Author: Mitchell Parton

This story was first published by Digiday sibling Modern Retail

Retail media is becoming increasingly critical to one of the nation’s largest grocery chains.

Profit for the Kroger Precision Marketing advertising business grew 24% in the second quarter, according to Kroger’s latest financial earnings release. This marks the company’s best retail media profit growth since 2021, CEO Greg Foran told investors on a conference call Friday morning. Media monetization grew 88 basis points over the past year, Foran said. Meanwhile, e-commerce sales grew 20%, marking the second consecutive quarter of profitable e-commerce growth, the company said.

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Marketers are catching on that AI doesn’t rank their brands, it decides whether it gets brought up at all. That shift is already reshaping how the industry works. The Interactive Advertising Bureau (IAB) has been assembling a framework meant to standardize how that visibility even gets measured since there’s no agreed baseline for what good data collection looks — like let alone what actually drives a recommendation.

Inside companies, the uncertainty is showing up in headcount. Heads of AI search are getting hired because the honest answer right now is that nobody quite knows how this works yet. And some brands aren’t waiting for anyone to figure it out. They’ve started moving ad budgets around specifically to shape how a chatbot describes them when asked.

Reddit’s sudden drop in ChatGPT recommendations shows why brands are moving on all these fronts at once, not waiting to see which one matters most. 

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