5 minutes with Kroger’s Cara Pratt

Kroger’s Cara Pratt is on the front line of retail media innovation. In fact, she helped pioneer the concept of using retail data to help marketers get more strategic about connecting to their audiences. Retail media may be the hottest space in ad tech, but Pratt reminds us that it’s still young. And she is positively excited about how the space will mature.

There are plenty of jaw-dropping figures about the rise of retail media, but this one may sit among the top: By 2026, Emarketer projects that retail media ad spend in the U.S. will grow to just over $84 billion, which is almost a quarter (24%) of all U.S. media ad spending. Moreover, retail media ad dollars will exceed the spend for all traditional media channels combined. That includes linear TV, newspapers, radio and out-of-home. In short, it looks like the future.

Pratt spoke with The Current Editor-in-Chief Stephanie Paterik about how to leverage the retail media opportunity, leaning on business outcomes and being courageous in the ad space.

The following interview has been edited for length and clarity.

How do you stay current? How do you see what’s coming down the pike?

It’s an awesome question because if you’re planning for today, you’re going to be left behind. And so, it is one of those spaces where we have to have courage and commitment to take steps forward before other people. I’m a firm believer that to be one of the leaders in this space, you have to set the bar and you have to set a high bar for others to rise up to.

It’s a special opportunity and responsibility that we have. One of the anchor points that we build all of our planning around is consumer experiences. When we’re designing new experiences with the customer in mind, good things will happen. Good things for brands, good things for publishers and good things for retailers. The sales velocity that you can see through. [There are] good things for non-endemic brands, too, is what we’re learning.

There’s a fabulous quote from Winston Churchill that speaks to [the idea that] success is not final and failure is not fatal — it’s the courage to go on that counts. And that’s one of those spaces that really is front of mind for me.

If we are not courageous and not leaning forward, it’s okay to fail fast. We’ve got to learn. We’ve got to push the boundaries responsibly but do so [while] setting a really high bar. That’s what this industry deserves.

You mentioned accountability. What does that mean to you in the industry?

If you look historically from the very start, it was really anchored in business outcomes. Now it’s business outcomes and we can continue to layer on some other components, including sustainability within media, as an accountable and responsible commitment that we have.

One of the spaces that we’ve been exploring and committing to and learning and optimizing against is the carbon footprint of the ads that we’re deploying. In fact, we’ve been doing that work with Scope3.

When we’ve been deploying our campaigns, naturally, because we have the right audience and you can deploy fewer impressions, we’ve actualized 17% less carbon than the average U.S. ad campaign. And we’ve overlaid some extra optimizations against that. The latest runs were 37% less reduction in our ad campaigns on carbon.

So that is an extraordinary commitment that we think is very important as a complement to and a commitment on the actual business outcomes.

So if an impression is efficient, meaning the right ad goes to the right person at the right time in the right place, it can be sustainable.

Yes, and efficiency and effectiveness can coexist.

What’s the piece of innovation that you have your eye on and think is really going to change digital marketing?

It’s really an awesome time to reflect on the very young journey that retail media is in. And what we think is critically important is to distinctively separate retail media from retail data.

That is a component where retail media definitely can influence low-funnel retailers as publishers, but retail data can act more as a layer across channels, and that’s where the effectiveness and efficiency can come forward no matter where those dollars are being spent. And it goes back to that connection and audience as well.

Do you have an unpopular opinion about anything? Is there a misconception in the industry that you wish you could clear up?

Listen, I have for years talked about the vanity metrics that exist in this industry. There is no doubt that performance signals have to be at the forefront of measuring the impact of advertising. And that can play out in a really special way. The impact on audiences, the impact on creative, the impact on channel mix.

But we have to be looking at business outcomes. [We’re] building this puzzle piece to understand performance as a starting point. And how do business outcomes and sales velocity compare to household engagement? What is the correlation to attention metrics, which was the next layer of understanding? Are click-through rate and viewability good monikers into success?

The answer is no, there isn’t a sales correlation with high click-through rate. There isn’t a sales correlation with high viewability. We’re not even seeing a sales correlation to high attention metrics that are coming through. Now, is that another lens that organizations should be looking at? Sure, it’s just another KPI.

We’re all trying to change behavior, so we’re trying to move inspiration to activation and see those actions. We’re excited to continue to push the envelope there. And that’s what this industry needs. They need folks that are shining lights on challenging [the] myth-busting ways of the past.