What you need to know:

• Village Cinema is pushing into retailer media, it's claiming a "global first" for an entertainment company.
• Zitcha, the Australian retailer media platform whose customer roster includes Coles Liquor Group, Adore Beauty and The Warehouse Group is providing the tech.
• The deal means Village's 20-plus commercial partners can leverage its loyalty data and target cinemagoers on Village's social media channels.
• The retail media offering will be managed in-house and separately to onscreen advertising sales, which is handled by Val Morgan.
• Village plans to expand its retail media business to more of its own channels in future – but cinema advertising is out of scope. 

Village Cinemas is pushing into retailer media, using loyalty data from a million-plus Vrewards members to enable advertisers to target them initially on its social media channels – Meta and Google – before expanding the action across its own channels.

Australian owned retailer media platform Zitcha, started by Hatched co-founder Jack Byrne and former The Pistol CEO, Troy Townsend, is powering the play. The two parties are claiming a "world first" in bringing an entertainment firm into retail media, a category forecast by WPP-owned GroupM to take US$126bn in ad dollars globally this year and eclipse TV spend within five years.

A big chunk of that money is being hoovered up by the likes of Amazon, with US retailers such as Walmart and Target also building huge retail media networks, leveraging shopper and loyalty data to sell media both across the own networks and power targeted buys across other channels. Tesco is the dominant player in the UK. Locally, Woolworths' Cartology has made the early running in the grocery category with Coles now playing catch-up. There are a number of smaller players across liquor, cosmetics, health and beauty and white goods, with other retailers predicted to enter the fray within the next 12 months. Now cinema has joined the party.

Gold rush

It may be a stretch to think of an entertainment business as a retail media player, but Village Cinema chief commercial officer Nic Robin said the core ingredients – a large first party data set, loyalty operation, a ticketing channel via its website, strong IP from movies and a screens business – align to selling data-powered media across its owned channels. 

“We have a lot of stickiness to our category, working with some of the biggest brands in the world. With that rich data set, and also the media channels that we possess across digital – an EDM, website, or even on-premise digital screens – we see there's a massive opportunity for us to play in the retail media space,” said Robin.

He said the move the move is a natural extension to its ad business, because it means commercial partners can better connect with its customers outside of its physical properties.

For example, a brand advertising alongside the new Barbie movie could now target individuals from a certain demographic on Village Cinema social media assets, running Facebook ads adjacent to that content. Matching cinemagoers to certain movie genres, and even where they sit inside a cinema, such as Gold class, suggesting higher disposable income, sharpens targeting capability.

Village Cinemas has upwards of 20 commercial partners across insurance, telco, energy and entertainment categories. It also works closely with entertainment brands such as Disney, Sony and Paramount given its status as a core distribution channel.

The retailer media aspect will be automated and packaged both as an add-on to existing commercial packages to those partners, as well as a standalone product to new partners.

The retail media business will be managed in-house. Val Morgan, which handles on-screen advertising will not be involved nor impacted by the retailer media aspect.

"Massive" gains?

Robin would not be drawn on the size of the commercial opportunity to its own business and partners, but reiterated the cinema operator views it as “massive”.

The move to expand its data-powered ad business aims to capitalise on recent momentum as cinema rebuilds following a pandemic collapse. Major studios are rethinking their streaming approaches and returning to a cinema-first strategy while locally multiple Australian box office records have been broken post-Covid.

Those factors are being reflected in ad growth, with spend up 6.6. per cent in the first five months of 2023. against a challenging economic backdrop for the broader market.

However, there remains a revenue-audience gap: Robin said ticket sales remain 20 per cent below pre-Covid levels, because there are circa 22 per cent fewer movies coming out versus 2019.

Hence the move into retailer media – or commerce media, per Zitcha chief revenue officer, Nick Hinsley.

CDP-powered commerce

Hinsley knows the company well from his time at Lexer, where Village was an early user of the Lexer CDP, which he says is a key enabler of the firm's push into retailer/commerce media.

Zitcha was founded two years ago before breaking cover last year following a $4.9 seed round led by Australian VC OIF Ventures. It connects retailers owned channels – email, apps, digital in-store screens, websites and social media – to buyers and automates the transaction and counts Adore Beauty and New Zealand’s largest retail group, The Warehouse Group among its customers. Hinsley claimed the business will likely sign its first North American customer in the next few days, and is also close to closing business in Columbia.

On describing the retail media opportunity for Village's partners, Hinsley said: “A typical flow from brief to execution might be that a telco says to Village, 'we want to target women with kids aged 35 to 56 that live within a 5km radius of the cinema'.

"Village has the ability to query its Lexer CDP, create the segment, then push that segment as an audience to Facebook Business Manager for example, as a custom audience. Then the telco can utilise its Facebook handle to target that audience.”

He said there are also some unique aspects for Village as a cinema operator down the track, given its broader media assets. But he agreed that retailer media is not always the most apt description.

“Typical retail media is where an ad is seen and the transaction takes place on the advertiser's site. Arguably in this instance it is called commerce media, where the telco is advertising through Village's account but the transaction might actually not take place on Village's website. If it’s Paramount Pictures advertising their latest blockbuster, the purpose is to drive transactions on their website, which is true retail media."

Either way, he suggested, the broader market is starting to grasp the value of their data and owned assets.

Find out what you need to know about retailer media and what's next via Mi3's 74-page report. In-depth interviews with 25-plus marketers, retailers, platforms, agencies and analysts provide cross-industry insight. Download it here.