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Unlocking Retail Media is the essential podcast for leaders and marketers navigating the rapidly evolving world of retail advertising. We move beyond day-to-day operations to explore the strategic future of the industry, covering major investment trends, the shift to hybrid marketplace models, and the existential disruption posed by Agentic Commerce. Host James Avery brings in top industry veterans and visionary founders to analyze how ground-breaking technology is transforming customer journeys, influencing product catalogs, and forcing retailers to rethink on-site, in-store, and digital media strategies to remain competitive in the modern age.
Paulo Cunha: [00:00:00] No one really wanted to. License foundational core technology, you know, from a two people and a dog startup out of Portea, Portugal. The lesson learned, um, but you know, the progress is let's go into one step up in the platform, sort of value chain, and instead of selling the entire foundational stack right, but selling the use case, those people were really looking for.
James Avery: Welcome to unlocking retail media. The podcast where we explore the evolving world of retail media from data strategy to monetization and everything in between. This is where we break down how retailers can build smarter data-driven media networks by aligning with what brands truly need from scalable ad solutions and meaningful metrics to
Paulo Cunha: cross-channel attribution and programmatic strategy.
James Avery: Welcome to unlocking retail media. If you've been listening to this podcast, uh, we spend a lot of time talking about where retail media is going. Today's episode is gonna be a little bit different. It's our first episode looking back at the [00:01:00] history of Keble and really the history of retail media. Uh, so instead of focusing on what's next, we're taking a step back to explore how Ke became what it is today.
And you can't really tell that story without today's guest. Uh, Paolo is the founder of Shift Forward, uh, the company that Keval acquired to power what is now our audience product. But long before that acquisition, Palo was building audience and data infrastructure in Europe, solving problems that retail media networks are really now starting to fully appreciate.
Uh, this conversation is about the power of first party data. Uh, building things from scratch, crossing borders, what it really looks like when two companies joined forces and how Portugal became one of the core engineering centers powering Keble Today, uh, we'll talk about the founding story of Shift Forward and, and what became Velocity, uh, what it was like navigating acquisition, what changed after joining Keble, what didn't, and how retail media looks different from a European lens.
Paulo, it's great to have you on.
Paulo Cunha: It's great to be here, James. Thank you for having the chat.
James Avery: This is fun because Paulo and I talk all the time. Uh, we hang out in real life all the time. [00:02:00] And so this is one of the, this is one of the first guests, I guess Sam. Sam is somebody else I talk to a lot. This is one of the first guests where, uh, we know each other really, really well.
Uh, so this, this will be fun, but let's, let's give people, let's give people the, the kind of background. So when we, when we, uh, when we announced. The acquisition where we, we acquired, uh, what was called velocity. But uh, when I said earlier, I said the company shift forward because it really started, it started before velocity.
So maybe take us back in time and give us a little bit of the background of, of the shift forward velocity kind of pre kettle days.
Paulo Cunha: For sure. Um, it was an, it's a, it's a great story. We started, um, back in 2011, um, and this was on the back of a sort of career, started, uh, in London, working in the advertising technology, marketing technology space from big data companies to, uh, smaller startups trying to run and create the new generation of advertising technologies.
And with that. So the knowledge, um, started to create relationships with [00:03:00] European publishers and agencies and really thinking through what are they gonna be building next. And one thing I realized is that a lot of these technologies wanted to be, um, sorry. Retailers. Marketplaces, they wanted to be technology companies.
They wanted to own the technology, not because of the technology's sake, but because it was really the way for them to secure their future, their business future, their data. Uh, this was. Before, um, GDPR, but you know, GDPR was looming and all of that privacy sort of focused world was, was coming and everyone was trying to build it.
And so we started out by consulting, um, with these companies, giving them the blueprint of what would be their foundational advertising technologies, um, event tracking, um, user, you know, segmentation and all of that. And eventually thought. We kind of need to build products, right? And so it's a journey of thinking, you know, what do people need?
Okay, they, 90% of the time they needed exactly the same piece of [00:04:00] technology. So, okay, let's start building that piece of technology and licensing it out. Um, no one really wanted to. License foundational core technology, you know, from a two people and a dog startup out of Porto, Portugal. The lesson learned, um, but you know, the progress is let's go into one step up in the platform, sort of value chain and instead of selling the entire foundational stack right, but selling the use case, those people were really looking for, and one of them was for third party data management.
So. Actually, that's where we went out to get the first round of VC funding was really to launch, always be the first party data technology. And I believe at that time there was no other sort of equivalent. Everyone was doing data sharing, third party DMPs, uh, and very little sophistication when it comes to their own, you know, ownership of technology.
