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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Episode 2 - ROAS Isn't Enough - The Buyer's Guide for Retail Media
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[00:00:00] Well, welcome back to the Retail Media Breakfast Club podcast. Today I'm continuing our little miniseries from Retail Media Tech Jam, the live stream I did on LinkedIn with Tom Liman Jello and Scott Messer from The [00:00:15] Middlemen Podcast. And these guys are absolute veterans in ad tech who've pivoted their expertise to retail media and their insights are pure gold.
[00:00:24] In today's snippet, we're diving deep into something that. Tends to bug everyone to some [00:00:30] degree. It's why ROAS alone isn't enough when evaluating retail media networks. Scott and Tom break down the buyer's checklist that every media professional should be thinking about from demanding log files to [00:00:45] understanding PDP quality scores.
[00:00:47] What I love about Tom and Scott's approach is how they connect the dots between retail media's current challenges and lessons from traditional ad tech. They don't just identify problems. They offer practical solutions. [00:01:00] Based on decades of experience. So in this snippet, we're gonna debate whether brands should push harder for transparency, how marketplace dynamics is shifting the game, and a live audience Question about whether retail media will ever move into [00:01:15] full performance based pricing models.
[00:01:17] Let's jump in.
[00:01:18]
[00:01:19] Scott Messer: How do you get beyond just the, the ROAS metric that they give you, right? They're gonna give you a result. Do you care about the quality that's underneath it, [00:01:30] right? The, the, the answer you're gonna hear from the retailers is like, if we moved product, what do you care?
[00:01:35] Kiri Masters: Yes, I've heard that. I've heard that.
[00:01:38] Uh,
[00:01:38] Scott Messer: and look, publishers said the same. Everybody says the same thing. Like, look, if I did my job and you're happy, what do you care about How I did it? Well, you [00:01:45] can, there might still be brand damage that gets caused. There might be things that you don't like or that you wanna be sensitive to.
[00:01:50] Ambient: Mm-hmm. Uh.
[00:01:51] Scott Messer: So it's worth asking, what does my media plan look like?
[00:01:54] Where are you running? Where is this going? Can I see a site list of it? Can I get my log [00:02:00] files? I think that's a big difference between using a retail media network to do your buying and using your own DSP to go do the buying. The DSP will definitely give you the log file back, the retail media network may not.
[00:02:10] Um, and then getting into some of the deeper metrics, right, and [00:02:15] be persistent. In you're asking, right? And make it a real thing. Don't make it. Uh, as much as this is a checklist, like it's not a checklist item, it is something you have to do repeatedly and push them for it. Um, mm-hmm. And you'll probably get better results out of it.
[00:02:29] Or at [00:02:30] least the peace of mind that your media is running in good places or the tech is good. That's my spiel.
[00:02:37] Tom Limongello: Yeah. I think that there's, um. One of the things to try to think through is how much of a marketplace is the [00:02:45] retailer? Um, because a traditional retail media network, you just, you know, own and no properties, you're buying keywords, things like that.
[00:02:51] Um, the marketplaces, Amazon, Walmart, target, plus others, um, are now getting to a place where it's very clear that the PDP. [00:03:00] Um, the brand page, the, the shop page, whatever they call it, um, is really important. And as we move into a world where LLMs are potentially going to be, um, looking for authority in those places, um, there needs to be.
[00:03:13] Uh, you know, [00:03:15] ways of understanding the quality of those pages. And, and in the same way that, you know, as when, uh, sponsored search marketplaces started up initially. I remember when we first launched ours at Quotient, it was kind of like, well, whoever bids the highest, you know, wins. And then we realized, oh no, we [00:03:30] have to put relevancy in here, otherwise we're not gonna get any clicks.
[00:03:32] I think the same kind of thinking in terms of relevance needs to be thought through. And this actually means that now, I mean, it's a buyer's checklist for brands, but actually brands are now on the hook for being publishers themselves in a marketplace. Um, [00:03:45] you know, whether, whether they have to use, you know, flywheels, uh, white spider or somebody else to sort of get their Walmart page to look good enough.
[00:03:52] Um, there's thinking around there that the quality score of that could be done by a third party so that a buyer could [00:04:00] understand. Um, if I'm on this marketplace, how's my, you know, am I gonna have an edge based on the fact that I've spent some, you know, some time working on my brand page here? Or if I have a really good D two C site, is that gonna help me, uh, connect to this, this brand in, in a more AI driven world of [00:04:15] authority?
[00:04:15] So that whole area, I think is an area where. The ad tech providers could start to bring in quality scores, which is very much what we're seeing, um, in, in the world of publishing that, that Scott and I talked about in our episode.
[00:04:29] Kiri Masters: [00:04:30] Sure you're crushing it. Sure. You're crushing Sure. You're crushing it on Amazon and Walmart. But what about Kroger, Instacart, and the fast growing regional grocers?
[00:04:43] A Costa Group builds [00:04:45] holistic media plans on real shopper behavior across all the US retailers that your brand cares about. from digital shelf to retail media to data analytics, Acosta Group offers end-to-end connected commerce [00:05:00] all under one roof. Learn more at ACOA Group and tell them Retail Media Breakfast Club sent you.
