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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Is retail media kidding itself? [Next in media guest post]
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[00:00:00] Kiri Masters: Good morning. Welcome to Retail Media Breakfast Club. I am your host, Kiri Masters, and today I'm going to be reading a newsletter post to you from a friend of mine in the media ecosystem, Mike [00:00:15] Shields, who writes a newsletter called Next in Media, which is also a great podcast.
[00:00:20] And Mike wrote this great piece a couple of weeks back called "Is Retail Media Kidding Itself?" And with Mike's permission, [00:00:30] I'm going to be sharing it with you here today. I'll link up to the original piece in the show notes and definitely recommend subscribing to Next in Media if you aren't already.
[00:00:40] Let's jump in.
[00:00:42]
[00:00:43] Kiri Masters: Over the past [00:00:45] several years, the talk in retail media circles has been the need to go off-platform and definitely full funnel, which has essentially been code for 'we're running out of room and ad dollars on our shopping website and [00:01:00] app, And we want access to bigger brand budgets.
[00:01:04] At a media offsite last week, I talked to an industry exec about just how hard this can be for most retail media networks outside of the Amazon [00:01:15] and Walmart realm. Right now, bringing a retailer's data out to every DSP and the open web and TV may not lead to a clear payoff
[00:01:27] Melissa Gallo, VP of [00:01:30] Solutions and Delivery at Vantage, a retail media tech firm, says that most RMNs are still being funded by shopper marketing budgets. However, she noted that budget flows are becoming multidimensional. If you build only for the [00:01:45] hardcore media buyer, you miss a large swath of investment.
[00:01:49] If you build only for the shopper marketer, you miss the incremental dollars. That tension is really the heart of this debate
[00:01:58] Now, some argue that this debate [00:02:00] misses the point. They might even ask, are too many RMNs hoping to become full-fledged media brands? Molly Jelm, the corporate vice president and general manager of Red Vest Media at Ace Hardware, said on a recent episode [00:02:15] of Next in Media That she thinks retail media needs to re-embrace retail.
[00:02:21] For a long time, we've been attempting to be media companies or really trying to position ourselves as media companies. And [00:02:30] this is just a note from Kiri here. I've heard Molly make this point a number of times over the last year or so, and it is such an interesting philosophical debate that is unfolding between
[00:02:43] Some commerce media [00:02:45] networks like Best Buy Ads, for example, the POV there from Lisa Valentino, the leader
[00:02:51] Is that they want to break free of the constraints of what it means to be a retail media network and just be a media company. [00:03:00] And Molly at Ace has a different philosophical approach, like we are a retailer, we need to put the retail back in retail media. All right, back to Mike's article. Sorry, I'm doing a little editorializing here, but I guess that is my [00:03:15] job.
[00:03:15] In a business where every RMN wants to announce a shoppable ad deal or CTV extension, and most watch with envy as Amazon streams the NBA or Walmart buys Vizio and [00:03:30] Vibe, Molly Gelms' point of view serves as a pretty hot take. Here's another quote from Molly: "Pushing your data unfettered into other environments really divorces your audiences of the meaningful context of how you can grow a [00:03:45] business within that retailer.
[00:03:47] it's not a never for us, but we're thinking intentionally about how and where we're thinking about audience extension."
[00:03:56] Of course, that may make more sense for a hardware seller like [00:04:00] Ace, since people who've recently shopped for high-ticket items like lawnmowers or bone saws may not be as receptive to being retargeted all over the place. Or it may be an admission that there is a ceiling to this [00:04:15] business, which would potentially scream for more alliances.
[00:04:20] For many retail media networks, the smartest strategy is to make their shopper data portable into premium CTV environments through [00:04:30] strong partners," said Goodway Group CEO Paul Frampton-Calero in a recent conversation on Next in Media
[00:04:38] A specialist retailer like Ace or Lowe's, those are not generic audiences. They are valuable [00:04:45] category-specific audiences with real commercial intent
[00:04:49] Paul said in this interview, "At that scale and in those categories, these specialist retailers don't need to become Walmart. They need to make their data [00:05:00] actionable, measurable, and easy to activate where consumers spend time." And that is something that Molly Gelm at Ace agrees with. "I think we can't tolerate hundreds more retail media networks," she says.
