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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
How Nestle Decides Which Retail Media Networks Get Budget
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[00:00:00] Kiri Masters: Last week at LiveRamp's Ramp Up conference, I moderated a panel with Peter Giordano, GM of strategy and Platform at Door Dash's Ads business, and Nicole Lusinsky, director of category and e-commerce [00:00:15] strategy for Nestle's frozen division. We talked about how the two companies work together on commerce media, the campaign planning, the measurement, the data.
[00:00:25] But what's probably most interesting to listeners is how Nicole described the [00:00:30] way that Nestle actually decides where to put its money.
[00:00:34] And this connects to a piece I published last November about Mars's investment matrix, the formal scorecard that their snacks business uses to decide [00:00:45] which retail networks get funding. And which don't. Nicole's comments suggest that this kind of structured evaluation is becoming standard practice among the largest CPG advertisers today.
[00:00:58] I'm gonna recap some [00:01:00] of the comments made on that panel and what we can take away. Let's jump in.
[00:01:04]
[00:01:05] Kiri Masters: Nicole answered a question I didn't even ask, but it is seemingly one that she's been asked a hundred times by the [00:01:15] commerce media networks. She said, yes, we do rank and stack you guys against others. It's really like customer segmentation, but applied to retail media networks. We put you on a grid, a bubble grid, [00:01:30] and we chart you out
[00:01:32] based on sophistication, capabilities, scale and reach. And Nestle isn't just comparing retailers against each other, she said, we're ranking you against Google and [00:01:45] Meta as well. So that is the competitive set, not the other retail media networks, but the walled gardens too. And And this tracks with what Kelly spi, the Global Retail Media Strategy Director at Mars described at the [00:02:00] Path to Purchase Institute conference late last year. She described a two dimensional matrix, evaluating networks on media capabilities and commercial growth potential,
[00:02:11] two different companies, but with a similar logic [00:02:15] scored evaluation rather than just relationship driven allocation. And Nicole made it clear the pressure that she's under to justify every dollar. She said, for every dollar I'm spending, I have to attribute that to a sale [00:02:30] or to a forecast internally. If leadership doesn't know that this dollar is going to produce X, then why are we spending the money?
[00:02:38] Ironically, even at Nestle, the world's largest food and beverage manufacturer, e-commerce [00:02:45] media still has a credibility problem internally, according to Nicole
[00:02:49] She says, we've got brick and mortar figured out. We've been doing that for years and years, but last mile and e-comm, believe it or not, the believability isn't truly there yet. [00:03:00] Some of our leadership still doesn't understand the incrementality piece. Is this an incremental purchase or am I stealing from brick and mortar?
[00:03:09] So when Peter from DoorDash described their ghost ads methodology. Which I [00:03:15] had to ask for clarification on what that meant. This is a higher fidelity holdout study where they simulate consumers in an auction, identify who would've seen an ad, and then withhold it and compare [00:03:30] outcomes.
[00:03:31] That is a ghost dad. And Nicole's reaction to that kind of test was about more than just the enticing campaign metrics. She said, these results are really important because they help us with the narrative internally too. [00:03:45] She takes door Dash's proof points up to leadership where they cascade through the organization and influence future investment levels.
[00:03:54] This shifts who the audience is for incrementality. It's not just. [00:04:00] The media buyer, someone like Nicole. It's also the leadership team that still isn't quite sure that this channel is worth funding. Miracle Ads [00:04:15] is the Ad Tech solution trusted by Rakuten and over 50 global enterprise retailers. That's because Miracle Ads was built with both three P Marketplace sellers and one P suppliers in mind. Both advertiser [00:04:30] audiences demand a seamless advertising journey from onboarding to reporting.
[00:04:35] You can offer everything from sponsored products to video ads all in one solution. Learn more@miracle.com. That's [00:04:45] M-I-R-A-K l.com.
[00:04:48] Nicole was open about where DoorDash started out on Nestle's priority list. She said two years ago, if you'd seen our investment level at DoorDash, it was pennies.
[00:04:59] But they've [00:05:00] proven to be a leader in this space. They've proven their capabilities and she credited transparent feedback in both directions. Nestle telling DoorDash what they needed, and DoorDash really taking on that feedback and building some of those things. [00:05:15] She says they've done the work because we are providing them with transparent feedback and they're building on it.
[00:05:21] Part of that work is data access. Peter described a food graph built on 13 years of purchase behavior [00:05:30] across 56 million monthly active users, increasingly available as self-serve insights to brands. Nicole's team has used it to spot things like. Food trends like Indian cuisine is [00:05:45] trending in delivery occasions, or breakfast is emerging as a growth category, and these signals actually feed Nestle's product innovation pipeline one to five years out.
[00:05:57] So this kind of data goes well beyond [00:06:00] the strategy of targeting and campaign development. It also goes into product innovation. Wrapping up here, the formalization of retail media evaluation keeps coming up between Mars' Investment [00:06:15] Matrix, Nestle's Rankin Stack Grid, and other guidance from entities like the A NA and the IAB.
[00:06:22] The pattern is clear. The largest CPG companies are building structured frameworks for these decisions. That [00:06:30] doesn't mean that smaller brands are doing the same. In fact, they can and perhaps should operate on a different playbook. But it does suggest that any retail media network selling to the top. 20 or so CPGs [00:06:45] should probably understand where they sit in these grids and what, um, x and Y axes do these grids have.
[00:06:55] Nicole's comment about competing against Google and Meta not just other [00:07:00] retailers, is one, I think the industry. Might not have fully absorbed yet. The conversation among retail media networks tends to be about differentiating from each other, but from the brand side, the comparison set is actually wider than that.[00:07:15]
[00:07:15] And the incrementality credibility gap inside large CPGs is something I hear about a lot. And Nicole said it very. Plainly that Nestle leadership is still questions whether e-commerce spending cannibalizes, brick and [00:07:30] mortar. This puts a finer point on why measurement isn't just a media optimization tool, it's also a persuasion tool.
[00:07:38] Thanks for listening, and I'll catch you next week.
[00:07:41]