Latest / Retail Media Breakfast Club / The Retail Media Doom Loop
Transcript
- Episode 1 - Retail Media Doom Loop === [00:00:00] Welcome back to the Retail Media Breakfast Club. I'm your host Kiri Masters, and last week I did something pretty fun with a couple of other podcasters in the retail media tech space, a show that I've been nerding out on called The Middleman [00:00:15] And the host of that show, Scott Messer and Tom Liman. [00:00:18] Jello and I did a live stream on LinkedIn, which we called Retail Media Tech Jam, and we dissected the backbone of retail media networks and why media [00:00:30] buyers should care. We actually got a pretty great turnout of our listeners on that live stream and some really great questions from the audience. [00:00:39] So I'll link up to the full replay in the show notes, but I also figured on [00:00:45] sharing a few snippets of that conversation right here on the podcast, just in case you don't have a spare 45 minutes to check the full thing out. and by the way, if you haven't discovered the Middleman yet, you're missing out. [00:00:56] Tom and Scott are career ad tech [00:01:00] experts who've turned their big brains to retail media. And what I truly love about their show is how they bring in current retail media leaders and really weave together war stories and history lessons from the trenches with [00:01:15] hard won lessons from advertising's past. [00:01:18] But for today's conversation, what I've pulled out from that session is something that's been driving me absolutely crazy why retailers are so secretive about their tech stacks and whether that [00:01:30] secrecy is actually sabotaging their own growth. [00:01:34] I brought in some fresh poll data that I ran of 67 brand side media buyers who are begging for transparency. And Tom and Scott were able to help [00:01:45] connect the dots to show us why we've actually seen this movie before. [00:01:48] Alright, let's jump in. [00:01:50] [00:01:51] Kiri Masters: So I call it the retail media doom loop. [00:01:53] Ah. And so it, it goes like this. So Amazon and Walmart command the lion's share [00:02:00] of retail media today for. quibble over the percentages, but everyone more or less agrees with that. Okay. So retailers get bought into the big vision of retail media. It's super profitable, it's the thing to do. [00:02:10] Everyone's talking about it. Um, so they stand up a business and a team. Yep. And then [00:02:15] to Jordan's question here, actually, a lot of the initial retail media revenue is kind of, maybe not deliberately, but it is siphoned off from trade media and shopper marketing into retail media. So initially, is it [00:02:26] Tom Limongello: incremental? [00:02:26] Yeah, [00:02:27] Kiri Masters: it's, it, there's a big, there's a big, like, you know, growth spur. [00:02:30] Initially they see some quick wins, then growth slows because the trade dollars run out. And then the, the retailer doesn't wanna invest in new technology or hire the experienced. Salespeople or the ad tech people because this, yeah, the growth is slowing [00:02:45] and then like the, it kind of rolls to a stop. [00:02:46] What do you think? I mean, [00:02:47] Tom Limongello: I think it's, yeah, initially everybody's been aping Amazon from the sponsored search, uh, introduction in like 2014 to 18 saying, oh, we can, we can increase roas, but you can't increase ROAS forever. If you start with a [00:03:00] situation where you have products in a search grid that show up initially when there's no sponsored placements. [00:03:05] There is a real opportunity to create high initial roas, but then over time, if it becomes a competitive market, then everybody's spending, and then you sort of go back to [00:03:15] where you were at the beginning. But if you look at offsite and other channels in store, if you're digitizing it. Um, there are places where ads may not have been before, where you can really bring in, uh, real incremental opportunities for [00:03:30] awareness or mid-level awareness. [00:03:31] Um, and I think that's where if that, you know, if, if they're scaling this demand from the initial onsite to offsite, that could really work. And that's sort of where, where we started. Right. Kiri? 'cause you said, you know, off, it's always onsite first and then offsite. I think a lot of the smaller retailers.[00:03:45] [00:03:45] Started with minimal traffic onsite, started offsite and realized this early, early on. Um, but they were probably doing it with like a turnkey ad server. Yeah. Uh, you know, vendor where they didn't do that business transformation in-house and maybe they're stuck. [00:03:58] Kiri Masters: Mm-hmm. [00:04:00] Yeah. So just to, to put a point on, on Jordan's question before, before we move on. [00:04:05] Um. The, this demand question on the, on the retailers side is, you know, there's the, the growth has slowed. The, the rate of growth has slowed, [00:04:15] right? Um, so is there, yeah. Is there, is there enough juice for the two hundred and thirty eight, two hundred forty eight other retail media networks to continue to, to scale? [00:04:28] Scott Messer: I think I, I think I, I saw Jordan's [00:04:30] question a little bit differently, and I think it's, uh, for, for Jordan, it's, uh. Are buyers putting enough pressure? Are brands putting enough pressure on retailers to require an upskilling of talent and demonstrating performance? [00:04:44] Sort of saying that, you [00:04:45] know, a lot of the money just came from strong arming you into, uh, spending in the retail media network if you wanted to continue having your products in store. Um. And like they haven't been demand, they haven't had enough demanded of them yet. And that's a really interesting, and I think that's sort of the question here is