Latest / Retail Media Breakfast Club / Retail Media 3.0: Why AI & Agentic Commerce Could Spark the Golden Era of Advertising
Transcript
- The best era of retail media yet === [00:00:00] Kiri: Today I'm sharing some snippets from the Retail Gentech Podcast hosted by Scott Wino. Retail Gentech is one of my favorite podcasts. It covers the intersection of retail, e-commerce, And Agentic Commerce [00:00:15] and Scott has been one of the sharpest voices tracking how agentic commerce is moving, how it is reshaping the existing commerce journey. as a disclosure, I am an advisor to Scott's Company, refi buy. But that [00:00:30] doesn't stop us from disagreeing on things, which is part of why these conversations are fun. [00:00:34] [00:00:36] Kiri: I've spent a lot of time on this podcast talking about the threats that AI enabled shopping poses to the existing formats of retail media, compressed shopping [00:00:45] journeys, fewer page views, less onsite inventory for retailers to sell. But in this conversation with Scott, I wanted to push past that and talk about what comes next, because I really think there is a version of this that's better for [00:01:00] everyone, better for brands, better for retailers, and better for shoppers. but getting there means being honest about what's broken today. [00:01:07] Let's jump in. [00:01:08] scot: And now they can kind of see where Rufuss and Sparky are, and they're like. Oh my goodness, we're, it feels like I'm several. Most of [00:01:15] their onsite agents are really more what I would call customer support. Where's my order? And they're really good at that, but they're not really good at discovery, so. I think that could also be really interesting. [00:01:24] Another kind of element of this is as they upgrade those things, is that gonna also, [00:01:30] even, even when people do come to the site, are they gonna be accelerating 'em to a PDP themselves? [00:01:34] Kiri: Yeah. That's interesting. I think there's, there's a lot of it. It's a great point about it being category specific. Um. [00:01:44] Interesting about [00:01:45] that being apparel. There's, there's some retailers I've spoken with and, and they're not really concerned because they don't have a huge onsite business. There's some retailers where it's all in store. Think about a discount store, right. Or a, [00:02:00] um, a TJ Maxx. They, they don't care. Dollar stores is not gonna affect them at, at all. [00:02:06] Right. Dollar stores, et et cetera. They're, they're not worried. And, and maybe they shouldn't spend too much time worrying about it, but a, a [00:02:15] retailer where, um, there's, there's a compressed shopping journey that's now happening, uh, I think will really. Need to start thinking about what does a, a, a version [00:02:30] three look like? [00:02:31] To be honest, I, I think that maybe some of these current revenue streams shrink, but there are more opportunities for brands and retailers to partner together. Um. I've got a whole list. [00:02:45] I think it's just going to change. I think, you know, the, the, the sad thing is for a lot of brands, they have felt for quite some time that a lot of the retail media ad budget that they're [00:03:00] spending has been a margin extraction rather than a truly additive. [00:03:05] Place to spend money and they're kind of forced into it by their retailer partners. Um, that is, you know, that it doesn't always happen that way. There's, there's some, [00:03:15] there's some retail media. Um. Uh, uh, activations that are truly additive and exciting and a, a great win-win. But there is this kind of reputation that some, at least some of the time, it's, [00:03:30] um, retailers putting on the hard word with brands rather than it being a true win-win. [00:03:34] And there are win-win media opportunities that can be built. [00:03:40] [00:03:41] Kiri Segue: So what does a win-win actually look like in [00:03:45] practice? Scott was walking through the new ad surfaces that Google and Amazon are building for agent commerce. Things like sponsored prompts in Rufuss and direct offers in Gemini. And it reminded me of a mechanism that [00:04:00] already exists today that could become much more important in this new world. [00:04:04] scot: So you're looking for dishwashers and you realize, well I really want to get it from Lowe's 'cause there's one a mile from my house and I had a great Lowe's experience. You can then kind of flip it and then look at the. Only the Lowe's [00:04:15] inventory for dishwashers pickers. And then inside of there is a Lowe's, uh, branded chat experience, but also kinda like a a