Head of Ocado Ads Jack Johnson on bringing ‘agile ethos’ to retail media

Last week, Ocado Retail launched a new retail media network, Ocado Ads. The offering is notable for arriving fully formed, with ‘full funnel’ options including off-site media and custom audiences; a self-serve platform, powered by Zitcha; access to Ocado’s insight platform, Beet (already in use for buyers and suppliers); and a new product development lab providing test-and-learn for brands.

We chatted to Jack Johnson, Head of Ocado Ads, to dig in to a bit more of the detail around familiar challenges in retail media, such as supply and demand, targeting and making it all work for the customer.

Econsultancy: Ocado only sells online, and it’s known as an innovative tech company – are these advantages when approaching a challenge such as retail media?

Jack Johnson: Totally. When we originally were asking ourselves, ‘What does Ocado Ads want to stand for?’ – we started with what Ocado’s been famous for; …being a disruptor, changing the way people shop. We wanted to take… that DNA and apply it to the advertising industry.

And I think there’s some structural benefits we get from being online only. We don’t rely on loyalty cards for data collection, which is beneficial for us given a lot of our competition will have a lot of [incomplete first-party data], because they’ll lose it to purchases that don’t have a loyalty card swipe associated with it. So, there’s a data collection piece. There’s also a piece around agility and us being really flexible. For example, some of the work we do on NPD (new product development), we can list and test things very quickly with our brand partners, whereas to do any testing in a store environment, you’ve got to wait for a range window, it’s got to be a ‘one in, one out’.

…we can list and test things very quickly with our brand partners, whereas to do any testing in a store environment, you’ve got to wait for a range window…

There are really complex processes that are associated with a listing. So, we have some structural ways that we can be the most agile and flexible retail media network. We can change things on our site really quickly. We have this disruptor/agile ethos within the business and that’s permeated into our retail media business, which is a bit of an antidote to the rigidness, maybe, of our bigger competition that are scaling a very set way of working.

You’ve been doing retail media for a little while, but now you’ve got this newly launched RMN and offering, how has your team changed?

The important distinction of how we’re doing retail media is we’re an in-house retail media network. We do it ourselves. So the Ocado Ads team sits as part of our broader commercial function and plays a role obviously in all the retail media that we do, but also with a really clear link [to the] customer team, to make sure that everything we’re doing is in line with what we want to be doing with customer experience. That’s a really important connection because retail media is only at its best when delivering against, not just commercial objectives, but customer objectives, as well.

We’ve been doing… transformational work internally to make sure that we have a dedicated retail media team inside Ocado. And that’s involved bringing in the right sort of media expertise, media planning experience, people with media buying backgrounds… and actually bringing a skill set and experience set that we’ve never really had before within our business. [That includes] people with major agency backgrounds, so that we really understand how the big holding companies are facing into the retail media challenge, and people that have worked brand side and actually are, or have been, facing into the proliferation of retail media networks in the market.

…retail media is only at its best when delivering against, not just commercial objectives, but customer objectives, as well.

We want to be taking into account the changing nature of the advertising ecosystem. And that means we need to be bringing people in with different backgrounds.

How does being exclusively online impact the supply and demand of inventory?

The demand is interesting because we have the biggest range within the UK because of our online-only operating model. We operate with between 40 and 50,000 SKUs, which is well over twice as big as a large [brick and mortar] store. So, with more SKUs, more brands, comes more suppliers, which gives you this interesting dynamic of a lot more competition.

Especially when you start to think about some of our higher traffic areas such as homepage, top offers pages, all of the inventory that we know we’re getting a lot of eyeballs on, actually, we have a really broad spectrum of demand. So from a demand perspective, we have to think slightly differently and make sure that we’re also delivering that customer objective of showcasing our range and not just pricing out the medium and smaller brands. We want to make sure we have an operating model that ensures that they get equal opportunity to grow with us and that we can deliver visibility of our smaller brands to customers.

Where I see the real benefit of that 100% complete customer data is in the world of audience extension.

And then from a supply perspective, that’s where we work really heavily with Ocado Group, who co-own us with M&S, on having the right ad inventory on site, [and on the] roadmap for our digital retail media to make sure that we’re always optimizing the amount of inventory that we have for brands to tap into.

And what can power all that is amazing data and insights… Where I see the real benefit of that 100% complete customer data is in the world of audience extension. So, using first party data, the insight we have on those customers, to paint a picture of their shopping habits, which someone can then use for targeting through Meta or Tradedesk or other off-site platforms. Because, especially when you think about our champion customers that are shopping week in, week out – we’re covering all of their purchasing, so if they lapse from a certain category, the chances are they have lapsed from that category, versus having gone and shopped somewhere else. So, we have this really robust seed data that we can use for a much broader set of advertising use cases, not just on-site activation. We’re really excited about that space.

How have you developed your self-serve insights platform in the past few months?

There has been a lot of development on our shopper insights platform, which is called Beet – that has all of our aggregated sales and customer insights and is a one-stop shop for our brands to really understand how they’re performing on Ocado. Interestingly, that’s the same platform that we then deliver internally, so buyers see the same dashboards as suppliers do, which really helps from a collaboration standpoint and helps save a lot of time.

[Outside of Beet] we’re also looking at audience insights… to give advertisers the ability to create an audience, based off behavioral data – so, our customer that has lapsed from a certain category – and then run really bespoke insights on that audience, rather than your aggregated brand insights. So, [we could ask], ‘What, does a lapsed soft drink shopper look like? What are their shopping habits and where else are they shopping?’ And that type of insight can then really power an activation strategy.

So, we’re thinking about insights on those two different planes. One is our shopper insights platform and second is the self-serve audience insights [that] I think a lot of advertisers, specifically major agencies, are really interested in.

You mentioned the customer experience watchout earlier. How do you ensure you are delivering for the customer, as well as the advertiser?

Yeah, I guess it’s the crux of how a lot of retail media networks are working with their retail partners, whether they’re external or internal. I completely understand why it can be a challenge (to prioritise the customer), but for me, it is [also] the opportunity. When you can create value for customer experience, for brands and advertisers and for the retailer… that’s the secret sauce – it’s a win-win-win in my perspective. When you see retail media done well, it’s because advertisers are willing to commit spend, the advertising itself is effective, and the reason it’s effective is because customers and the people at the end of the ad are actually engaging with it. If you can align those three stakeholders, I think you’re in for a bit of a winner.

I see the role of a retail media team [to be] negotiating with parts of the business to make sure we get to a common interest…

The challenge you’ll always find is when potentially people approach retail media from one of those perspectives too much. I think sometimes that can happen from a commercial perspective when you see the ad spend and you want to optimize for spend, but you forget about what that means for a customer going through their journey on Ocado, and that’s really problematic.

And actually, I see the role of a retail media team [to be] negotiating with parts of the business to make sure we get to a common interest that delivers value to advertisers, Ocado and to customers.

This interview has been lightly edited and condensed.