That's, that's the initial stage of, of shift forward. And. We thought, but we still wanted to have that [00:05:00] big old piece of the puzzle. So first party data was one thing that owning technology for forecasting was also another thing. Big piece of the puzzle. And it was interesting because even back then, um, looking at the other technology companies out there, and Azer, you know, now Keval was one of them following a similar sort of path.
And in fact, I recommended Azer to some of the German, you know, publishers looking for, you know, proprietary, uh, technology to, to run themselves. And it, it was a similar pattern. I think we filled different boxes in the bigger, you know, in the puzzle. Um, but in the end it's really, it was always been about.
Letting the companies, letting the businesses have a big ownership of the, and the control of how data is processed, what data comes in, have full transparency of what's going on, right? No data sharing by default, that shouldn't be an option. And. It really just progressed from there. And we eventually even went up one more level.
Um, instead of just being first party [00:06:00] data went about why are people doing it? First party data, right? And then it became, oh, we're doing customer segments. That's to optimize on marketing. And that's what we started to do. So we turned the product into a first party data marketing solution so that with machine learning and AI to be able to do automated segmentation.
So really lift up. Um, the, the work out of the person behind the screen to, to do their job right. And I think that was about the same time, and we're right on that journey, um, that he came knocking on the door asking about what were we doing? And, um, and yeah, that, that's part of the story about that.
James Avery: Yeah, I mean, we've, we've first, I mean, I know, I think we talked before this, but I think the, the, the memory I have of the first kind of real time we started talking a lot was around, we were really looking at how do we improve our forecasting.
So our, our forecasting engine was, was, you know, it was fine back then. This is, you know, back in, you know, pre 2020, uh, you know, we were, we were, you know, we had a forecasting engine, but it, it, it wasn't, you know, at the level we [00:07:00] needed it to be, right. Like it hadn't, it wasn't taking the approach of, of really doing full like simulations and, and do everything like frequency capping and, and user targeting and, and all the kind of really complex kind of targeting that we'd added.
And so I was, I was kind of just looking around and found this, this website. That looked like an API for forecasting and, and I was like, Hey, this is, this is actually pretty interesting. I think this is, this is what we wanna use. And I think I just reached out in a, in like through the form or through the email or something like that.
Paulo Cunha: It is,
James Avery: uh, and we like set, set up a call and we like had a call about, that's right. About how does, uh, like, hey, can we use your API? How does this work?
Paulo Cunha: Yeah. It was pretty funny because I actually think the first time I saw that email come through. Kind of doubter that was a real legitimate, you know, lead generative, um, you know, um, request because, uh, we actually had reached out to Adzerk before, you know, um, pitching, you know, the forecasting as a solution.
'cause that was one of the two pieces of the puzzle we had built, [00:08:00] right. The forecasting engine and the first party data management system. And, and that was the beginning of that conversation. And we, I think we only focused on the forecast to begin with, right? For. A big good couple of years, we really just focused on how can we make Kell's forecast better, right?
And I think it was at the end of that project when we actually completed the handover, it was starting to run. That you eventually turn around and said, well, what are you doing? What's the company doing? Well, what else is out there? And like, oh, we haven't really been speaking about that. We're just so focused on fixing that problem and improving that solution that we didn't really, you know, talk about, Hey, what are we both doing here?
And uh, and I think there was an interesting moment for us as well, because throughout this journey we. We sold shift forward to velocity, hence the changing in the name, and it was a back of the recognition that. Shift tour as an original, you know, company was really a technology focused company. It really didn't have mature and [00:09:00] sophisticated sales and marketing.
And we really had two options out there really Is it to sell or to, um, to, to reinvest and fundraise to go on that path. And so we found in, in originally in velocity, um. A suitable acquirer. Um, it just turned out that that business did not, uh, work out well and within a few months we had sort of rebooted do a say shift forward version two, which is essentially the same thing.
But in the process we actually got new investors and new backers to let us have that second stage. So that's when we actually took from the first foundational first party data infrastructure. To the first party, you know, customer data platform, DMP, whatever you want to call it. That was really about the targeting.
And ROI led performance driven, um, users of the first party data itself, right? And that's where we first got our first real interesting customers in the e-commerce space. And, you know, we're, that moment a few years in, we're thinking, [00:10:00] okay, what do we do now? Do we go through again, the same exercise that what we found.
Decent product market fit. Do we then now do the next 10 x sort of growth through funding? Or do we, you know, find someone else to go and, um, join forces again? Because that was always on the, on the table. And I think you just came knocking on the right moment. We were just thinking through, you know, what are we doing here?
