Who is Rokt, the company driving e-commerce players' entry into retail media? [Rokt's Craig Garvin × Dentsu Group's Keigo Aoki]

Amidst a major turning point for digital advertising, including data privacy regulations and third-party cookie issues, "retail media"—where retailers and e-commerce businesses leverage their own first-party data to deliver ads—is gaining prominence. Particularly in the US, it is seen as a new revenue stream for major retailers and is attracting attention from advertisers and agencies alike.

Supporting this growth of retail media and assisting global entrants is Rokt, a leader in e-commerce technology. The company is now actively promoting e-commerce players' entry into retail media in the Japanese market, working to establish and expand its reach.

"What brands need to understand is the shift in consumer mindset and implement strategies based on what they truly desire. In today's era, it's essential to deliver ads that precisely match their interests and concerns at the exact moment their interest peaks," explains Keigo Aoki of the Dentsu Group, who has spearheaded the partnership with Rokt, outlining the rationale for collaborating with the company.

This article explores the importance of retail media strategy through a conversation between Mr. Aoki and Craig Garvin, Chief Revenue Officer at Rokt, who oversees global partnerships.

※This article is reprinted and edited from DIGIDAY.

 

Valuable advertising happens when the right timing, right place, and right person align

──Over the past few years, movements around data privacy regulations have intensified. How do you view the current state of digital advertising?

Aoki: I've been with the Dentsu Group for about 25 years, and over the past decade or so, I feel we've been confronted with a very significant question: "What constitutes optimal targeting in digital advertising?"

The "advertisement" product should inherently be highly beneficial for both advertisers and users. However, in today's digital advertising landscape, there is a clear disconnect between how publishers and advertisers perceive ads and how users receive them.

I believe the major challenge lies in finding a way to deliver ads correctly according to the sender's intent and have users receive them favorably.

Keigo Aoki / Executive Director, Dentsu Innovation Initiative, Dentsu Group. Since 2012, he has developed new value propositions for Japanese market customers through partnerships with leading international marketing technology companies. He first partnered with Rokt in 2017, and the collaboration continues to this day.

──Why is that? And what approaches could be considered?

Aoki: This isn't limited to digital, but I believe that to create the most valuable advertising situations, it's essential to accurately identify the "right timing, right place, right person." Missing this mark turns advertising into noise, not information.

Especially since the primary battleground for digital advertising—PC and mobile displays—is a very personal space. As a user myself, I feel that way too: I want information that's more optimized for me.

In response to this shift in user awareness, rather than forcing uniform information through the advertising format, it will become increasingly essential to deliver ads that align with a user's interests and concerns at moments when their receptivity to information is heightened. Alongside stricter privacy laws, discussions about "data privacy" in technology have become major topics. Regardless, I feel what we as marketers must grasp is the shift in user mindset. To respond to this change, we need technology and digital strategies that enable valuable information delivery for both advertisers and users.

Craig: I strongly agree. The key question is "Does it benefit the user?" The growing global interest in "retail media" stems precisely from this context.

Capturing the user's moment on e-commerce sites is crucial

Craig: A prime example of retail media is "e-commerce retail media," which uses e-commerce sites—the direct touchpoint with customers—as advertising platforms. When users are shopping, it means they have the intention to buy; it's a moment of heightened purchase intent. Simultaneously, effectively leveraging the first-party data retailers possess enables the identification and presentation of highly relevant ads to individual users. By aligning with the user's desire to buy and displaying information that offers them tangible benefits as advertising, the ad becomes more readily accepted.

At Rokt, we leverage the first-party data held by e-commerce businesses. At the final stage of the customer journey in e-commerce—the purchase completion screen, precisely when the user's purchasing intent is at its peak—we use machine learning to analyze shoppers in real time. This allows us to present highly relevant ads tailored to each individual consumer. This approach creates the moment when users develop a positive impression of the ad.

Aoki: In branding, there are concepts like "mental availability" (how easily a brand comes to mind) and "physical availability" (how easily a brand can be purchased), introduced by Byron Sharp, a professor of marketing science, in his books. By capturing the psychology and moments of users shopping on e-commerce sites, we can significantly boost "physical availability." Presenting ads at the right moment doesn't just build awareness; it creates opportunities for deeper user engagement with the brand, such as encouraging them to try a product.

For instance, I found it fascinating to hear that Rokt's ad formats perform well within pizza delivery apps. Think about it: when we order pizza, no one does so feeling sad. We order to enjoy a pleasant time with family or close friends. Presenting the optimal information (advertisement) during such uplifting moments significantly increases favorability toward the offer. This doesn't happen when purchasing everyday consumer goods like daily necessities.

The same applies to ticket sales. When you buy tickets for your favorite artist, that moment instantly fills you with excitement. Presenting an ad for discounted hotel stays near the concert venue at that point is naturally more likely to be accepted. Rokt enables advertisers to deliver information precisely when it can double the user's happiness.

