How Ahold Delhaize Creates Custom Retail Media Plans Using Social Media and CTV

While it might not be a household name in most American homes, Ahold Delhaize USA is one of the biggest grocery players in the country. Based in the Netherlands, parent company Ahold Delhaize has a presence in Indonesia and Europe as well as the U.S. Ahold Delhaize USA has about 2,000 stores between Georgia and Maine with six brands—Food Lion, The Giant Company, Giant Foods, Hannaford, Martin’s, and Stop and Shop—that are well-known to East Coasters. Since its launch in early 2023, senior vice president Bobby Watts has been leading AD Retail Media, as the company’s commerce media business is called. With a background in merchandising, he brings experience from all sides of the retailer to the company’s ad network—aiming to create more customizable media plans for all advertising partners. This conversation has been edited for clarity and brevity. ADWEEK: One of the main motivations for building an ad network into a retailer is that it creates an opportunity for higher margins than a traditional retail business. How is retail media driving revenue for Ahold Delhaize? Bobby Watts: The revenue is definitely at a higher margin. For us, it's about how to leverage that—not as a tax against our CPG partners, or even our agency partners—but to reinvest in the overall customer experience. You'll never hear me say to a CPG, “Hey, I need you to hit this dollar bucket, because it's a dictated mandate.” It's more about solution selling, and being able to sit down with CPG partners and understand business problems, and then build campaigns and approaches to solve them. Those dollars do come in at a higher margin for us as a retailer, but they should be growing the business and fueling investment. We’ve heard a lot about the internal challenges that retailers face when building out a retail media business because the goals of the RMN can sometimes conflict with—and overlap with—the merchandising and sales teams. How is Ahold Delhaize navigating those organizational challenges? Those are natural growing pains. I came from the merchandising world—I was a category manager, building a traditional category plan and strategy. Retail media is just not traditionally what you would think about when you're building a plan. It's usually around the big things like, "Do I have an in-store display, price reductions, or something in the print circular?" Those are the tried and true ways of driving growth and volume for partners. With retail media, as an omnichannel retailer, there are so many more things that you can do to surround sound the things that you're doing inside of your category business plans or your category strategies. What I've experienced isn't resistance or internal conflict around the belief in retail media, it's more about needing to educate folks on the power of retail media, our first-party data, and the measurement capabilities we have to show proof and performance around the things that we're doing to drive their business. Whether that's incremental sales, return on ad spend, or new buyers for their category or their brands, those are powerful metrics that can really help drive business for a category leader. People often talk about retail media ‘collapsing the marketing funnel.’ And while that’s a buzzy statement, it poses measurement challenges. How is Ahold Delhaize approaching measurement and metrics to ensure that you have the right tools for advertisers? On the collapse of the funnel, we don't talk about it that way. Retail media has gotten put into a box as a lower-funnel, conversion-only type of program, but you are bringing a ton of channels together in a media plan: off-site display, social media, CTV, digital, out-of-home, in-store, and onsite. That's a complex media plan to sit down and build, making sure that delivers on the business objectives of the client. We can sit down and build those full-funnel programs so that you have consistency in messaging. To come around to measurement, that's also the conundrum. In most cases, those channels aren't connected, and in some cases, if you're talking about social media with walled gardens, you're not able to really effectively measure them in your own world. When we think about measurement solutions, how do we bring together a more unified view of measurement? And then how do we think about things differently from a KPI standpoint? Beyond incremental ROAS, can we start talking about lifetime value? What does it mean to create that stickiness with the shopper because we reached them upper funnel, and we have a cadence of upper-funnel tactics that are talking to them? We're a member of the IAB. We're fully supportive of transparency, and we are part of the digital out-of-home IAB committee. How do we make sure that there are real standards that everybody can rally around right now? There are so many different ways people are spinning numbers and it creates a ton of confusion in the marketplace. How is Ahold-Delhaize working to differentiate itself in an increasingly crowded RMN landscape? We offer a very broad spectrum of channels that folks can activate across that path to purchase. The point of differentiation is making sure that we can sit down and do that through a category joint business planning conversation, delivering on the joint needs of the great local brands or the CPG brands that we serve. Tying the category planning and the media planning together—that's the secret sauce because that's when you see the best performance from the media. Do you currently have a specific pitch to advertisers that don’t sell product on your shelves, also known as non-endemic advertisers? We just stood up in January of 2023, so we're a year-and-a-half old. We definitely talk about the non-endemic space, but it's not someplace I'm running to. It's a bit of a slow burn. We partnered with Rokt for post-checkout non-endemic inventory, and that's our non-endemic play right now. We have considered other things around data partnerships, but there's more foundational stuff I would like to solve first. How is Ahold Delhaize investing in in-store ad placements? In-store is where it all started. What's old is new again, and the only difference is you get to put a digital spin on it now. We think about it in two ways. First, through our native mobile app, and how to engage consumers when they're in our stores. The second piece, which we expanded to over 100 stores this month, is leveraging existing screens and hardware that we have in stores to create category adjacent campaigns where we can run video advertising. We have another proof of concept that we're going to be kicking off soon around more strategic areas within a store footprint that we might consider, whether that's pharmacy, entry points, or checkout. My sister brands in Europe at Albert Heijn do a great job in this space, so we have a lot we can take from what they've done in Europe. But then also, non-competitively, Hy-Vee has done a ton of work recently with Samsung. We have a lot we can take from others, and then also stuff that we'll learn on our own. We definitely believe in-store is the next frontier for us as well—going back in store, and doing it through digital engagement.

Retail Media Networks

How Ahold Delhaize Creates Custom Retail Media Plans Using Social Media and CTV

SVP Bobby Watts argues that retail media does more than 'collapse the marketing funnel'

Kathryn Lundstrom

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Kathryn Lundstrom