Report: UK retailers could generate £1.7bn from advertising

Tesco could be sitting on a potential £170m advertising revenue stream 

UK retailers are sitting on an untapped revenue stream from advertising that is potentially worth £1.7bn. The three largest UK retailers each stand to generate between £95m and £170m by tapping into it, according to a new report from Dunnhumby Media.

The figures were calculated using Dunnhumby Media’s Revenue Calculator, a tool that enables retailers to estimate their media revenue potential. It estimates that retailers have the opportunity to generate an additional 1 per cent of their retail sales with media, equivalent to £11bn across EMEA.

The report concludes that retailers can benefit from a virtuous circle consisting of rich data assets telling them where, when and how customers shop and what they buy; the ability to close the loop between media channels and in-store sales; and a more tailored approach to communication with new and repeat customers.

The exact monetisation potential by business depends upon a number of factors, such as a retailer’s data and technology maturity; the span of their media coverage across different domains; their multichannel presence’ the percentage of their sales that come from own label; and their willingness to give brands creative freedom in the advertising space.

According to the report, the top five UK retail businesses in terms of media revenue potential are Tesco (£170m); Sainsbury’s (£105m); Asda (£95m); Morrisons (£70m) and Co-op (£30m).

“As it stands, only a handful of retailers are taking on the role of publisher. And for them, it’s a smart move, as the media opportunity is a big one,” said Jérôme Cochet, Dunnhumby Media’s global managing director. “Just think of the data and insights generated by browsing and shopping behaviour when compared to the actual products bought, across all the media touch-points retailers own, in-store and online.

“Over time, more retailers will look to adopt this approach to remain competitive. Continued pressure on profits means retailers are feeling greater urgency about identifying new revenue streams, such as monetising their media assets. That said, retailers must take the right approach to doing this, otherwise they risk losing customers. Done correctly, it’s an opportunity to connect with consumers where and when it matters most – which ultimately is what every brand wants to do.”