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News Analysis 27 May 2020 - 3 min read

'The prospects have never been better': Cartology's Mike Tyquin eyes TV as retail media takes off globally

By Josh McDonnell - Senior Writer

In the 12 months since joining Woolworths' in-house media unit, Cartology, MD Mike Tyquin says it's ready to prove the value of retail media, taking lessons from North American players including Wal-Mart, Amazon and Target, and moving on the FMCG ad dollars that go to "legacy media like TV".

What you need to know:

  • In the last 12-months Cartology has rolled out its suite of retail media assets spanning e-commerce, digital screens, publishing and audio
  • MD Mike Tyquin says the division of Woolworths Group has spent that time taking learnings from the growth of the booming retailer media sector in the US.
  • Australian market adoption is still a "watch this space" scenario, as Cartology tries to simplify communications between clients directly and media agencies.
  • The business has hired its own agency sales team, while also building out its trade marketing capabilities.
  • Cartology sees the advertising pool among FMCG, Liquor, general merchandising and household goods categories to be worth close to $3bn by FY 2023.
  • Not willing to comment on the previous quoted $100m in high-margin revenue being written by the former MediaHub business within Woolies, Tyquin says Cartology is in a good position to eat into the FMCG ad share held by "legacy media".
  • Even with the COVID-19 pandemic bringing a new wave of consumers through the Woolies business, Tyquin says the supermarket's website was already the most heavily searched online platform in Australia for FMCG goods.
  • During a seven-week period over March – April Woolworths saw 62 million visits to the website and app, 2.6 million views of recipe pages and 162 million page-turns of the digital catalogue.
  • Use of the Woolworths App is up 320%, driven by the digital catalogue, planning a physical shop and online shopping itself.


The rise of retail media

In the US, retail giants Wal-Mart, Amazon, Target and Kroger have all rapidly ramped up their respective retail media businesses and holding groups have begun to recognise its value, setting up dedicated hubs to manage the buy-side.

Despite this, pundits have been quick to call out Australia for its less than swift inclusion of retail assets in the media mix.

For Cartology Managing Director and former outdoor executive Mike Tyquin, it's still a "watch this space" situation when it comes to Woolworths' retail media business and generating similar levels of ad spend.

However, he says the difference between Cartology's offering and other major international players is the variety of assets within its portfolio that create a wider omnichannel experience for clients.

"The US market's fairly advanced with Wal-Mart, Kroger, which is the second-largest grocery retailer in the world, and Target which all have a very substantial retail media operations," Tyquin told Mi3. "What's a little different about those businesses to ours is that they don't actually operate in the store environment, they're almost exclusively digital, whereas our model is omnichannel."

"Obviously, we all know what Amazon's doing in terms of the scale of its global advertising business, so the prospects for retail media have never been better and we believe very firmly that retail media companies are the future."

Tyquin says Cartology is leading the way in the sector and believes the division has the capability to be a "market maker" for brands looking to drive a closer relationship with consumers.

He says for clients and agencies, retail media is providing a richer understanding of customer behaviour through its first-party data, collected over multiple touchpoints in both a physical and digital environment.

"The idea that there's a vibrant retail media industry globally is a really good thing and we're clearly leading the charge here in Australia," he says. "We've got great insights through our first-party customer relationships that are very longstanding, the trust in our business that we have with customers and the clear proximities that we've got to brand."

"When it comes to Amazon in Australia, they're taking a different approach with a marketplace model whereas we are going to continue leading the charge with the omnichannel strategy we've developed."


Shoplifting TV ad spend

Tyquin is confident that the growth of retail media and the multi-asset portfolio of Cartology will see the business begin to take FMCG ad dollars out of the pockets of "legacy media".

He expects FMCG, liquor, general merchandising and household goods ad spend to reach $3bn by FY23, of which Cartology will begin to snare a significant share of during that time.

With "high ambitions", Tyquin says one of the main media channels he thinks Cartology can disrupt is TV, which he says accounts for roughly 70% of those key retail category's  media spend.

"I would argue that retail media has a stronger proposition than any of the other legacy media for a share of that $3bn by FY23," Tyquin says. "TV at the moment is holding about 70 percent of FMCG advertisers."

"l argue that the audience and the insights we can deliver to on our platforms, and engagement we can provide through multiple touchpoints, creates a superior proposition to what is currently available on television."

Despite having a strong digital presence prior to the COVID-19 outbreak - the Woolworth's website is the most searched digital platform for FMCG goods - Tyquin says the growth in online customer base will give the business a strong point of difference compared to other media channels.

Traffic to the Woolworths website has more than doubled and during a seven-week period over March - April Woolworths saw 62 million visits to the website and app, 2.6 million views of recipe pages and 162 million page-turns of the digital catalogue.

Even with its digital audience is growing, Tyquin says the business isn't going to see "any amelioration or degradation" of its physical audience, adding that Woolworths will hold a "very privileged position" to work with brands in bringing a "complete omnichannel picture to life".

"We don't have many of our major clients, particularly national ones, who aren't more interested than they were in digital and e-commerce compared to how they were in February," he says. "Sure, we've seen a massive reduction in consumer wallet but we've also seen nondiscretionary spend more than hold up, not just as a percentage of wallet, but in absolute terms. So what that's meant in practical terms is for a lot of FMCG and liquor brands is that they've acquired a lot of customers."

"I haven't spoken to anyone yet on the brand side who isn't interested in retaining those customers post COVID-19."


Navigating the client-agency relationship 

Tyquin says a major focus for the business will also be around building stronger agency relationships, as retail media continues to mirror international trends and become part of the holding groups' media strategies.

Acknowledging that Cartology has a wide range of assets that, at times, cross several agency media silos from digital to outdoor and publishing, the business has opted to add a dedicated agency team to work alongside its existing vertical sales team.

Joining the team are Jessica Hunter as Head of Agency Partnerships, Steve Geelan as Head of Product and Platform, Jodie Koning as Head of Marketing and Insights and Sean Richardson as Senior Manager of Client Strategy. 

"Since last year, we've been developing our vertical sales team with a direct to brand sales team that really came out of the old media business but what you'll see increasingly from us over the next couple of months is adding more to the brand and agency teams to compliment that trade vertical sale, which will really help," Tyquin says.

"What we're trying to do is simplify our entire portfolio to suit any brand or client. We're very conscious of the fact that our clients are the brands themselves, however we recognize that there's a capability that those brands also innately rely on which is provided through their agency. We're trying to bridge that."

Tyquin says for some of the products that Cartology is bringing forward, such as its 955 digital screen network, it will be opportune to engage with agencies.

He says the focus will be trying to make it simple in but says there'll still be some overlap between the teams.

"We've got some clients at the moment who are, you know, reasonably emphatic that they'd like to manage the whole relationship directly with us. And we'll absolutely accommodate those views," Tyquin says "And we've got others who've given us a pretty strong standard that they'd like some or all of those new platforms to be worked through in partnership with us and their respective agencies."

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Josh McDonnell

Senior Writer

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