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CPG Retail Media Executive Brief: Panel Snippets
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[00:00:00] Kiri Editorial: Hello, and welcome back to Retail Media Breakfast Club. Today, I'm sharing some snippets from a replay of a panel that I was on back at Cannes
[00:00:10] Hosted by The CPG Guys
[00:00:13] And sponsored [00:00:15] by Sensor Tower. And the session was called Retail Media Executive Brief: Separating Fact From Fiction. And I sat on this panel with three other media analysts, I'll introduce them in a [00:00:30] second. And it was a very lively discussion because there are some things that we all agree on, and several things that we don't
[00:00:38] The really fun thing about being a analyst or commentator in this industry is that behind the [00:00:45] scenes
[00:00:46] We are all very friendly. We're very collegiate. We share a lot of background intel, but When it comes to our opinions and perspectives,
[00:00:55] we
[00:00:55] sometimes have quite different things that we are interested in [00:01:00] and different hypotheses about how things are going to play out.
[00:01:03] And I think that, that is a wonderful thing because no one can predict the future.
[00:01:09] There are so many different sources and signals, it's impossible to [00:01:15] keep track of everything. And so I love keeping up with Andrew and Debbie and Sarah, and I love having little disagreements where we hash things out in public. So I'm going to share some snippets [00:01:30] of this episode, which you can hear the full episode on the CPG Guys podcast.
[00:01:35] I'll link up to it in the show notes
[00:01:37] and first jump into what we agreed on.
[00:01:41]
[00:01:42] Kiri Editorial: So the host of this [00:01:45] session Ian Simpson, an SVP at Sensotower. He asked me about this series that I had been running a couple of months ago about the internal demons of retail media networks. What holds retail media [00:02:00] networks back?
[00:02:01] my argument here is that where retail media sits in an organization dictates what it is allowed to be, who it reports to, who funds it, where do the profits go? The two [00:02:15] biggest club retailers in the US have publicly shared that they push the profits from retail media back into the member experience, whereas other retail media networks send the profits straight to the bottom [00:02:30] line.
[00:02:30] And who builds the technology? Who is funding that? At some retailers, retail media is a profit center and the forward-looking innovation function, so it ends up funding foundational infrastructure [00:02:45] like CRM and data pipelines that the rest of the company also gets to benefit from. And so it's being asked to do a lot of things that aren't always only producing media revenue.
[00:02:58] Now, Sarah [00:03:00] Marzano at eMarketer came at it from the side of the long tail, the 60-plus RMNs that sit out beyond Amazon and Walmart in the RMN universe. Let's [00:03:15] listen.
[00:03:15] Sarah Marzano: what's really fascinating is a lot of the retailers that fall into that long tail are the ones who aren't gonna hit really scaled massive growth by using the first version of the retail media playbook, right? I agree with Andrew, and I said so in my presentation, that there is a reason to keep [00:03:30] optimizing your on-site experience and keep filling that demand and making sure that you're balancing advertising with user experience, and, uh, there's a reason to chase after that margin-rich revenue that's going to offset the bottom line for your e-commerce business.
[00:03:41] But a lot of the retailers that occupy that [00:03:45] bubble of the, the long tail are the ones who are gonna have to figure out how to activate their physical stores,
[00:03:49] like, the things that come to mind are players like Best Buy, who have this deep category expertise in a category that is higher consideration, right? And the way that they are turning their [00:04:00] stores into media platforms where brands can tell stories is a great example of something that's the right fit for a retailer like them.
[00:04:07]
[00:04:08] Kiri Editorial: And finally, Andrew Lipsman, independent analyst at Media Ads and Commerce, jumped in with [00:04:15] a comment about marketplaces, which I think is 100% on the money
[00:04:19] Andrew Lipsman: Marketplace. Marketplace is where the money at. Like we, we don't talk about this enough. Like this is what Amazon was built on. This is why Walmart is scaling so much.
[00:04:29] This is the [00:04:30] foundation for a huge long tail of advertisers. And that's why, you know, I look at like a lot of-- After the first few, you get to a lot of RMNs that I would say are kind of in their adolescence, and they will do things that amaze you. They are very unique beings, and they're very cool in many [00:04:45] respects, and they need to mature in certain ways.
[00:04:47] Um, I-a couple examples just this past year though that I love is you have some already among the stronger retail media networks like, uh, Best Buy, Lowe's and Ulta. They all [00:05:00] implemented marketplaces. Well, it's like perfect for that, right? And so I think you're already starting to see in, in public discussion of the earnings that this is starting to fuel some of their growth.
[00:05:10]
[00:05:11] Kiri Editorial: And then Ian as our thoughtful moderator, moved [00:05:15] us onto the topic of AI, And Debbie Aho Williamson was the AI analyst in this room of retail media people,
[00:05:22] She called herself a vegan at a barbecue. But Debbie has a really interesting focus on [00:05:30] what AI media looks like now and where it's gonna grow to in the future.
[00:05:36] And she shared what she has been seeing in the data
[00:05:39] Debra: but I think there's a lot of hunger for data about what's happening with ChatGPT, and one of the big findings was that 40%, [00:05:45] almost 40% of ad impressions we, uh, we saw, or Sensor Tower saw in the first couple few months were from retailers. And so, um, that was by far the largest, uh, category of advertisers on ChatGPT.
