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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Part 2 - The Silo Demon
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[00:00:00] Kiri: Hello, and welcome back to Retail Media Breakfast Club. Listen, the biggest threats to retail media this year aren't external. They're not AI, they're not agentic traffic or disintermediation. They are internal.
[00:00:14] There are three [00:00:15] structural problems that the industry has been avoiding, and here to talk with me about number two, the silo demon, is Anne Hallock, VP of Americas at Miracle Ads. [00:00:30] Welcome back, Anne.
[00:00:31] Anne: Kiri, I feel like we're going to perform some kind of exorcism. Are we, are we releasing the demons?
[00:00:38] Kiri: I believe that, you know, it's, it's not what people ask for, but what, what the people really need.
[00:00:43]
[00:00:44] Kiri: Well, [00:00:45] last week we talked about the demons inside of retail media, not the external threats, but the things that we need to exorcize from within retail media. First of all, the growth demon, the expectation of sky-high growth year [00:01:00] after year. It's coming home to roost, but a lot of the challenges that our retail media networks face is internal and alignment there around what is the job of the retail media, uh, entity within the comp- within the organization?
[00:01:13] Now we're gonna talk about [00:01:15] silos. So retail media was built as an ad sales function with a separate team, often siloed off from merchandising and marketing and finance. The structure made sense as a bolt-on, but it doesn't make sense now that the retail media [00:01:30] infrastructure is often actually the part of the company that is the most modern and the most tech-forward.
[00:01:38] So this is a really interesting angle I think because, uh, it's something that you and I, and [00:01:45] we heard a lot while we were in Miami for Possible and the DRUM Commerce Media Forum. Talk a little bit about, how retail media infrastructure is often being asked to serve other [00:02:00] parts of a retailer's organization.
[00:02:02] Anne: Kiri, I'm really thrilled by this one, and this is a topic that I think you and I are going to look back on maybe a year from now and be astonished by how much changes in the next [00:02:15] 12 months, genuinely.
[00:02:16] Kiri: Here's hoping.
[00:02:17] Anne: We were at Possible Miami a couple of weeks ago. We were at this DRUM event, Commerce Media Summit.
[00:02:23] So we were in the room with... It was probably about 60 people, but it was really, it was leadership. It was leadership at the [00:02:30] brand level. It was leadership at the technology level. And then you had retail media leaders sitting in the room, many of them- Mm ... some slightly competitive to each other- Mm-hmm ... uh, whether, whether personally or professionally.
[00:02:44] Um, [00:02:45] and we got to host a couple different round tables, and something started to emerge, and I don't know who we're giving credit for the term mad tech. I certainly did not invent it. Um- Love it ... but someone started talking about the convergence of marketing- [00:03:00] Technology and advertising technology. So they're calling it Mad Tech, which I find adorable.
[00:03:06] Um- Love it ... and in fact, Lisa Valentino had given a keynote the first morning of the conference- Mm ... where she talked about how really it, it sounds [00:03:15] as though her purview has expanded quite a bit. And I don't know if that's true or if it was that way all along and we just didn't see those surface areas for the Best Buy Ads business.
[00:03:25] But one, I think she's just a, a world-class leader, and I, I find her a [00:03:30] very fascinating subject for what she has done to really pull Best Buy Ads forward. There's a lot of, again, different surface areas that they've created that I, I find very compelling. But two We were on that, that group chat together later in the week at Adweek [00:03:45] House where she was talking about how because of the fact that the ads business has had to keep a very modern tech stack, and thanks to the fact that they're a profit center- Yeah
[00:03:56] they have been able to fund that sort of [00:04:00] next generation bleeding edge type technology. Right. Whereas I was in marketing for almost 20 years before I went into tech and sales, and I like to joke that we're really good at spending money, we're not really good at making money.
[00:04:13] Kiri: Mm-hmm.
[00:04:14] Anne: But it's also a [00:04:15] cost center.
[00:04:15] And so the biggest challenge- Yeah ... that you're gonna have is that you are potentially using legacy technologies inside of marketing, where that is the, the piece that's really holding you back from technical excellence, is that there isn't- Mm ... any funding that necessarily. [00:04:30] And so what we see is that the retail media arm has created a second flywheel, and that flywheel is how do you leverage customer data meaningfully across your many different touch points, not simply on behalf of your suppliers, but on behalf [00:04:45] of your business, on behalf of the retailer?
[00:04:48] And I, I am very compelled by it. You and I ended up having that conversation with a couple other retail media leaders who haven't said it publicly, but I think are probably going to soon, where they are being asked to take on more and more in their [00:05:00] organization thanks to the fact that they can fund, um, and really synergize those pieces of technology.
[00:05:05] Kiri: Do you think they're always being asked, or do you think that when someone comes in and they're tasked with, "Okay, go make money from this thing," they look around at this [00:05:15] like totally disheveled sort of state of play. You've got different silos of customer data, you've got different sort of... A lot of these, these businesses have grown through acquisitions, right?
[00:05:29] And [00:05:30] they end up with a lot of legacy tech and departments and sort of y- looking around like, "How do we, like, unify this?" And that's been a real journey that a lot of, uh, retailers and commerce media networks have had to go on. Do you think that that's really [00:05:45] understood internally- ... within these companies?
[00:05:48] Like just how much of a challenge that is? Or like, come on, it's just an ad, just plop an ad on a website. How hard is it?
[00:05:54] Anne: Oh, I- it's so funny. I could go on so many different tangents, so I'm gonna try to stay focused. But I will [00:06:00] say, one of the reasons why I actually love being on the technology side is that I was on the, the client side for the first part of my career.
