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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Does the World Need More Retail Media Networks? It Depends.
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[00:00:00] Kiri Masters: Today's podcast is a guest contribution from Matthew Fantasia, who is the Vice President of Data Partnerships at The Trade Desk, and Matt's newsletter, Matt's Hot Take, is one of my personal favorites. You [00:00:15] can subscribe to it on LinkedIn or on Substack. Now, in last Friday's edition, he covered two major topics of interest to the industry: one, the proliferation of commerce media networks, and two, the [00:00:30] personal AI agent revolution.
[00:00:33] I've wanted to cover both of these, but when I saw Matt's note, I thought, "You know what? He has a sharp take. I'm just going to see if I can share his POV." Um, and I [00:00:45] ha- I'm gonna add, uh, a couple of my comments on at the end as well. So thanks to Matt for letting me run his hot takes here. Let's jump in.
[00:00:57]
[00:00:58] Kiri Masters: So hot [00:01:00] take number one: Does the world need more retail media networks?
[00:01:04] It depends. The latest development in the world of commerce media is that McDonald's is launching their McMedia network. Okay, that isn't the name of it, but it should [00:01:15] be. The fast food chain announced that they will be testing ads from other brands on the restaurant's digital menu boards, kiosks, and inside their app.
[00:01:25] With nearly 14,000 locations in the US serving 26 [00:01:30] million consumers each day, the restaurant's reach is nothing to sneeze at. Also entering the commerce data game is Simon Property Group with the launch of Simon Media Network, which will enable advertisers to activate against their visitation, [00:01:45] transaction, and consumer engagement data.
[00:01:47] And if that wasn't enough, Delta Airlines is also launching an ads business as well, joining rival United Airlines in the rapidly growing travel media space. And Matt's hot [00:02:00] take on this news item is, just when you thought we've reached peak retail media, Ronald McDonald and Grimace kick in the door. The reality is the marketplace has gotten increasingly complex, but [00:02:15] inside of that challenge lies an opportunity that has largely gone untapped to date.
[00:02:20] From my point of view, the opportunity for data providers and brands is to be much more intentional. We need to be loudly asking the [00:02:30] question, who is this for? If I'm McDonald's, Simon, or Delta, I'm thinking about what unique insights or moments they could tap into to differentiate themselves from the [00:02:45] sea of data sets that exist in the marketplace.
[00:02:48] If these new data providers and everyone else can establish a clear brand position and value proposition, it would go a long way to establishing a [00:03:00] foothold in the market, reframing the potential for commerce data as more than a shopper lever, and ultimately driving meaningful outcomes for advertisers.
[00:03:10] And this is Kiri again. Matt, I take your Delta, [00:03:15] McDonald's, and Simon Property Group, and I raise you Citibank, Associated Food Stores, and Aldi, and Spar across the pond, all of which have announced their forays into commerce media in the past couple [00:03:30] of months.
[00:03:31] Now Matt's question, who is this for, is one that I've come at from a few different angles right here in this podcast I did an episode named Some Retailers Want To Power Other Retailers' Ad Businesses. Will It Work? And [00:03:45] in this pod and newsletter, I told the story of a retail media leader at a major CPG company who told me that they would absolutely not spend with 10 more retail media [00:04:00] networks, even if every one of them could meet their standards.
[00:04:04] And that's because planning, buying, reporting across more networks just isn't worth it, even for the largest brands, and this was [00:04:15] one of the very large CPG conglomerates. Second one is another guest piece actually from Drew Cashmore at Vantage, who wrote Retail Media's Fermi Paradox, which explains why most [00:04:30] big retailers win so little retail media share.
[00:04:34] They copy Amazon and Walmart's playbook instead of building on what only they have. And finally, in a piece that I called [00:04:45] RMNs Have a Marketing Problem, I argued that networks should court brands the way any B2B company courts customers, with direct relationships, useful content, and less secrecy.
[00:04:58] McDonald's, Simon, [00:05:00] and Delta are entering a market where brands already say no to more networks, and a clear answer to Matt's question would give them the very best shot at a yes. [00:05:15] Costco isn't scaling its RMN with legacy ad tech and manual solutions. It's leaning into a cloud-centric composable stack. As part of the Costco [00:05:30] Velocity Network, GrowthLoop empowers the retail media team to build audiences directly from the Data Cloud, enabling faster activation, greater relevance, and better performance, all [00:05:45] while maintaining privacy and governance standards.
