Latest / Retail Media Breakfast Club / Trade vs. Retail Media: Who's Really Eating Whom? ['Snips' from Particular Audience & The Middlemen]
Transcript
- Trade media vs retail media: who's eating whom? === [00:00:00] Kiri: The retail media world is wrestling with a fundamental question. Is retail media eating trade marketing or is trade marketing absorbing retail media? ~Two, industry insiders offer seemingly~ [00:00:10] ~two industry insiders office. ~Two industry co-founders offer seemingly opposite perspectives [00:00:15] on this topic, and their answers reveal as much about their businesses as the market itself. James Taylor runs particular audience, an AI platform that monetizes onsite search and recommendations, so he champions the shift of supplier [00:00:30] dollars into measurable RMN formats. Troy Townsend runs Cher, a unified front door that catalogs trade and media across onsite, offsite, and in-store. Anchored two merchandising. So he argues trade [00:00:45] logic should own RMN, same dollars, different operating systems. [00:00:50] [00:00:51] Kiri: Let's start with James Taylor's perspective. [00:00:53] He has a front row seat to watch supplier dollars migrate from opaque trade agreements into [00:01:00] measurable digital channels. His platform, particular audience powers the AI that turns product searches into ad revenue, so he sees exactly when and why brands reallocate budgets. Industry data backs. His [00:01:15] thesis, Forrester research shows that 36% of US retail media spend now comes from trade budgets with another 26% coming from shopper marketing. [00:01:24] That's over 60% of RMN revenue flowing from what used to be handshake deals [00:01:30] and promotional allowances. [00:01:31] Let's listen to James making his case at the DM Xco 2025 event. [00:01:36] James Taylor: trade budgets in the US alone, just in CPG, are estimated to be about $1 trillion on their own. Um, [00:01:45] and there is a, uh, extremely tangible, uh, amount of that budget that is flowing into retail media, uh, and with really good reason. [00:01:55] Uh, retail media is transparent. It is hyper targeted. Uh, the [00:02:00] data is there on, uh, who's clicking, who's purchasing. Uh, it's fully attributable back. Uh, and there are, uh, believe it or not even incrementality measures, uh, in contrast to legacy trade, which is more opaque, more fixed, tenancy based. [00:02:15] And quite frankly, uh, a lot of brand CFOs now, they've had a taste of retail media, do not want to funnel quite as much money into shopper and trade marketing. [00:02:27] Um, so you can see here that, uh, you [00:02:30] have the, uh, portion of trade that's already flown into retail media. Uh, so they reckon about there's over 50% of, of retail media revenue today is from historic trade and shopper budgets probably more. Um, and then there is of course, net new budget as [00:02:45] well. There's incremental spend. [00:02:46] There's brand budgets, agency budgets, uh, now increasingly demand side platform, uh, budgets flowing in. Uh, and that is gonna continue. Uh, and the estimate for retail media, which is $170 billion today, [00:03:00] uh, by 2030, will be at $280 billion. Um, so beyond that, you know, is there a path to just fully eating trade? [00:03:07] Uh, I, I believe there is. [00:03:09] [00:03:10] Kiri: So James's argument is straightforward. Transparency [00:03:15] wins. When CFOs can see attribution versus funding vague co-op agreements. Retail media easily captures the budget. Shoppers don't think [00:03:30] 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 shoppers are most likely to [00:03:45] 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. [00:03:57] That's A-C-O-S-T [00:04:00] group. [00:04:02] Kiri: Now Troy Townsend's Company, Zitcha sells the system that turns messy trade inventory into a productized ad business. So his bias, if you will, is that trade logic and merchant ownership [00:04:15] should subsume retail media, not the other way around [00:04:18] ~This isn't retail media eating trade, it's trade eating. Retail media trade dollars aren't going away. They're just modernizing. The real split isn't, sorry. Let me just redo that.~ [00:04:18] ~In an interview on the Middlemen podcast a few months ago, Troy spoke with the host of that show, Todd and Tom, about this dynamic, and made the argument and, and the hosts made the argument that~ [00:04:18] in an interview on the Middlemen podcast a few months ago, Troy spoke with the host of that show, Todd and Tom, about this dynamic, and the hosts made the argument that this isn't [00:04:30] retail media eating trade. It's trade eating, retail media. Trade dollars aren't going away, they're just modernizing. [00:04:36] And what we're really talking about is endemic versus non-endemic spending. The endemic dollars have always been trade, and they're just adopting [00:04:45] digital formats now. So a little bit of background on Troy Townend troy actually spent a decade in the meta advertising ecosystem helping small businesses scale their Facebook campaigns. [00:04:55] And when Meta approached him about their retail collaboration ads product, he saw the bigger [00:05:00] opportunity, which is retailers sitting on mountains of ad inventory, both digital and physical, with no unified system to catalog or sell it. So here's Troy describing what that inventory actually looks like and why unifying [00:05:15] it matters. [00:05:15] Todd Z: Obviously a lot of retailers live in in margins, which is why retail media is so attractive to them. And so how much of that is, do you think you're, what you guys are doing in terms