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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
DG Approach Snips with Editorial
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[00:00:00] Kiri: Dollar General has been everywhere in retail media news this month. Two big announcements back to back, an expansion of their AI-powered in-store audio network with Cusick, then a few weeks later, a unified [00:00:15] on-site and off-site solution with Kevel and The Trade Desk.
[00:00:19] Now, these are all interesting tech announcements about better pipes, better measurement, cleaner workflows for media buyers. But there is a more interesting [00:00:30] read underneath all of this, and Catherine Mazza teed it up perfectly on a recent episode of the Omni Talk podcast with Chris Walton.
[00:00:41]
[00:00:42] Kiri: Now, Catherine has run retail media at [00:00:45] Dick's Sporting Goods and Hy-Vee in the past, and now she sits on the tech side at Barrows Connected Store. So she has seen this from both the buyer side and the build side. And what she said in this [00:01:00] segment isn't only about Dollar General. It's really about the economic logic that is now forcing every RMN to consider what Dollar General is doing, building the full stack in a specific order because the [00:01:15] alternative is hitting a wall on the dollars that they already have.
[00:01:19] Let's listen in.
[00:01:20] Katherine: This is exciting to me, Chris. I, you know, Dollar General Network has been all over the news the last couple weeks. I think it's exciting. There's a couple things top of mind for me. [00:01:30] One is every network out there right now knows that they have to go get the incremental brand or national marketing dollars.
[00:01:37] The trade dollar, shopper marketing dollars, they're tapped out. If you go any deeper, y- the retailer itself could start losing leverage of [00:01:45] cost of goods. So they know that there's another bucket of money out there. That being said, if you're going to get those dollars, you have to have a full funnel offering.
[00:01:54] And I think it is brilliant tying in the off-site higher in the funnel with the [00:02:00] on-site. Now, what I'm even more excited about is the in-store. Go figure that, right? With their, their new partnership with CueSec who, you know, we are strategic partners with them at Bero's connected store. Huge fan of CueSec.
[00:02:12] And so knowing that they're able to take [00:02:15] off-site, on-site, and in-store and connect it, what that's gonna do is it's gonna make it a lot easier now for media buyers and for holdco companies to go in and run campaigns. Um, I think the fact that it's all going to [00:02:30] be unified through the media buying, through trafficking, and through the reporting is great.
[00:02:36] Once it's unlocked for self-serve for these brands and these media agencies, I think it's gonna be an absolute game changer. Is this difficult to [00:02:45] do? Um, you know, I'm a retail media expert. I have never claimed to be an expert on the tech side. I, I know enough to make myself dangerous. That being said, I do know there's a lot of piping that had to be done behind the scenes on this to get the [00:03:00] trade desk, you know, piped in with Kevel, and then the brand's first-party data to build the audiences, and then in-store in the CueSec platform.
[00:03:09] There was certainly a lot of different architecture work that had to be done. [00:03:15] Um, so I'm excited to see the results after they start running water through those pipes and, and seeing how, how the performance looks.
[00:03:22]
[00:03:23] Kiri: for years, the industry narrative has been that retail media is new, but the reality is that it's a [00:03:30] lot messier. A meaningful chunk of retail media revenue has come from reshuffled trade and shopper marketing budgets that brands were already spending with retailers. That well isn't completely dry, but it is tapping out.
[00:03:43] And as Catherine notes, [00:03:45] retailers can't keep pulling harder on that lever without it showing up in their merchant negotiations. So the move to brand budgets isn't a strategic choice anymore. It's, it's survival. So retailers need to ask, "What do you [00:04:00] have to build to credibly compete for them?" Now, I have written quite extensively on this topic about how retailers are trying to tap into brand dollars, what the brands want, what that looks like from the retailer side
[00:04:14] And I wrote [00:04:15] about the agency side of this equation a few weeks ago, recapping another really great podcast, Retail Media Therapy with Viv Krasinski and Colin Lewis, where they pointed out that retail media networks can't win brand dollars with the same performance pitch [00:04:30] that they used on advertisers because agency buyers want unique data.
[00:04:35] They want unique audience access. They want it to be piped into the DSPs that they already use. And the Dollar General announcement is a [00:04:45] direct response to that. it is allowing agencies to buy on-site inventory inside the trade desk, the place that they already buy a lot of their media. [00:05:00] Did you know that leading retail media networks drive 85% of their ads through mid and long tail advertisers?
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[00:05:40] Kiri: But there's another point that Catherine made, which is another one that is [00:05:45] underdeveloped in industry coverage.
[00:05:46] She gets really excited about the in-store layer, which makes sense now that she is at Barrows. But it is also where the, there is the most defensible value that we can count on [00:06:00] in the future as shopping behaviors begin to change and AI-enabled shopping starts pulling upper funnel browsing off of retailer properties entirely.
[00:06:13] Let's
[00:06:14] Katherine: So I think, you know, [00:06:15] the network that I was part of launching for DICK'S Sporting Goods could not have been structurally different than the network that I did for a grocery retailer. And I do think, you know, with, uh, grocery margins, right, we all know [00:06:30] that they are much more compe- compressed than specialty retail.
[00:06:33] I do think that, you know, when you build your network out, you do wanna really make sure that you can focus on high margin ad products, which would be anything on your owned and operated platforms, [00:06:45] before you go off-site. Mm. And I think that Dollar General has done a really great job at that. They've had a solid on-site platform.
[00:06:54] They've had solid sponsored product ads. They're now starting to go in store. And they're poised, with [00:07:00] their national scale and the size of their audience, they're poised to go get these national brand dollars, but this is why now I think they're starting to be more efficient and going off-site as well.
[00:07:10]
[00:07:11] Kiri: So I love the way that Catherine framed this up. She's describing a [00:07:15] sequence. Start with your highest margin ad products on your owned and operated platforms. That's the sponsored product ads. Get those tight. Build that on-site layer. Then add an in-store where you also control the environment [00:07:30] and the measurement.
[00:07:31] only after all of that does actually going off-site make economic sense because off-site is lower margin, and it requires you to share your margin with the DSP, with the agency, with [00:07:45] the measurement partners. And so I think that that's a really interesting way of thinking about sequencing this.
[00:07:51] So Dollar General, it's not the, not the first network to offer on-site, off-site, in-store, but the timing of doing both announcements in the same month [00:08:00] sends a signal about what completing the stack can look like.
[00:08:05] You can listen to the full Omnitalk episode with Chris Walton and Catherine Mazza on the Omnitalk podcast feed. Thanks for tuning in, and I'll catch you tomorrow.
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