[00:05:49] The result? Exceptional value and experience for Costco members and better ROI for brand advertisers. Learn why the [00:06:00] GrowthLoop Composable Commerce Media Solution was the right choice for Costco's Velocity Network. Visit go.growthloop.com/breakfast. That's [00:06:15] go.growthloop.com/breakfast
[00:06:18] The second topic that Matt covered in his newsletter is An AI Agent Takes Over the App Store. Now What?
[00:06:25] After about two weeks, Meta's new AI agent, [00:06:30] Muse, has found itself sitting at number one on the US App Store. If you aren't familiar with the new app, what makes Muse different from other popular AI tools is that instead of only answering questions, the app can take actions on behalf of a user, like [00:06:45] sending emails, booking travel, shopping, handling customer service calls.
[00:06:50] And accompanying the agent is a new consumer device, the Muse Charm, which is basically a Tamagotchi that acts as a personal assistant. [00:07:00] In the coming months, Meta will also integrate Muse into their smart glasses. However, an agent is only as good as the access it is granted, and Muse suffered a blow this week when Amazon announced that they were blocking Muse from accessing its site and purchasing [00:07:15] items for its users.
[00:07:16] And here is Matt's hot take. AI agents aren't a totally new concept. How many times have we heard agentic used at conferences in the last two or three years? However, Muse [00:07:30] is perhaps the most consumer-facing application of this technology to date. Before we get too excited, though, a ton of questions need to be answered to understand what impact Muse or any other agent will have on consumer [00:07:45] behavior.
[00:07:45] First and foremost, the bar for trust is extremely high for a tool that, without the proper guardrails, could effectively become a dirty bomb for your personal information. Meta's long history of negligent behavior [00:08:00] makes them about as reliable as believing that shouting, " Swiper, no swiping," will keep Dora the Explorer's backpack safe, so they certainly will have a hill to climb over here.
[00:08:12] Along with trust comes access. [00:08:15] Which tasks and environments will consumers be comfortable with an agent to work on their behalf? We're a long way from Muse hitting the mainstream, but with OpenAI also announcing their consumer-facing agent, Dots, there is [00:08:30] certainly a lot of smoke around this technology at a macro level, which could help spur consumer adoption.
[00:08:36] Lastly, this reinforces the increasing need for creating awareness before consumers turn to a bot or agent to hopefully drive [00:08:45] branded requests versus broad category ones when you're at the mercy of an algorithm. I'm not totally sold that we're ready for agents to take over day-to-day tasks, but this is way too disruptive of a technology to not pay [00:09:00] close attention to how it develops.
[00:09:03] All right. Back to me here. Back to Kiri. Kiri's hot take. Matt asks whether people will trust an agent like Muse. I would add a second question. [00:09:15] Who pays for it? At launch, Meta said that Muse would be free for a generous allowance, and that over time we will profit from taking a small fee from transactions.
[00:09:26] Now, I call BS on this. I do [00:09:30] not expect it to stay at fees. Once merchants compete for an agent's transactions, they'll pay for a better spot in line, and paying for placement in front of a shopper is retail media. [00:09:45] My bet is that ads come to personal AI agents the same way they came to Google, Facebook, and WhatsApp.
[00:09:50] Moreover, this whole trust question according to research that I did with Bazaarvoice, more than 50% of [00:10:00] shoppers think that if they see an ad in a AI chat environment, that future references to that brand or product are also paid. Now, we know that that is not true, at least according to what ChatGPT and [00:10:15] other AI companies tell us, that they're all sponsored, that they're separate organic versus paid results, that ads do not influence the agent.
[00:10:24] Well, people already don't believe that. And moreover, what happens [00:10:30] when they find out that, oh, yes, in fact, the AI is taking a cut of the transaction. They have a financial incentive to recommend that one to you. They don't have a financial incentive to recommend this other party that [00:10:45] isn't giving up a commission for it.
[00:10:47] It has mistrust all over it And that is the part that worries me, these paid rankings that the shopper never actually sees. Ads that are relevant and clearly [00:11:00] labeled are the least worst option for monetizing consumer digital services. I'm working on a longer piece about this, including what ads inside of these agents could look like in the future.[00:11:15]
[00:11:15] More on that to come soon. But for now, thank you for listening. Thank you for Matt for his hot takes. Definitely recommend subscribing to that newsletter. That's it from me. I'll catch you tomorrow
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