like, [00:05:00] what's the buyer's POV of the tech under the hood? [00:05:03] And it's not just the tech, it's also the people and the culture and the process that sort of gets into it. Um, 'cause you don't know what you're buying always when you get into these retail media networks, you just know you're handing over a chunk of money to somebody [00:05:15] to do some marketing for you. When your time, budget and team are already maxed out. Keeping up with retailer platforms and media requirements can feel [00:05:30] like a never ending labyrinth. That's why even the best brands bring in an execution partner. [00:05:36] Acosta Group makes retail media execution simpler. They stay ahead of every platform. Update tech shift. And [00:05:45] media spec, so your campaigns actually show up and perform without draining your team. [00:05:51] Let Acosta group handle the chaos behind the scenes so you can keep building the brand. Check out Acosta Group and tell them [00:06:00] Retail Media Breakfast Club sent you. That's A-C-O-S-T group. [00:06:05] [00:06:07] Scott Messer: Well [00:06:07] Kiri Masters: actually, I, I, I ran a, I ran a survey, uh, a couple weeks ago, 67 respondents. I did say brand [00:06:15] side buyers only. That's a lot for [00:06:17] Tom Limongello: a brand. [00:06:18] Kiri Masters: I had to weed out all the ad tech people that jumped in and voted. So anyway, this is, this is all brands. I tracked every single, uh, person. And, um, my que like this. [00:06:26] This kind of drives me crazy 'cause I do talk with a lot of, um. Tech [00:06:30] providers out there who are not allowed to talk about. Who is using their technology. And to me it seems a little, um, uh, counterintuitive. Like if, if, if you're a retailer and you're investing in technology and you're [00:06:45] stewarding your brand's media dollars. [00:06:47] I would wanna be out there talking about investments that I'm making and ad serving and relevancy and reporting. So I don't understand it. And I, I was curious, did media buyers feel the same way? Do they feel like if they, if [00:07:00] they knew a little bit more about what was going on in terms of the pipes, would they, would that influence their decisions [00:07:05] Tom Limongello: yeah, I mean, we had a good episode with, uh, Eleanor Hayden from Hayden Consultancy, and she gave us a lot of the sort of. Differences that she saw between retailer and media networks on the, in the [00:07:15] onsite world. So it was, you know, target and Walmart gave real, um, you know, granularity in terms of the types of placements and carousels that you could buy. [00:07:24] And so that was interesting for me to see, you know, like that's something that a real brand buyer wanted. [00:07:30] Um, whereas I think a lot of the smoke and mirrors around. You know, it is all about, is it all gonna be about clean rooms or whatever. And most of the brands that I've talked to have said, you know, AMC's really good. [00:07:38] You know, I got a five year look back from Amazon. Mm-hmm. Um, and most of these brands aren't really leveraging it to the way that they should be or could be. [00:07:45] So it's probably not, it's, that's probably not it. But I, I think we should talk about this is sort of where the buyer's checklist would come through, which is like, what are the things that a tech provider could do that would make it a different proposition? [00:07:57] I mean, in my, my, my initial, uh, [00:08:00] thought is that, um, some of the areas where, you know, if we are in this sort of doom loop that everybody is sort of maybe invested in onsite and doesn't know where to go to next, um, really where the challenge would be is does the ad tech provider have a sort of unified [00:08:15] platform? [00:08:15] To be able to move budget in a more agile way away from non-performing channels. Because I think one of the challenges with retail media networks is that because they may not have either the top talent or tech, they are looking at things in a very [00:08:30] rigid way where they're, you know, you're booking mobile, you're booking digital at a home or whatever, and they're kind of like stuck. [00:08:34] These budgets are not fluid. Um, and that's probably gonna remove some of the performance possibilities you could have. So if I were on the brand side, or if I were a media buyer who had, you know, access to, you know, the, these [00:08:45] budgets, that's what I would want to be able to do. [00:08:47] Scott Messer: Hmm. So it's a good little rabbit hole for us to, to dive into, but I think when you look in like the, the broader context of our, our conversation, um. [00:08:57] You know, what are, what is the buyer's POV on, on [00:09:00] tech, right? And there's so many different ways to get into this. And, um, you know, across our, our entire conversation here, I've been thinking about the parallels to regular media and how does this affect, um, brands, retailers, and across the top, which is what our conversation is [00:09:15] today. [00:09:15] Um. And I don't know, I, one thing I wanna posit to you is like, what people say in a poll is very different from what they actually do during the day. You got me, and as a, as a media seller, I've [00:09:30] learned this because, you know, you, you hear a lot of the, oh, we want transparency, we want fraud free, we want all of that. [00:09:35] And then they go, yeah, yeah, yeah, but can you just go spend my money? And tell me, tell me what I got as a roas. [00:09:41] [00:09:42] Well, we're gonna leave it there for today. [00:09:45] Hope you enjoyed this little segment from the Retail Media Tech Jam Livestream event. Tomorrow we're gonna play a little bit more of this conversation and I'll link up to the full replay of the live stream in the show notes as well.