──What are the market trends for retail media?

Craig: It's robust and accelerating. Ads that offer user benefits and are well-received inherently deliver higher advertising performance. This means significant advantages for consumers receiving optimal offers, retailers seeking ad revenue, and advertisers aiming for high ad effectiveness. It's a win-win-win advertising platform.

Globally, Amazon is a particularly powerful player in retail media, but Walmart is also rising. In Japan and elsewhere, retail media's influence is growing, with many businesses entering the space. If I were an advertiser looking to improve ad efficiency and ROI, I would definitely invest in retail media. This is a global trend, so I expect it to expand further.

Craig Garvin / Chief Revenue Officer, Rokt. Involved in the launch of Yahoo! Australia and New Zealand in 1997. Later founded a digital agency in Australia, serving major beverage and automotive manufacturers as clients. Joined Rokt in January 2022.

──What specific client challenges can Rokt particularly address?

Aoki: Currently, in advertising, channels beyond the four mass media outlets are called "below the line." Within this space, the major challenge is how to create value for customers through digital, OOH, and other channels. Rokt can provide value in addressing this.

Craig: Our strength lies first in the "optimal utilization of first-party data." Many companies don't fully recognize the potential and value of their own first-party data. Effectively leveraging this data allows businesses and organizations to improve UX, provide better services to users, and simultaneously generate advertising revenue without compromising brand value, contributing to improved profitability.

The current digital marketing industry requires conducting marketing activities while respecting user privacy, driven by movements prioritizing data privacy protection and restrictions on third-party cookie usage. By implementing Rokt, we enable a world where these challenges are appropriately addressed, ultimately serving the best interests of users, e-commerce businesses, and advertisers alike.

Expanding through digital retail entry, with a strong commitment to the Japanese market going forward

──Why did the Dentsu Group take notice of Rokt?

Aoki: We first learned about Rokt in 2017. An acquaintance introduced us, and we met with their representative. The concept was incredibly intriguing—content discovery advertising within retail. It presents the most relevant ads to users after they've completed some form of purchasing activity on an e-commerce site. This was a completely new approach, unlike anything seen in existing advertising channels.

At that time, Rokt was still in its infancy in Japan, focused on building its publisher network. We saw an opportunity to support our clients' growth even further by partnering with them right from that stage. So we formed a partnership and began assisting with business development. Rokt's publishers refer to "e-commerce sites," and we worked to develop major domestic e-commerce site operators through the Dentsu Group's network.

Craig: Ultimately, the key to any partnership boils down to trust. Of course, we have trust in the Dentsu Group itself, but the Group also has outstanding clients and partners. Advertisers and e-commerce site retail media operators place immense trust in the Dentsu Group, so being able to form a partnership with them is incredibly reassuring. We're still a relatively young company, founded about 10 years ago, so this partnership with the Dentsu Group is extremely important.

──How does Rokt reflect on its roughly 10-year journey?

Craig: We've seen significant shifts since founding. For instance, before the pandemic, we focused heavily on travel sites and entertainment ticketing. However, these industries were severely impacted by COVID-19. This prompted us to diversify into digital retail, which has enabled us to build partnerships with e-commerce sites across diverse industries and significantly expand our business.

Recently, our partnership with Uber Technologies Inc. (Uber) was a major milestone. This partnership has brought increased monetization opportunities at the point of purchase on Uber's website and mobile app. Uber has positioned advertising business growth as one of its strategic priorities, and we believe implementing Rokt has contributed to their revenue enhancement.

──What future developments do you envision for Japan?

Aoki: Within the Dentsu Group, a dedicated retail media project team has been formed, focusing on leveraging various data sources, including physical store data. For clients in the retail sector, demonstrating Rokt's key position while figuring out how to combine diverse media advertising strategies with Rokt's solutions to propose them as part of an overall marketing strategy is a major challenge for the Dentsu Group.

Rokt's solutions deliver not just concepts, but tangible results. This is the strongest selling point for e-commerce businesses and advertisers.

Furthermore, we believe that going forward, we can contribute case studies and know-how demonstrating how Rokt contributes to clients' businesses in Japan back to Rokt's global side as valuable insights. Enhancing Rokt's brand value globally is another area where the Dentsu Group can make a significant contribution.

Craig: We are now strongly committed to the Japanese market. While we have established a certain position in the US, in Japan we are at a stage looking ahead to significant expansion. We are, of course, strengthening our cooperative relationships with partners including the Dentsu Group, and we continue to invest further in our Japanese team and resources. Within this, we want to grow our product through trial and error into one that is well-received in the Japanese e-commerce market, and we want to make long-term, not short-term, investments together with each partner.

Aoki: Yes, we intend to continue collaborating to ensure significant growth in Japan, just as we have achieved in the United States.