Latest / Retail Media Breakfast Club / Rocks, Pebbles, Sand: Retail Media Eras (Part 2 of 2)
Transcript
- Why good retailers make bad adtech decisions (part 2) - PUBLISH THURS SEPT 17 === [00:00:00] Kiri Masters: Good morning and welcome back to Retail Media Breakfast Club. Yesterday I shared the first half of a piece that I wrote for my column at The Drum about the different eras of retail media. And I shared how [00:00:14] we [00:00:15] have an evolution playing out with retail media as being built as a monolithic all-in-one ad platform like Amazon was able to. We [00:00:26] Then had the advent of specialist retail [00:00:30] media tech companies like CitrusAd and Criteo enabling everyone else with an all-in-one kind of solution [00:00:39] which consolidated demand and supply [00:00:42] in a simple, easy-to-buy solution [00:00:45] for retailers [00:00:46] Certainly go back and listen to part one if you missed that yesterday. But part two, we're coming [00:00:52] Around to a little refinement of this concept, which is that technology and eras of [00:01:00] technology aren't the only axis of which to look at the broad landscape of retail media capabilities on the market today. [00:01:09] [00:01:11] Kiri Masters: And for this part of the article, [00:01:15] I drew on an interview on the Retail Media Therapy podcast, which is excellent, and I recently played part of this interview on the show on a different topic about RMN aggregators. [00:01:29] But I [00:01:30] wanna call out something else that Dean Harris, who is the head of Co-op Media Network, said, which is [00:01:39] Also establishing different types of RMNs, not in a [00:01:45] era of technology context, but end states for networks. And he buckets them up into rocks, pebbles, sand, and a couple of bonus ones that we'll get to. But starting [00:02:00] with rocks, these are the scaled walled gardens, and he, he doesn't mention them by name, but we know who he is talking about. [00:02:08] The default line item in most media plans, huge audiences, online and [00:02:15] offline, first-party data [00:02:17] capturing the lion's share of retail media ad spend today. Then we have pebbles. These are the specialist RMMs. In Dean's words, these [00:02:30] are the catalysts, the cherry on the cakes for a lot of media plans. What a plan can't get from the rocks, which might be specialist audiences [00:02:43] Where I might want to put a test and learn [00:02:45] budget, et cetera. Then we have sand. Sand is the low-cost reach extension, the long tail, access through aggregation. These are [00:03:00] audiences I might not, as a media buyer, wanna go out and buy myself They're really an add-on to what I'm already doing. I'm not gonna wanna go to a ton of effort to buy these audiences [00:03:15] specifically. [00:03:15] And then there's a couple a couple of bonus ones that Dean throws in there. One is the squeezed middle. This is the unsustainable one, and he calls, uh, out those networks that are quite reluctant to aggregate [00:03:30] but don't have the differentiation and don't have the scale. He describes these networks as struggling to get agency attention, struggling to get repeat purchase, and knocking, still knocking on the doors So [00:03:45] these are the networks without a plan. [00:03:47] Now Co-op, it's worth noting Co-op's network is run by Three Hold, whose parent company SMG launched a retail media exchange of its own this year, and that was something that we talked about [00:04:00] in a recent episode of this show, if you wanna go back and listen to that one [00:04:04] So yesterday we talked about eras. Today we're talking about, end states, and if you put those two things next to each other, we get a more [00:04:15] complete picture [00:04:16] Realistically, something like composability, tech composability is a strategy that's only accessible for rocks or large pebbles. [00:04:30] is within reach for maybe a dozen US retail media networks [00:04:34] Now the easy button is a sand strategy. The strongest argument for an all-in-one tech solution isn't just that it's simpler, it's also this [00:04:45] network effect. It is immediate access to brands who are already buying media through a Criteo or an Epsilon, whether that is directly interfacing with those [00:05:00] companies or through a Management platform like Sky or PackView that integrates with those companies. [00:05:07] These are the earliest and most successful examples of aggregators around [00:05:13] And it remains a [00:05:15] very, very good option for lots of retail media networks. The squeezed middle that Dean talks about is a version of this retail media doom loop that I've been writing about the last year or so. These [00:05:30] aren't networks that couldn't afford technology, but they are networks that bought a Era 4 ambition on an Era 2 budget while neither having scale nor differentiation. [00:05:45] poor audience targeting is frustrating, but for retail media teams it can be costly too. With