming a powerful new advertising force by combining the mass appeal of TV advertising with measurement and targeting capabilities of digital advertising. Retail media is helping to boost the latter with data accessed directly from purchases and loyalty programs. This partnership comes after Kroger Precision Marketing initially expanded into CTV in September 2022 with the addition of inventory to its programmatic marketplace.

Power in partnership: Retail media and CTV are both still in early days. This initiative shows how collaboration between companies can help to solve key problems that will promote growth of both spaces. In this case, Kroger Precision Marketing is bringing data and measurement capabilities that can help to enhance Disney’s nascent advertising offering. It's worth noting that when it comes to grocery and entertainment, these are two giants of their respective spaces. “As consumers spend more time with streaming TV, it is increasingly important for industry providers and advertisers to work together to bring innovative solutions like this to the marketplace,” said Carol Simpson, Sr. Director of Shopper Marketing at PepsiCo, which was the first advertiser to work with the companies.

Hulu out front: Hulu was an early mover on CTV advertising, having introduced an ad-supported tier back when it launched in 2007. According to Statista, the platform maintained 22% of CTV market share in 2022. Now, Disney+ and other platforms such as Netflix are introducing their own ad plans. Hulu has the existing reach and inventory to prove out what works in a nascent area such as the introduction of retail media. At Disney, learnings can then apply to other platforms.

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