And I remember you were asking me about that and I thought, I don't think it makes any sense. 'cause like you're, you're doing ad serving, like for went. No, no, no. Hang on. That's not the future. You know, that has been the trajectory we've been, but we actually are selling into, um, and working on retailers and onsite and e-commerce and it's all about powering that onsite marketing.
And I'm like, oh, that's, that's was the first time sort of that dawned on me what retail media was. I don't even know if there was an infrared at the moment, but the idea of doing that on you, you know, the [00:11:00] e-commerce retailers on properties. I was like, ah, that's the missing link, right? Because from a first body data perspective, you have it, but you have to use it to make, you know, to generate revenue from it.
And the retail media as a, as a business model is exactly that, right? It's taking ownership of everything you have, not taking part of it, and, but still really generating meaningful revenue, generating a better customer experience. But it just never, I didn't have thought about it, like, until you read out that you were actually starting that path, like, oh.
Okay, then that maybe makes sense for us to keep talking and I'll show you what we have.
James Avery: Yeah, I remember that. I remember that conversation. 'cause I, I think I, I was like, Hey, you know, kind of like loosely opening the topic of like, hey, like maybe, maybe it would make sense for, uh, you know, us to kind of combine forces.
And you were like, eh, you know, I don't know. And I was like, well, here, let me, let me show you this deck. And I think I basically like, like just walked you through. I remember it was a document I shared. I don't remember, but it was, uh. You know, it was basically the pitch for like what [00:12:00] became the retail media cloud, right?
That was like, okay, like we, we have this infrastructure for, for ad serving and reporting. You know, we, we are adding in, we've been working with you for the last year on this, like forecasting infrastructure, and I'm like, but there's this missing piece of, of how do retailers. Get their first party data, get it segmented properly, get it into the system for targeting, you know, whether that's connecting to their already existing CDP or that's collecting the data on their site or, or however we're getting that first party data.
And then I think, yeah, you're like, oh, okay, yeah, this, this could make sense. And then, you know, a bunch of messy acquisition stuff. And then we, we made it happen.
Paulo Cunha: Absolutely. Yeah, it was, um, it was, it was, uh, revelation for me because it wasn't obvious. Now I think it's probably obvious that is the future and that is what, uh, one of the biggest revenue lines for, for some of the retailers and certainly marketplaces.
But it wasn't very obvious back then that that was sort of a promising future. It was sort of a good bat, but, you know, an unknown bat at that time, I think, and [00:13:00] I kind of saw. While you are seeing, because you were showing it to me, if I had discovered it on my own, I'm not sure I would've been, uh, as enticed into it as, uh, as I was because you sort of show me that perspective.
Right. That was very important.
James Avery: Yeah. And I think it's, and then whenever I think when I think about acquisitions, it's like, what? You know, there has to be like multiple good reasons and like good, good things to come out of it. And so, you know, I think one, obviously we've talked a little bit about like the, the forecasting engine that, you know, we acquired as part of it and the team behind that.
Like we've now, you know, we now have rolled out forecasting across. You know, most of our customers, they have, you know, a great UI for, for seeing how do they, how do they book campaigns? Like it really, you know, drives that ability to, to predictably sell, uh, you know, campaigns. Um, you know, so that's, that's one like check mark.
It's been successful. I think two, whether this, talk a little bit more about this is like the. Is audience. And that's not a first party data management system where, [00:14:00] um, you know, I think, I think it's, even today there's a lot of, a lot of retailers that maybe have a CDP. Uh, they have like customer data, uh, but I think the, the piece they're missing is how do they activate that?
How do they activate that quickly? I think one of the things that opened that really opened my eyes when, when looking at how, how, uh, you know, you all, and now we all have, like, have designed and, and build audience is that, you know, if I, if I go to a, you know, retailer's site, you know, I go to, I go to Walmart and I search for, you know, 70 ish tv right?
Then I, I get distracted and I, I click on another tab. Like how quickly, how quickly does Walmart start targeting me as somebody who is, who was looking to buy a 70 inch tv? I think what we saw with a lot of people's current kind of data, warehouse driven infrastructure, it could be days at minimum hours.
Paulo Cunha: Hours at
James Avery: least.
Paulo Cunha: Yeah.
James Avery: But that, but, but that next, that next impression. That's the most valuable, right? It's like I, I go click and, you [00:15:00] know, suddenly I click on another category or you know, I click through and, and are, are men now getting targeted with ads for, for looking to buy a 70 inch tv? 'cause I'm clearly an, an intender now to buy something that is, you know, a pretty sizable purchase.