[00:05:59] And then within [00:06:00] that, Best Buy, um, was the top advertiser in that time period. And I think I wanna go back to what you said about Best Buy a little bit ago, which is, you know, where are the other opportunities that these companies can look to to leverage? When we, when I looked at the data from [00:06:15] Sensor Tower in a little bit more detail, we can see, like, what the headlines of the ads are and what the, uh, what they're advertising.
[00:06:21] And so, um, a query that I got after I published was, well, what are, what, was these, were these ads for the retailer? Like brand ads, like was Best Buy [00:06:30] like advertising Best Buy? No. I mean, any- I looked at as many ads as I possibly could and, and the headlines. They're all product ads. They were literally all product ads.
[00:06:39] I did not see a single brand ad for Best Buy. And so I see that as an opportunity because, [00:06:45] um, someone pointed out to me in response to my piece on LinkedIn that perhaps this is, uh, could be, um, spending by the advertiser, um, re- in this case, Be- Best Buy's advertisers or Best Buy's retail media advertisers being placed into [00:07:00] ChatGPT.
[00:07:00] Now, I'm not sure if that's really the case, but that does represent an interesting opportunity for companies like Best Buy to partner with these organizations to have a new place that you could consider off-site advertising. And I find that really, really fascinating. [00:07:15] Are manual processes slowing down your RMN momentum? With GrowthLoop's composable commerce media solution, retail media and ad teams can [00:07:30] build and launch precise audiences in minutes, activate across DSPs and ad platforms, and deliver transparent ROI reporting that drives advertiser revenue.
[00:07:44] Kiri Masters: [00:07:45] learn how retail media leaders at Costco, Fanatics, and goPuff use GrowthLoop to deliver stronger results for their brand partners fast. Visit [00:08:00] go.growthloop.com/breakfast. That's go.growthloop.com/breakfast
[00:08:09] Kiri Editorial: Now this eventually led into a conversation about how much traffic is actually coming from [00:08:15] these AI chat assistants and whether we can trust that data, because right now it looks pretty small. My argument, which is grounded in data from both Shopify and Criteo, is that a lot of AI-referred traffic is arriving at a [00:08:30] retailer.com and a brand.com without appropriate referral tags that indicate that it came from AI.
[00:08:37] So it looks like direct traffic. And my view is that we are severely undercounting [00:08:45] the traffic coming from AI because it is not easily discernible as coming from those AI assistants. But this is something that Andrew Lipsman isn't buying
[00:08:57] Andrew Lipsman: it's not totally dark, though. It might be dark from an [00:09:00] analytics perspective, but if you're looking at sensor tower data- Mm-hmm ... right, panel-based data, you can see the, what, uh, what visit precedes that visit, so it's not truly dark. You can reconcile multiple data sources to get a view, so you're not totally missing it.
[00:09:13] You might not have the granularity of the re- [00:09:15] the referral. You don't have that UTM, uh, re-referral, so you know every term, but I think you can at least get a holistic perspective of how much it's influenced.
[00:09:24]
[00:09:26] Kiri Editorial: And to this point of a very messy consumer journey and not being [00:09:30] able to track how much actual traffic is coming in through AI assistants, Sarah jumped in offering a little bit of grace
[00:09:39] and credit to retailers and brands that are currently navigating this [00:09:45] messy
[00:09:45] and ever-changing consumer journey
[00:09:47] Sarah Marzano: Because retailers have been grappling with imprecise purchase journeys, uh, for a really long time, right? We do a massive path to purchase study every year at eMarketer, and we know how important word of mouth from friends and family are for [00:10:00] both product discovery and also making a decision. Like, talk about something where there are no signals to understand what shapes that.
[00:10:05] We also know how, uh, important the physical store is for discovering or considering products, even when the purchase ends up happening on an e-commerce website. And we also know that [00:10:15] lower funnel entry points is something that has been skyrocketing ever since you've been able to, like, swipe up on social media, right?
[00:10:20] And so I just wanna give retailers a little bit more credit for adapting to some of these signals in the really fragmented ways that consumers discover and consider their products and, and, and sort of [00:10:30] point out that I think retailers sort of as first movers in terms of advertising in these environments, for me, sort of supports that, right?
[00:10:36] Retailers are used to customers evolving and changing the way they make a decision to make a purchase, right? And they're used to saying, "How do we show up in this environment? How do we make [00:10:45] sure we're top of mind?"
[00:10:45]
[00:10:47] Kiri Editorial: So there we have it, four analysts. No argument about the internal work, but the split is really around whether AI is a new measurement problem or an old one that is simply wearing new [00:11:00] clothes, -- And whether this is really the right problem to be working on compared to other immediate growth opportunities.
[00:11:08] We didn't settle it on this session
[00:11:11] I don't think that we ever will, and that to me is what makes this space [00:11:15] interesting none of us will ever say we have all the answers. We're all learning from each other. And The conversation continues, and you can listen to the full conversation on the latest episode of the CPG Guys podcast.
[00:11:28] Thanks for listening, and I'll [00:11:30] catch you tomorrow.
[00:11:30]