of working with retailers in terms of helping them identify and unlocking new. Inventory. [00:05:26] Troy: Yeah. I think even their old inventory getting a view [00:05:30] of what the utilization is. [00:05:31] It's just really basic stuff. [00:05:32] Tom Limongello: Let's talk about the old inventory. My favorite, the shelf wobbler. [00:05:35] Troy: Yeah. I never thought I'd be do, what the hell is a shelf wobbler? [00:05:38] Todd Z: Top to the retail guy and I'm ATech guy. And so it's, yesterday we learned that the printed coupon sheet at the front of a store is [00:05:45] called an Ironman. [00:05:45] And I'm like, okay, I've never even know that, but my favorite. [00:05:50] Tom Limongello: Flexible piece of plastic, and then the little signage that hangs off it, it wobbles. [00:05:54] Troy: The wobbler that hang. That's too hilarious. On edge of shelf. Yeah. So I never thought I'd be building a, it's [00:05:59] Todd Z: a technical term. [00:05:59] Troy: Yes. [00:06:00] Okay. [00:06:00] Yeah. So I never thought I'd be building a functional, ad tech to deliver shelf wobblers. I think one of [00:06:04] The things for us is that visibility for the retailer is really important. Visibility means they actually know what they've sold and what they haven't sold. And we see the trajectory on two paths. [00:06:14] And one [00:06:15] of the things that having a unified front door gave us the ability to see was for RMNs to really work, they're gonna have their RMN teams that have typically sat within e-comm, Ecomms being the major driver of RMNs. But now as they're starting to [00:06:30] unlock the store, they're unlocking the merchant and the relationships that the merchants are having on joint business planning and being able to see that long term view. [00:06:38] So what's sold in through joint business planning. And then what are the opportunities for the RMN teams to sell up? up and [00:06:45] down and across that inventory as well. We believe that for RMNs to have long-term value, those two things need to work really well together. And there's typically friction that sits in that relationship between the merchandise merchandising team and the RMN teams because it's [00:07:00] not, are you selling just a new form of media that I should be selling within my joint business planning? [00:07:05] We believe that unlocking that and being able to see that in one spot is where we actually get the value creation of. What inventory can be sold. Having sold certain things within your joint [00:07:15] business planning, how do you then lean on the retail media teams to then sell that inventory so you, you're not robbing Peter to pay Paul, when I've just got visibility on the bucket of money that, that I'm selling over here in retail media and you're not seeing in the merchandise [00:07:28] Todd Z: structure. [00:07:29] [00:07:30] Kiri: So Troy's point here is pretty practical. Without connecting retail media to the merchant driven J VPs that still govern supplier relationships, you're just shifting dollars between line items. He then takes it a little bit further arguing that [00:07:45] organizational structure is gonna determine [00:07:47] whether this convergence succeeds or fails. Here's his view on where retail media needs to live. [00:07:53] Troy: I think the big thing that I've found really diving into this space is that this is led by the retail. I think there's a lot of media [00:08:00] trying to push into the space, but you cannot take this out of the retailer being the first core part of. The second part of media. That's why in, in my view of like, where does this live typically, buying in from the top down is obviously a critical thing for retailers to be [00:08:15] successful. [00:08:15] My view is long term, I think the merchant teams will own this. I just think it's just a natural thing. It's a core function of retail and for anything to be a core operating process, it needs to be driven by the core structure of what the retail does, and I think. I think we've got a lot of retailers that it [00:08:30] sits outside of that, and I think we're starting to see some larger retailers go actually retail media and merchandise needs to be at the table at the same time. [00:08:38] But who owns it? My view is that it probably should be living with the [00:08:41] Todd Z: merchant. [00:08:41] [00:08:42] Kiri: And this isn't just org chart politics. It's [00:08:45] about whether retail media becomes strategic infrastructure or remains a revenue sidecar that's disconnected from how retailers actually do business with suppliers. So who's right here? Is trade eating retail media, or is retail media eating trade?[00:09:00] [00:09:00] Both parties are describing the same collision from different vantage points. James Taylor accurately tracks the dollar migration from opaque trade into measurable retail media channels, a shift that his platform enables and [00:09:15] benefits from troy Townsend correctly identifies that this represents trade marketing, modernizing, but not disappearing. [00:09:21] And his system is built to manage that convergence by cataloging everything from sponsored search to shelf wobblers under one roof. The retailers [00:09:30] who win won't waste time debating which function is eating the other. They'll build ~unified systems that connect retail media to merchant strategy.~ [00:09:34] ~They'll be the ones building ~unified systems that connect retail media to merchant strategy, cataloging every sellable asset and proving value through measurement. The future belongs to those who embrace convergence [00:09:45] over turf [00:09:45] was. [00:09:46]