Latest / Retail Media Breakfast Club / Multi-Retailer Networks [Livestream Highlight]
Transcript
- Syndication & Programmatic: Where Retail Media Goes Next [Livestream Highlight] === [00:00:00] Kiri Masters: Last week on LinkedIn, I did a live stream with Andreas Refin, the co-founder and CEO of Adtech Company, Penta Leap and we had a great conversation with lots of audience input around trade spend versus [00:00:15] retail media, [00:00:15] But halfway through that conversation, we stumbled onto something that was even more fascinating that I've been meaning to cover for a while, which is the emergence of true multi retailer advertising network. Now, this is a big shift in how [00:00:30] retail media is structured. It's still very nascent, I think it's a really interesting trend to pay attention to. Instead of brands managing dozens of siloed relationships with individual retailers for their ad spend, we're starting to see emerging platforms where [00:00:45] multiple retailers band together, or where tech providers enable smaller retailers to plug into shared infrastructure. [00:00:51] And that's solving one of the biggest pain points that I hear from media buyers, which is. The crushing complexity of managing campaigns [00:01:00] across fragmented systems. In this conversation, we dig into a little bit of the historical model [00:01:06] Of ad networks that existed before Amazon's dominance fragmented everything. And we get into some specific examples, like Amazon's retail ad service with Macy's, [00:01:15] Instacart, carrot Ads, and Best Buy's ambitions to become a platform for other retailers. [00:01:20] Let's jump into that snippet from my live stream with Andreas at Penta Leap. [00:01:25] [00:01:26] Kiri Masters: So Andreas and I, I'd love to assist, [00:01:30] start talking about what are the fixes here, because, you know, thi this is as we, we've, we've barely scratched the surface on this. And I do have a re sort of a reading list of people who've attended because there is a lot more detail to dig into, um, [00:01:45] that, that, uh. [00:01:46] We're not able to cover in this call, but what can, what can retailers do about this and maybe what should the media buyers be pushing for? [00:01:59] Andreas Reiffen: So [00:02:00] as a media buyer, you, you need scale and, um, it's, um. If you, if you go direct retailer by retailer, it's hard to execute a media play. And we see both [00:02:15] sides. [00:02:15] Retailers struggle to sell true media to brands. And brands struggle having so many conversations with different retailers. Right. Um, I, I think a solution that we. Come [00:02:30] see, come to life right now is that this game is turning into something that is, um, more of a programmatic like buying experience. And this should not be confused with general [00:02:45] RTB and non-endemic ads like retailers cluttering websites with random ads. [00:02:50] But the question is, can a brand that spends money on Amazon, and I take this example because that's like you [00:03:00] may have seen the press release from Amazon about Macy's, um, they want to allow the Macy's brands, um, to also spend within the Amazon ad system and still target [00:03:15] Macy's onsite inventory and um, in. [00:03:18] Such a case if ad networks manage to gain traction, the media buying experience will be entirely different. Because you put money into [00:03:30] whatever system where you spend already. This could be in the future Google search. This could be, um, on the Amazon side where you execute the Amazon campaigns, but also a network of different retailers. [00:03:43] And, you know, [00:03:45] such a, um, new ecosystem would not mean that the, the old one, what we have today would be replaced. It would simply be complimentary. And if you see, if I'm a [00:04:00] whatever home improvement brand and sell through Home Depot, and that's a strategic retailer for me, I want to go direct. And it's so important for me that I don't wanna spend this money in a network. [00:04:11] But if Home Depot is one out of. [00:04:15] 10 different retailers for me, right? I, I need something that is easier and I would want to put my money into one system and spend it across a network. And I think we will have those two approaches where something more [00:04:30] programmatic like will complement the, um, methodology or the, the approach the market has taken today. [00:04:40] Kiri Masters: Hmm. I agree. And, and again, speaking with. [00:04:45] Large CPGs with large budgets. Um, I, I've, I've, I've asked some of these companies, what would it take for you to increase the number of rands that you spend at. Um, if you could make wave a magic [00:05:00] wand and like 10 more rms had the capabilities that you're looking for and the scale that you're looking for, that's the big thing that they're, they're looking, that they're seeking, as you mentioned. [00:05:11] Would you go and spend more budget on, um, 10 more [00:05:15] rms? And I, the answer is no, because just of the complexity of managing across multiple systems of the pain of, you know, doing the planning, the [00:05:30] buying, and then the reporting across all of those different systems, and they measure