Growth Loop's composable commerce [00:06:00] media solution, you can turn your first-party data into hundreds of high-value audience segments and launch campaigns faster. After partnering with Growth Loop, instant commerce pioneer [00:06:15] Gopuff scaled from a hundred syndicated audience segments to more than six hundred, and now it takes less than forty-eight hours to turn around a custom segment for one of their brand partners. [00:06:29] Learn [00:06:30] more about how Growth Loop is powering Gopuff's best-in-class retail media operations at go.growthloop.com/breakfast. That is [00:06:45] go.growthloop.com/breakfast [00:06:49] Now, over at Ace Hardware at Redverse Media, Molly Gelm, the leader of Redverse Media, has been unusually direct about choosing position [00:07:00] or proposition first. She said in an interview that I did with her last year, "I think advertisers are tired at this point. They are leery of retailers building technology, building UI, UX, and [00:07:15] building highly customized measurement within their walls." [00:07:19] And so that philosophy is the basis for Ace's own tech decisions. But she's equally clear that that isn't universal advice to everyone. There's retailers that have already invested [00:07:30] in data science teams and CDPs, and they might need a different approach. Now, none of this makes what is now coming on the market in terms of technology an irrelevant question. [00:07:42] GrowthLoop, who I mentioned yesterday [00:07:45] as having launched a RMN in a box kind of solution, which is pre-integrated with a bunch of other different ad tech providers in the value chain. When I spoke with GrowthLoop's head of product, Soma Simpson, [00:08:00] she calls this the era of no more crying which I loved. No data leakage, no pipelines to maintain, campaign results flowing back automatically, audiences built in minutes rather than in weeks. [00:08:13] And one [00:08:15] sort of instigator for a ~re-re-revision~ re-re-revision amongst retailers of their tech stacks is the acquisition of LiveRamp by Publicis, which sent a lot of retailers back to their identity stacks looking for [00:08:30] this kind of control. But while this pre-plumbing kind of setup lowers the cost of integration, it doesn't lower the organizational cost. [00:08:41] And the organizational cost is what stops a [00:08:45] lot of these initiatives cold. It assumes that a retailer is already operating a cloud warehouse, that they already have a data team and identity infrastructure. And I mentioned in my intro to [00:09:00] yesterday's episode this story that a leader at a mid-sized retail media network told me about how they couldn't get their ad server swapped out, even though the ad server was not built for a retail [00:09:15] environment. [00:09:15] It was built for a traditional publisher and causing all kinds of manual workarounds that needed to be done every couple of weeks. They couldn't get a new ad server approved internally. No amount [00:09:30] of pre-integration solves for that kind of inertia that's happening within organizations that are at different sort of stages or eras in their own journey that [00:09:45] might be based on the economy, their own financial performance, so many different factors there. [00:09:52] Now also want to call out that there can be a little bit of an echo chamber in this industry where a lot of these questions get asked [00:10:00] from the retailer's side, what's best for the retailer? But we must also talk about what the buyer wants. What does the media buyer want? [00:10:09] And while they seem to want a lot, and we talk a lot on this show about what media buyers want, and that is a [00:10:15] topic for some other episodes, I can say what they don't want is twelve interfaces to, to log into. twelve buying platforms, twelve DSPs, brands they're already consolidating [00:10:30] through management platforms like Sky and Pacvue or DSPs like The Trade Desk or Amazon DSP or DV360 because buying across multiple networks is [00:10:45] undoable. [00:10:47] So coming back to this interview with Dean Harris from Co-op, he didn't talk about technology at all. He says, "We have always done proposition before [00:11:00] products." And a lot of people that went into re-retail media went in with a, " I need to get a product live" statement rather than asking, "What is our proposition?" [00:11:13] and Dean is [00:11:15] unusually clear-eyed about where that actually leaves Co-op. He says, "We've got to leave our ego at the door and know where we sit in the media plan." And that's something I think that a lot of retail media network [00:11:30] leaders aren't prepared to acknowledge candidly and what I, one thing that I appreciated about that conversation [00:11:38] And that is where I'm gonna wrap up for today in this two-part series about the eras of retail media [00:11:45] Why good retailers make bad ad tech decisions. Thank you so much for listening, and I'll catch you next week [00:11:51]