Uh, and we've seen that like a lot of the current infrastructure just doesn. Still doesn't support that.
Paulo Cunha: Yeah, I think the, the, the crux of it is a lot of the processes the retailers have really come from their marketing, uh, activities. They don't come from a retail media activity. And so a lot, because on paper they look very similar, right?
I need to segment my customer base and I need to push it to a platform where it gets used. Um, but the level is in the detail, whereas in the traditional marketing sense. That's a couple of hours. I'm still not gonna reach out to these consumers for the next 30 days anyway. It's, that won't make so much of a difference.
But if you're monetizing your own inventory on a journey [00:16:00] and the journey goes, you know, for 30 minutes on the website or app, and I'm going from the first page views or you know, advertising exposures and I now navigate through the page and the category catalog, and I'm now thinking through, I'm looking at prices, I may even stop and go onto the store and buy it in store.
That that journey. A few minutes to a few, you know, maybe a day. But the opportunity for the app to be exposed is just, is this in the first few seconds or minutes of that journey, you've gotta be able to recognize the behavior, see the pattern, and be able to say, oh no. People in this category, they are likely to do X, Y, and Z.
And. Surface the most relevant data at that moment in time. So it's one of those situations where it directly translates into more, um, sellable inventory, higher CPMs, right? It's not just, I'm gonna reach x more users. It's like you're gonna get much higher yield simply because you're able to to, to segment earlier in the journey.
And that wasn't true before, [00:17:00] right? If it was used for email marketing, okay, you're gonna get email the day after, it doesn't make so much of a difference. And I think that's the big. Thing there. Most people are obviously in their journey in the maturity journey, reusing their existing flows and stack for retail media.
But as you grow in your sophistication. You start to get specialized tools. I think audience, the cable audience offering is exactly that. It's like the specialized tool, um, to either grab that information, be, you know, make it seamlessly, do that segmentation, but also reconcile offline and online, say transactions, make sure that's at all attri so you can do online, you know, views of ads.
See what happens in the offline world and attach those conversions back to the online world. All of that is not a use case that existed before in just a pure marketing play.
James Avery: Yeah, no, a hundred percent. And I think, and I think it even comes down to, I mean, something we've looked at a lot for, for e-commerce, where you're right, on a marketing standpoint, it's probably not as important, but that, [00:18:00] that merging of logged in, unlogged in users, you know, I search for something, I see an ad, then I add it to my cart, then I log in.
Like, are you, are you correctly bridging those profiles to, for both attribution as profile and segmentation and kind of a lot of those just really nitty gritty details that really matter in a retail media use case that you're right, that if you're sending a text message the next day, it's. It doesn't really matter, right?
Like you, you, they logged in, they, they bought something, you're gonna send 'em a follow-up text message, you know? But when we're looking at attribution and, you know,
Paulo Cunha: from a consumer experience perspective as well, right? Uh, we're talking about ads, but actually when we talk about retail media, it's not so much a nab in the traditional sense, right?
It's really how I'm, how I'm experiencing the product catalog. It's a slightly different way of experiencing a product catalog. And so. The right ad in this context, it's really about the right offer, the right product for me as a consumer. So if [00:19:00] you don't recognize me in the journey early enough in what I'm attempting to do, then I'm just gonna have a poorer experience.
You're, you're using data signals from yesterday, or five days ago, or a month ago, that are no longer relevant in what I'm doing right now. Right. And so this is, I think. Going a little bit, you know, foreseeing into the future. I think what ends up happening is this convergence and the importance of, you know, the user experience and recognizing that the earlier you can get that information to be used and the merging of natural organic listing together with promoted listing, um, for a single outcome, which is.
You know, a better consumer experience, which ultimately will lead to a higher, you know, retail plus, uh, ad revenue. 'cause that's the, yeah, that's the end game. It's to fulfill the higher revenue for, regardless of where it comes from. Right. Um, so almost coming maybe for circle on the use of this information, it's really to the benefit of [00:20:00] the consumer then the benefits the retailer or marketplace.
James Avery: Yeah. Yeah, absolutely. So let's, let's jump back a little bit into, uh. It's kind of the, the cultural changes and things like that, right? So thinking about, you know, we've, we've, we've got this great tack. We, we kind of complete the acquisition, you know, bring, bring these two companies together. I think something you told me that I always, I always loved was like, you know, our, our kind of company values are al we're always super aligned.
It felt like, like even the first couple times I came over to Portugal and, and met with the team and, and talked to people. It was like our, you know, it felt like there was a good cultural alignment between, between the companies.
Paulo Cunha: Yeah, for sure. Um, can I tell the story and the, the, remember that story? Yeah.