[00:05:07] That's a C OS T group. yeah. In those, in those PDPs [00:05:15] though, it's like when you start, when you, if you're only buying one retail media network, doesn't really matter how good their PDPs are.
[00:05:20] Scott Messer: You're just getting what it is. But when you start comparing multiple of them, because you're in multiple distribution points, you'll start to see that some have a. Uh, less friction [00:05:30] in their checkout experience or in the conversion experience. So if you think yourself as a real performance marketer, they're always looking at the funnel and where are the leaks in the funnel and where are users exiting?
[00:05:39] Absolutely. And so like the, the efficiency of your media and [00:05:45] clicks, right? Mm-hmm. You know, are they like under thinking about it through a funnel metric? And then when you look at various ones, you may say like. We might get a better ROAS here, but actually, like this one's so much more efficient.
[00:05:56] Ambient: Mm-hmm.
[00:05:56] Scott Messer: That we wanna stay with the efficient one. I'd have to do [00:06:00] some math to like, prove that out to you. That you go with a, a, a higher, a lower roas. Um, but
[00:06:05] Ambient: yeah,
[00:06:06] Scott Messer: but they need to, this is where you have to start delivering results because if Instacart keeps telling you like, oh, we just, we can crush your CPC goals, that's not a problem.
[00:06:13] That's a real problem [00:06:15] for individual retailers. Because they're gonna take, yeah. I think
[00:06:18] Kiri Masters: the, the, the point about the, the PDP quality is, is a really important factor in the equation because, you know, if, if a retailer offers you limited ability. Um, to optimize [00:06:30] what's, what's on that page, what is the title?
[00:06:31] What does the creative look like then that does certainly factor into roas.
[00:06:36] Tom Limongello: Well, I mean, if you think about it generally up to now, retail media has very much been very locked down. It's, you know, there's, uh, picture, you know, there's a card of the [00:06:45] product with an image on it and a title, and really what you're doing is throwing a sponsored flag on it or maybe doing a price promotion.
[00:06:50] Um, but it, as you see the retail media networks move into more interesting display placements, onsite display placements on offsite [00:07:00] CTV placements. There's a lot more variation there, which could really sort of create differentiation. And I don't know if, if there's a way of, um. Making sure that's scored well.
[00:07:12] Mm-hmm. You know, again, from my, my gallery of, of CPG [00:07:15] people, um, there's interest in how could this work to be a part of the JBP process. Um, how do you link, um, the quality of what the brand is doing, the traffic they're driving, and all that kind of stuff into that process. Um, and that's where I think retail [00:07:30] media continues to be.
[00:07:32] You know, we, we sort of talk about it in a negative way that retail media, sort of like a retailers got a generalist team that's kind of doing everything. There's a benefit to that to some extent because the more holistic they look at the buying. In the JBP process, the [00:07:45] more they could potentially take over more and more of the media ecosystem.
[00:07:48] I don't know if that's controversial to you, Scott, but
[00:07:52] Scott Messer: you're good.
[00:07:55] Kiri Masters: Well, we, we've, uh, ended up with more questions than we have time to answer, which yeah, we probably [00:08:00] speed
[00:08:00] Tom Limongello: questions and we didn't a real quick answer for
[00:08:04] Scott Messer: his. Okay. Um, J Eep asks, uh, there are industries in the Antech world where the advertisers are paying publishers only for the conversion.
[00:08:11] Do you think retail media will move to a point where brands would stop paying for just an impression [00:08:15] or a click and moving to conversion based, um, things? No. Uh, I don't think they moved to a full CPA. Uh, I don't think there's enough in it. It's a long, it is the, the shift from [00:08:30] CPM to CPC and CPA or CPX is about risk, right?
[00:08:34] And in a CPM model, the buyer takes all of the risk and the seller takes no risk, but you also don't get any upside. So I think you will see CPC come in there because [00:08:45] it's a middle ground between CPM and full CPA. In a CPA, the SE the buyer takes zero risk. You only pay when there's a conversion and the seller takes all of the risk.
[00:08:56] In a CPC model, you kind of share that responsibility. Be like, look, I'm [00:09:00] gonna sell you a click. And you're like, okay, I'm gonna buy a click, but I don't know if they convert. So you both have this thing in the middle where quality is really important. And I think we see a lot of, uh, CPCs competing, and then in the ad servers, they're all reducing to an ECPM, which is about [00:09:15] how, how your quality score and how likely you are to get, uh.
[00:09:20] To get a click, which then the, the more efficient you are in getting clicks, the lower your ECPM, actually the higher your ECPM becomes and a retailer wants to run you and they can [00:09:30] lower your CPC for you. That's a long way of saying no. I don't think they'll ever move to a CPA model,
[00:09:35]
[00:09:37] Well, we have to leave it there for today, but if you want to continue listening to this conversation, do check out our full live stream, the [00:09:45] replays available on LinkedIn. We'll link up to it in the show notes and be sure to also check out the Middleman podcast.
[00:09:50] Catch you tomorrow.
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