things differently. And the windows are different. [00:05:38] It is such a pain. Um, so even, even if there were suddenly 10 [00:05:45] more RMNs at scale in a category, a lot of these, even these big spending brands don't want to be managing so many channels. [00:06:00] Shoppers don't think in silos. They bounce between online and in-store without skipping a beat. Acosta Group's. Connected Commerce agency helps brands unify trade and retail media budgets to invest where [00:06:15] shoppers are most likely to convert, whether that's on mobile or in the store aisle. Learn more about acoa Group Connected Commerce at ACOA Group and let them know Retail Media Breakfast Club sent you. [00:06:29] That's [00:06:30] A-C-O-S-T group. [00:06:34] Kiri Masters: Now this is the core problem that's driving the network model trend, and when Andreas mentioned Amazon and Macy's, he's referring to Amazon's retail ad service. This is [00:06:45] where Amazon is essentially syndicating its ad infrastructure to other retailers. ~Macy's was the first major retailer to join~ [00:06:49] ~Macy's recently joined. ~Macy's recently joined Amazon's retail ad service, and what that partnership looks like is it allows advertisers to buy sponsored product placements on macy's dot com directly through the [00:07:00] Amazon ads console. But Amazon isn't the only player here. [00:07:03] There's actually three distinct network models emerging, [00:07:07] and Andrea started listing them when an audience member asked a great question. [00:07:11] Andreas Reiffen: I see a question from Brett, um, coming in. Yeah, let's pull it up. [00:07:15] Is this similar to, um, to Instacart what, um, Instacart is doing with Carrot ads and answer is yes. [00:07:23] Look, we have many, many companies now in that, um, that, that are contenders to. [00:07:30] Um, play that game. And like Criteo has a product that is called Commerce Max. Um, Instacart has the, um, carrots ads, carrot ads ad network. Um, we have clearly Google search, which [00:07:45] could be massive if they get access through RTB and they could place ads. [00:07:50] We have, um, a lot of budget sitting in, um, trade Desk, and we talked about Amazon. We can also expand this, what happens. Why isn't [00:08:00] Walmart launching an ad network, or why isn't Home Depot doing this and selling to smaller home improvement companies? So everything will be an ad network at some point of time. [00:08:11] And that's what [00:08:12] Kiri Masters: actually Best Buy. When they did that big [00:08:15] showcase, Lisa Valentino specifically said, and I dug into it. I was like, I heard what you said about becoming an ad network, like a true ad net network with multiple, um, you know, partnering with other retailers. And so I'm, [00:08:30] I'm not sure. I haven't heard any news of anyone onboarding with that, but that is their ambition as well. [00:08:35] Andreas Reiffen: It, it makes total sense. We have, um, a German client who also wants to build an app network with us. Why? Because [00:08:45] again, back to the scale problem, you, um, none of those smaller retailers have enough. Scale if you compare this with a Google or Meta and TikTok. So like some sort of syndication makes a ton of sense. [00:08:59] And the [00:09:00] irony is this is where we all come from. We just killed that ad network approach. When Crypto acquired HO Logic, this was an ad network. In the meantime, Amazon had grown big and everyone wanted to [00:09:15] copy Amazon. So, um, it's. Absolutely ironic that it's Amazon now that tries to fix the problem that they accidentally created in the market. [00:09:29] The [00:09:30] whole fragmentation problem with the ad network approach, but it's clear. That what we have today is not what the ecosystem will look in the future. It's also not that private markets, direct [00:09:45] sales will disappear. There will be a balance of the two and um, a coexistence of those two mechanisms. [00:09:52] [00:09:53] Kiri Masters: That fragmentation problem that Andrea's described, where brands are exhausted, managing dozens of [00:10:00] retailer relationships isn't going away on its own. These emerging network models represent an attempt to fix what the rapid growth of retail media broke, whether it's Amazon's centralized approach. [00:10:14] [00:10:15] Instacart's White Label Technology or Best Buys collaborative vision. The common thread is scale and simplification, and what I love about this conversation is this historical irony for essentially coming full circle back to ad [00:10:30] networks just with better technology and first party retail data. Now it'll just be a big question. [00:10:36] About which model wins or more likely how they'll coexist. So thanks again to Andreas from Penta Leap for this [00:10:45] great conversation. And if you want to dig deeper into these network models, I'll link up to the blog posts that accompanies this episode. [00:10:53] And if you wanna hear more of the conversation around trade spend versus retail media, you can watch the full replay [00:11:00] of the live stream. We'll link up to that in the show notes as well. Thanks for tuning in, and I'll catch you tomorrow. I. [00:11:05]