We, we stole, I can say that now. We stole the original Adzerk sort of, uh, I dunno if it was a code of conduct or the 10 Commandments, whatever it was, because. You know, back then you felt. So much exactly how we were [00:21:00] thinking. You know, how people should be, you know, we are all adults. We trust we, we hired good people, we trust the people we hire.
Therefore, we don't have to go around and micromanage, look everyone's shoulder, and obviously written up in a such a, you know, funny, irreverent way. We thought, why try to do this differently? We just copy paste it, change a few words here and there. It was an internal document that we then created with it.
Anita lives for a very long time, and I think I shared it to you.
James Avery: Yeah, I mean, it's like, it is, it is a great example of like, I think, uh, like I remember when you, when you told me that, I was like, oh, this is perfect. Like this is gonna be a really, a really natural transition for, for all the employees and, and everybody.
Um, and I think one of the things I'm very, I'm very proud of is like, I think, you know, we're, what are we, four years in, five years in? Um, and we, you know, I think we've lost like one person. Like, and, and you, and you think about it over time. It's kind of like, you know, being able to retain, you know, one of the, one of the main reasons, you know, we always look when we do an [00:22:00] acquisition is, is the people.
And being able to, you know, basically retain, you know, effectively a hundred percent of the people, uh, has been awesome. Uh, and that's, that's, uh, you know, I think speaks to that culture, but also speaks to the kind of team you built and the, the culture you built, uh, at the company.
Paulo Cunha: I think, I think it speaks to the culture you've built, to be honest, because one of the signals that we were looking for, um, 'cause we had done that in the past, right?
And it's like we, we kind of knew or thought we knew what we're looking for, uh, in a, in joining forces with someone else. And the cultural alignment was one of the most important pieces because nothing works unless it works for people. And we kind of. Always thought that one way to build a good company is to really attract very highly talented people that like to work together, because especially in the engineering front.
Uh, which we are, you know, very strong in. We by hiring goods, engineering leadership, you attract other good engineers. You attract junior [00:23:00] engineers, or should that become great senior engineers. And so we were looking for at, at Azer, you know, is that. The sort of culture we have there Is there, is it, is it, is it a good chance that this sort of mentality is going to continue?
And so I think the fact that there was so, you know, such a small amount of attrition is exactly because that was the reality afterwards, right? With the code of conduct is a document, you know, it's an interesting perspective, but then we have to see reality just, you know, it did match reality. That's why I think you have this.
So it's a, when two very, very similar cultures sort of, uh, meet each other for sure.
James Avery: Yeah, and I think like it's, it's been really interesting to, you know, I think when I first, you know, when I, I think when I first came over to meet you. That was my first time in Portugal. That was my first time in Porto.
Was
it?
Paulo Cunha: How good?
James Avery: Um, yeah, a hundred percent. Like I, I mean obviously we'd, we'd gone to Europe a lot. We had customers in like Amsterdam and London. Um, we didn't have any customers in Portugal. But now, you know, it's gone from where. [00:24:00] I think when I first came over there, you know, it was, I dunno, 12, 14 people, something like that to where now it's.
I don't know, 35. Like, it's, it's, it's a, it's a big team now in Porto. We've really made it kind of a, you know, probably our main engineering hub, uh, for the company. I think that speaks a lot to the, yeah, it speaks a lot to the talent. Um, but also speaks a lot to like the. I think it's helped us really grow, grow so much in Europe.
Um, you know, I mean, some of our, we have, we have great customers now in Portugal and in Spain and in, you know, of course throughout the UK and, and Netherlands and Nordics. Um, but really having a, having a European engineering hub, uh, I think it's been great for us. But what's, what's it, what's it felt like on, on your side?
Paulo Cunha: It changed over time, right? When we just got acquired and we got together. It wasn't so much of a bigger presence. Right. It was smaller, as you were saying, and it. It's inevitable that it will feel a little bit like a satellite office, which, which it [00:25:00] was. And it's fair to say that. Um, but I think the one thing I really recognize, like the visits that leadership has always made and you made the point of coming over multiple times in the year, um, that really helps create that, that link and um, really makes people feel that they belong somewhere.
And over time, uh, not only because of the growth of the, of the team, but also because of the growth that we had in the European space. Um, it, it's inevitable that people feel, you know, they're growing more locally, even if it's not just Portugal. Portugal is a small market, has some interesting customers, you know, very sophisticated in what you know, what they're doing.
Um, but there's also other brand names that are more recognized and, you know. Multiple in multiple European countries. I think the team recognizes that and I think Phil's motivated with that as well. And it, one thing leads to the other, right? Because I think European companies and I, I think they recognize that there's a lot of US technology, there's not so much US technology with a strong European presence.