[00:06:08] And you know, when I was at Clorox, the marcom team sat on a different floor than the [00:06:15] brand team. Mm. I mean, we were literally physically separated. The media team sat separately from the digital team. And that makes me old. Yeah. But, um, and so I, I think what a lot of people who l- live inside of tech companies, especially, [00:06:30] uh, high growth companies that might be a little bit smaller than, say, a Macy's, which is absolutely massive- Is that they have this sort of fantasy of like, "Well, why don't you just go do that?
[00:06:39] Why don't you just go do this thing?" And, and you have to explain to people that person doesn't [00:06:45] even sit in the same building as this other person. And so a lot of it, Kerry, I actually think has to do with the specialization of talent means that you end up sitting somewhere really specific and getting really good at something really [00:07:00] specific.
[00:07:01] And then when a leader comes in who wants to be transitional and actually wants people to bring those capabilities together, it's really not that simple because you actually have to cultivate that talent alongside the systems that you're being [00:07:15] asked to, merge. And so again, I mean, I, I don't mean to just praise Mark this whole time.
[00:07:20] I'll make sure that I say some cutting remarks later so he doesn't
[00:07:24] Kiri: get
[00:07:24] Anne: too- ... high on himself. He will
[00:07:25] Kiri: appreciate that.
[00:07:26] Anne: Yeah, I'll, I'll bring him down a notch, don't worry. Great. But one of the reasons [00:07:30] why Mark, out in the industry talking about what he's talking about is so successful is because he has a pretty diverse background as far as what he's been asked to build over time.
[00:07:39] Mm-hmm. And so he happens to be one of those utility player, option quarterback type [00:07:45] people who can come in and really understand how to run the ball or pass the ball. And so naturally he might be someone who that organization is looking at to take on more. Same with Lisa. Um, with Lisa Valentino, she talked about it in this keynote where [00:08:00] she just is naturally being looked to to take on more because she has, again, just such a breadth and depth of background.
[00:08:06] So I actually think in some ways, yes, it's technology-led, but it's by the people who have the kind of skill [00:08:15] set that would allow for that.
[00:08:16] Kiri: So I'm gonna put you in the, in the sh- You've, you've had a lot of hats that you've worn over the years, and I'm gonna put you back in a retail media leader hat.
[00:08:27] You're trying to break out of this ad [00:08:30] sales silo. What's the first move that you make?
[00:08:35] Anne: Is this a mature retail media organization or are we launching one net new?
[00:08:40] Kiri: Uh, have a mature hat and have a, a launching hat one.
[00:08:44] Anne: True. I, I [00:08:45] think that's cheating. Okay. Um- If I were walking into a retail media network that already existed, and, uh, I have a former colleague, Drew Cashmore, who has incredible intellectual property on this [00:09:00] idea of the first wave of retail media networks put their hand out, they got a bunch of money, and then what you see is a sort of plateau in growth.
[00:09:07] And you look around and you say, "Well, how are we gonna really jumpstart out of this plateau into meaningful growth again?" And I think [00:09:15] what you would be able to do today that you couldn't have done, I'll say two years ago, but maybe even recently as a year ago, is that the technology partners have decided that they're going to be more interoperable.
[00:09:27] Andrew Lipsman talked about this last summer when [00:09:30] Uber made their Instacart announcement, and everyone was like, "Oh my God, this is, you know, these are competitors who have partnered to really get this right. This is really fascinating." Um, but I would look at who are the most highly [00:09:45] interoperable partners who are showing that they're not going to throttle my demand when I'm generating it, whether that's through direct sales or that's through the digitization of certain capabilities within the organization that haven't sat over in a way that [00:10:00] is easy to report on.
[00:10:01] and I would make sure that with the revenue plans that we're establishing, they're sort of what I would call, uh, variability within a cycle. And so if you look at the typical retail [00:10:15] revenue, uh, in a typical retailer, most of that revenue is recognized in the second half of the year, which is why we see these offset fiscal years, just for example.
[00:10:24] Um, you can point to, you know, specialty stores that are gonna sell- Right ... more in the summer or whatever. but what you [00:10:30] wanna look at, and again, the reason why I'm at Miracle Ads and I think Miracle is such an interesting proposition, is that if you have this lumpiness from a revenue standpoint where you're still having to go do this joint business planning and have a sort of, insertion order type [00:10:45] shape for your- Mm
[00:10:46] tier one suppliers, how do you just lower that volatility in your revenue plan so that you have something where you know you're funded through the year, but it's coming from torso tail thanks to the fact- Yeah ... that you've established a [00:11:00] tech stack that's gonna allow you to operate and activate those advertisers without a high cost to serve?
[00:11:05] Kiri: Boom. Wow, that is a, that's a great answer. You know, you've, you, you're pretty practiced at putting that retail media hat on, I have to say.
[00:11:13]
[00:11:14] Kiri: Well, Anne, this [00:11:15] has been great. You know what I'm also really excited about?
[00:11:18] Anne: What's that?
[00:11:18] Kiri: That is, it's Cannes. Cannes is coming up in a few weeks, and you and I are gonna be hosting a breakfast together, an IRL breakfast club on the [00:11:30] Thursday at Cannes, uh, at Hotel Martinez.
[00:11:34] Anne: Can't
[00:11:34] Kiri: wait. If
[00:11:34] Anne: there's anything that I love more than Cannes, it's breakfast at Cannes, Kerry.
[00:11:39] I think it's gonna be so fun.
[00:11:41] Kiri: So if you're a retail media network leader going to Cannes, [00:11:45] please look out in the show notes. We'll have a link to register for that,
[00:11:50] And next week I'm gonna see you again, Ann, to talk about the shortcut demon, which is our third demon inside of retail media that we're gonna be talking about in [00:12:00] this series. Thank you for joining me. I'll see you next week.
[00:12:03] Anne: All right, Kerry. We'll get it done.
[00:12:04]