[00:05:13] "The ones that will [00:05:15] kind of make it in this environment are the ones that have the scale, the e-commerce scale and reach, the best data on their customers Are manual [00:05:30] processes slowing down your RMN momentum? With GrowthLoop's composable commerce media solution, retail media and ad teams can build and launch precise audiences in minutes, activate [00:05:45] across DSPs and ad platforms, and deliver transparent ROI reporting that drives advertiser revenue.
[00:05:54] learn how retail media leaders at Costco, Fanatics, and goPuff [00:06:00] use GrowthLoop to deliver stronger results for their brand partners fast. Visit go.growthloop.com/breakfast. That's [00:06:15] go.growthloop.com/breakfast
[00:06:18] That's wrapping up Mike's article here, Is Retail Media Kidding Itself?
[00:06:24] as I revisited Mike's article to share with you today, it's sparking off a whole bunch of thoughts for me [00:06:30] based on recent conversations that I've had with RMNs and brands
[00:06:34] The first is that the endemic on-site sponsored product ad type still has this kind of hangover of being a [00:06:45] tax. It still has this shopper marketing
[00:06:48] aura around it
[00:06:49] It's spend that gets baked into a JBP, and brands wanna see a return on it for sure, but it is, in some cases, just a [00:07:00] cost of doing business with a retailer. Now, offsite media spend is a bit more speculative. It comes out of a different budget from the brand side often. And so that is where I think a [00:07:15] retailer, if they're thinking about where the opportunity is, they're looking to perhaps divorce, you know, one type of media investment from another because they know that it occupies, if not a different team's budget at a brand, [00:07:30] a different sort of mentality around what that spend should look like and what it should return
[00:07:36] So it makes a ton of sense if I'm a retailer and I'm looking to grow my ad revenue that I wanna diversify away from [00:07:45] on-site performance-based ad units that
[00:07:48] the performance of those is going to get compared with Amazon and Walmart that have a really well-oiled machine in this space, and chances are I might not come out [00:08:00] too far ahead performance-wise versus those 800-pound gorillas
[00:08:06] Another is that brands have been asking for better measurement, for more measurement, for everything possibly that we [00:08:15] could measure to be measured. And this has created a bit of a prison of our own making ultimately. If we want everything to be measured, we've gotta recognize the limitations of performance metrics, [00:08:30] and that not every retailer and every category is gonna wanna measure the s- things the same way because they have different types of purchasing behaviors that require different look-back periods.
[00:08:44] These are all [00:08:45] genuine arguments
[00:08:47] And I do understand the brand point of view that you want your ad spend to be accountable, to be measurable. You have to
[00:08:54] sit down in a meeting and explain why you spent the money where you did [00:09:00] and what it produced
[00:09:01] There seems to be some recognition on both the brand and the retailer side that measuring absolutely everything with this amazing closed loop sales data that we have might ultimately [00:09:15] be counterproductive in some situations
[00:09:18] One of the clips that I took from a podcast last week was from the ad agency Acadia, who they found a lot amongst a lot of their clients that if you add up all [00:09:30] of the ad-attributed sales from the different retail media platforms that you're advertising on, your sales look a lot higher than what is actually coming in on your own P&L.
[00:09:41] ~Everyone is~
[00:09:41] ~All of these, all of the retailers' models are attributing sales to them~
[00:09:41] All of these retailer models are attributing [00:09:45] sales, whatever sales they can, back to their networks. Of course they would
[00:09:50] As it often is, it's a question about incentives. So I really appreciated this, essay from Mike. I'll link up to the full post [00:10:00] in the show notes here. Thank you for listening, and I'll catch you tomorrow
[00:10:04]