And I think. [00:26:00] One thing I hear from our customers and prospects is that they like the fact that we have people, uh, very close by. Even if they're not, um, you know, even the engineering teams, even if they're not, the teams are gonna deal with, uh, an everyday basis. The fact that the Cs, that the product teams have a close relationship with engineering and they are only one, you know, step away sort of getting a fix done.
Right? Um, they're in the same time zones. They're speaking similar languages sometimes, like we have meetings in Spanish sometimes, which I don't really speak well, but at least, you know, there's a lot of people that do and you know, they, they have a good conversation and I think that's something that it, it helps I think a lot.
Um. And he helps, seems that sense of belonging as well.
James Avery: Yeah, and I think, I think, I mean obviously, you know, it's, it's tough to have to go to Porto multiple times a year. Uh, you know, it's that now it's, it's a, it's a beautiful, beautiful city. For those that don't know, um, it is, it's a, it's a joy to go there.
So it's never, it's never a, uh, it's never a [00:27:00] sacrifice to go to Porto, uh, most times of the year, sometimes December, but, yeah, yeah, sometimes there's a couple iffy months. But, uh, but yeah, I think it's, it's, it's been, you know, and obviously it's, it's really helped us. You know, with, you know, we have some great customers in Portugal, right?
Like Sona, who we, we talk about a lot. Um, you know, I think, I think, you know, pivoting this into a little bit broader topic of like European retail media, I think something I continue to be surprised by, uh, is really, you know, even though it may be a smaller market, you know, especially if we're sitting earlier in the US and we think about the size of the market in Portugal versus like the US uh, technologically, a lot of the retailers I think are further along.
In Europe than larger retailers are here in the United States. And I think that's a really kind of interesting phenomenon, and I'm not sure if it's due to kind of the, you know, their, their space in the market, right? Like Sona being the, the number one in Portugal kind of demands that, that brand spend and presence and, and kind of [00:28:00] importance compared to maybe a, a bigger grocer here in the us.
But there they're like. Seventh on the list in the us right?
Paulo Cunha: Yeah. I think that's part of the reason. And the fragmentation of the European market just tends to create those sort of situations where you may have, you know, an international player dominating the market, but more often, at least nu a number two, will be a local player that is very, very strong in our market.
And the only you know, way to win of, against any other competition is really to continue to be positioned as number one or number two, and invest in technology, invest in their, you know, innovation. And I think that's what we see in the Portuguese market. Like, you know, personally with Sonai, we know sort of very well.
I think that's that innovation that wanting to be, uh, and continue to be number one. Is, is probably what drove them to have a sophisticated retail media program. Um, and there's then other types of companies, um, in the local space where [00:29:00] they're either like a true local player or they're part of a, a holding group, right?
And so sometimes in those situations you have the holding group. In their original country being very innovative. But then the satellite countries where they also operate, they're not as sophisticated because they're either waiting or they're not having as much attention as their core initial country.
Whereas perhaps in the US, even though there's a state by state sort of situation, it's not as fragmented. Right. When you roll out, you're gonna go, you know, roll out across. All the US market. Well, that's just not possible because language barriers, because of market, it's just a very different dynamic. I think that's probably the reason why we see this, um, nascent, but then all of a sudden strong innovation in, in the smaller market.
And that would normally justify that.
James Avery: Yeah, I think, I think the, the European HoldCo. Really international HoldCo is like alien to a lot of people in the United States. Uh, not where like, you know, [00:30:00] obviously we, we have holdcos here, but I think the, the difference is that, you know, we'll, we'll talk to somebody where they, you know, they're a holding company and they might own, you know, they own a grocery store, they own a convenience store, they own a newspaper and a mobile carrier, and, and a satellite company or something.
Um, or you'll have somebody who owns, uh, you know, grocery chains in Portugal and owns grocery chains in Poland. And in Brazil or something. And you know, just the, these very, like, very different divergent companies or you know, or a home improvement store and a grocery store will be in the same oldco, uh, which has been at, you know, for, if you're used to operating in the us like we really, we really don't have that.
Uh, we might have, you know, a number of, of banners, you know, you might have like Safeway and Albertsons and, you know, and things like that. But it's, it's rare to have, you know, just a totally different type of retailer in a totally different country. Kind of under that same, that same HoldCo.
Paulo Cunha: I think it's because of the growth, uh, opportunity, right?
I think in the us uh, in the same vertical, you can grow just by the scale of the market. [00:31:00] Over here, you can try to grow that way, and certainly some companies obviously do, but the other way to grow is just to go into more verticals, and I think that happens more often because the individual markets are smaller, which, yeah, that makes
James Avery: sense.
Paulo Cunha: And from a retail media perspective, I don't think we see a lot of cross vertical, um, utilization yet. Uh, but I think it's possibly one of the future pieces and perhaps where you see some innovation out of Europe, where it's less likely in the US where you're joining multiple verticals up because they belong to the same group.
You know, trying to innovate together and trying to do something special as a, as a, as a, as a group. Because those groups, as you're saying, they don't exist elsewhere at the same, you know, scale as they do here.
James Avery: So, and tying it back to kind of a, a larger trend, uh, you know, you kind of have a unique perspective, right?
Like, uh, you know, as our VP of product, you're out there talking to European retailers sometimes in. Portuguese, [00:32:00] you're talking to American retailers, you're talking to, you know, south American retailers, uh, you know, how do you, how do you see, what are the big differences that you see when you're looking at, like the retail media?
Not like, you know, we talked a little bit about that retail is different, but really when they, when they think about the retail media programs, like what are the differences you see in these different markets?
Paulo Cunha: I think the, the biggest obvious. Observation is just the scale, right? Um, a medium size, um, player in the US is probably larger than some of the largest in, in the European space.
There has some exceptions, and especially in the marketplace space. There's some very large ones, but there's that, there's that size. And I think the size component just creates a need for, um. The technology to be thought and used in a slightly different way. So with a larger scale, you probably tend to do small optimizations or small improvements that because of the scale they have a big impact.
Whereas if you're a small, slightly smaller scale, you need [00:33:00] to go for more, I'm not gonna say dramatic or more innovative, more, um, impactful, um, opportunities or designs or strategies. Because as the market is a smaller, in order to get the same sort of, uh, impact, you just have to be, you know, perhaps a little bit more adventurous.
So we start to see, uh, I think some of that in, say forecasting management, yield management, so those needs, for example, to really be optimizing towards the highest TCPM ever possible. That still that happens in the US market, but only when those companies have really reached such a high maturity that they're already sold out.
That's a lot more common in Europe because the market is smaller. Um, and so they have to keep investing into these sort of, uh, especially in around the ai, uh, predicting what is the next best action, what is the best ad, and so we try to squeeze as much as possible out of the smaller amount of inventory and, you know, brand spend that they have [00:34:00] access to.
I think that's the, that's the shift. There's, there's more abundance overall, I think from a US market perspective. Um, that's like the biggest. So that perhaps explain a lot of the differences in more detail. Um, and perhaps because of that, this verticalized approach, like one C we, one thing we see is the, there's a lot of.
Pro pure play verticals here. Like, uh, just perfumes, like the only thing that sounds is perfumes or like beauty, but just in isolation. That's, um, that's a challenge when you have that without, um, the scale. And so. Looking to see how do we help those sort of organizations. Um, because then it's even more important because the number of advertisers are gonna be, you know, to do that are smaller, so they will need a direct sales force.
Right. So whereas in the US you go, no, it's just programmatic or, um. Programmatic direct is an option like over in Europe, like there's no one, no single market with enough scale for those sort of verticals to operate in. So we [00:35:00] see more lot more demand for those sort of need integrations over in the US and in Europe is a lot more direct sold for those sort of companies.
I think that that's like the biggest, um, um, consequence, uh, of, of this market segmentation. Yeah.
James Avery: Yeah, that makes sense. And how about, I mean, the other, the other big, big difference right, is GDPR, right? So going back to our like, kind of first party data and, and you know, we actually, this came up in a last, a couple episodes that we've been talking about people with like in-store and where you were kind of the, the, the idea was that, you know, Europe kind of move forward and in-store a lot faster because.
GDPR was kind of a constraint, but how do you, how do you think about like, as a, like on a retail media standpoint, like, like how, you know, how does GDPR play into it? Like, how is that impacting the, you know, what, what we can do in Europe versus in the us?
Paulo Cunha: I think it's, uh. For Keval and in fact for shift forward, that was sort of a great opportunity because I'm not gonna say it was by design because UDPR didn't exist at that time.
Not, not in its full [00:36:00] fledge, uh, you know why it came to be. But this first party data approach, this data isolation by principle from the beginning actually makes ke a very, uh, interesting opportunity to, to the retailers and marketplaces in Europe because it's one of the places it can. Be very sure without having to go through, you know, a lot of hops to ensure that their data is only used by them.
You know, even our, you know, training models are only, you know, used with each individual customer, even by design. And so I think that it, it's almost like, um, if anyone starts to talk to me about GDPR, we know we're in the right path. 'cause okay. If you're concerned about privacy, we all of a sudden have a very good chance of being a good fit because we're that privacy centric.
I think in the us even though it's less of a problem. Um, I think. A lot of the big brand and retailers, perhaps not so much on the retail, but in terms of brands and brand spend, they still have that consciousness. So even though they on the legislative side is not exactly the same thing, the [00:37:00] consumer, um, trusts the, um, the brand reputation.
All of that is thinking in A-G-D-P-R like manna. They do not want their data to be misused, even if, uh, you know, certain things are more flexible in the us. They, because of GDPR are influenced to not wanna have those practices. So I think we kinda win by proxy there as well because of that need. Um, but certainly conversations start with privacy first in mind in Europe, much sooner than, than than the US still.
Um, but they both, they both get there at some point because the brand's sort of demanding it now as well.
James Avery: Yeah, and we, and we kind of see, like, I, I feel like this is when, you know, I kind of feel like a European company these days. Uh, you know, I think we're, we actually have more people in Europe than we do, uh, in the United States.
Um, but I think that when you, when you. When you're working with a European company, GDPR is just like, understood that it's gonna be a part of the equation. Uh, and we always see friction with this. When you, when you look at like how Google operates and, and kind of some of the consent they, [00:38:00] they require just to do first party ad serving and things like that, that, you know, are, are real barriers that, you know, probably wouldn't, wouldn't be the case, wouldn't be so, uh, you know, wouldn't be the case if Google was, you know.
More European and less, less American, right? Like if they, if they were having to live the pain of that, um, you know, they, they would probably look at that differently. Uh, so it's where I'm proud to be, proud to be a largely European, uh, uh, company these days. Um. Awesome. So, so kind of, you know, wrapping this back up, going back to kind of the, you know, just the, the acquisition and, and kind of taking a second for, you know, any, any other founders who are, who are listening, who are thinking about, you know, going through an acquisition.
Like what, what would your advice be to, to another founder, you know, to kind of, you know, have a successful acquisition and, and post transition and kind of keep growing?
Paulo Cunha: I think for me it's about really think through what's the fit. What is the, first of all, is the acquisition the right thing, right? An exit to another company?
Is that the right move [00:39:00] or is it going on on your own? Um, with a new investment round, with a new set of, of backers or, um, the second is really the cultural fit. I think the cultural fit is the most, um. I guess mis uh, misvalued part of the equation. I think everyone goes for the number. Uh, what's in it for me?
I think that's a, yeah, that's the obvious part. But like, is this sustainable in the future? Because if it is not, you are not gonna be happy doing that. Your team's not gonna be happy doing that. No matter how much you know, was put on the table, you're not gonna, you know. Be having all full potential because you're gonna be leaving sooner rather than later.
Um, that was, I think, the most important piece. And think about the future for, obviously then your, your investors, um, if you're selling into another company, more likely than, um, than, than not to, to sell with some stock parts of [00:40:00] it. So. The financial growth and success of the company, you're, you're being acquired by is very important for you as well as for your investors.
And, you know, it is your fiduciary duty to make sure that your, you know, your baby is in the right home. And, uh, I thought about that of a lot, you know, and I did think that Keval. Did have that route and I eventually saw that it did get to, you know, you did get to have the bitch and I needed that bitch and really need to understand that was the future.
Because if she was just a plain old boring ad tech, like I wouldn't see that. And I didn't in the beginning, but like, no, okay, no, I see that, but it, it then it makes sense and I think that's something you have to go. We just not sell to the first highest bidder because that this is not gonna give you the longest, um, even financial outcome.
James Avery: Awesome. Well, thank you so much for coming on, Paulo, and I'll, I'll put an offer out for, for our listeners if you happen to be in Porto. Absolutely. I think if you, if you reach out, if you reach out to Paulo, he will, he will, [00:41:00] uh, we will take you out for a, a nice superba or one of these great Portuguese wines that you can't even barely get outside the country.
Um, so deal, uh, if you're, if you're, uh, if you're in the retail media space in Porto, uh, I think Paulo or some other folks there could, could take you out and show you a good time.
Paulo Cunha: Absolutely. And, uh, thank you for inviting me and having me today. That was great. I'm a big fan of the podcast.
James Avery: Awesome. Thank you, polo.
Paulo Cunha: Thank you James.
James Avery: Thanks for tuning in to unlocking Retail Media. If you enjoyed this episode, don't forget to subscribe and share this show with your network. We'll be back soon with more insights to help you navigate the future of retail media. See you next time.