on Gemini Lowe's merchant experience. [00:04:25] And then I thought, well, that's gonna be, obviously Lowe's is paying for that. So that, that's kind of an [00:04:30] ad in a way. Uh, and, and a, but it, it's a, uh, upsell. Uh, but then I think there's gonna be a lot of opportunities for ads in there. So now maybe that gives Lowe's a surface area to go sell Maytag and GE some ads. [00:04:43] In concert with Gemini or is [00:04:45] Gemini gonna sell? So, so that's another kind of interesting surface area for us to think about. [00:04:49] Kiri: Well, I think that this, that, that's interesting in that it, it ties into, to something I see a lot of potential in, this has existed for some time, but it's called collaborative [00:05:00] bidding and it's when a retailer and a brand. [00:05:02] Both chip in to run an ad. You might have seen this on, on social media or, or, or in Google search actually as well where there will be an ad for that Maytag dishwasher. It will [00:05:15] be from Lowe's. The ad will show up from the Lowe's handle, but Maytag. Shipped in for that ad buy and that ad unit, and it was based on, again, that retailer's offsite audience extension data. [00:05:28] So this is actually a pretty [00:05:30] cool opportunity at a new surface for that collaborative bidding to continue where a retailer and a brand, that's a win-win scenario because. The retailer gets the sale, the brand gets the sale. Their interests are really aligned in that. [00:05:41] scot: Is there ad tech technology for that, like to do that [00:05:45] collaborative bidding? [00:05:45] Bidding? Is it some kind of like a manual thing on the backend that they, they kind of sort out? [00:05:50] Kiri: Um, yeah, that is it, it's done. Um, some retailers manage it themselves. With a team. Um, there was [00:06:00] a capability [00:06:00] that, uh, DoorDash acquired a year ago called Symbiosis. I'm, I'm, I'm not sure exactly if that's still out in the wild. [00:06:08] And then there's another, there's another ad tech company called amped, which is, um, getting started with this as well. [00:06:15] Not in the agentic space specifically, but [00:06:18] scot: I knew you'd know the answer to that. I, I had no idea. Did you know that leading retail media networks drive [00:06:30] 85% of their ads through mid and long tail advertisers? [00:06:35] Kiri Masters: Miracle Ads provides full funnel ad formats tailored to both one P and three P advertisers leveraging unique AI [00:06:45] capabilities that provide unprecedented levels of relevance and engagement. Retailers who want to capture ad spend from the long tail of three P Marketplace sellers use miracle ads in their tech stack. [00:06:58] Learn [00:07:00] more@miracle.com. That's M-I-R-A-K l.com. [00:07:05] [00:07:06] Kiri Segue: Collaborative bidding might be one piece of the puzzle, but the biggest shift I'm hoping for is in how targeting itself works in these [00:07:15] AI environments. [00:07:16] scot: I kind of think of it as, as. [00:07:18] It's a service element, right? So the way you differentiate is you add layers of service, and it can be loyalty, it can be free add-ons, and it can be getting the product. And a lot of, another one that's really popular is payment mechanism. [00:07:30] Um, so I, I have some 20 year olds and they love buy now, pay later. [00:07:33] I, I would never use that. It feels kind of, you know, it's not, not my thing. But if you look at the data, there is a cohort of people that they don't like having a. Credit, credit cards are for emergency and they don't hardly put anything on there. And they like to [00:07:45] know, I'm gonna get, I'm gonna buy something big and I have a plan to pay it down in three or four payments and be done with it, not have to stress about it. [00:07:52] So, so I do think there is gonna be a lot more levers that I think it's actually gonna be a golden era for, for trying to, [00:08:00] you know, do market. We restricted to four keywords and, and, you know, a CPC thing in the Google era. So I think it's gonna look more like marketplace explosion of innovation around these things than, than, than what we've seen before. [00:08:13] Kiri: I hope so. [00:08:15] I hope, I hope we see some new and creative ad formats. I also hope we see some new and creative targeting options as well, because, you know, the, the current, the current MO is. I'm using all of [00:08:30] your browsing history and information about what you clicked on, what you might be in market for, rather than the context of the chat itself and, and the content that I'm looking at right now. [00:08:42] And so this is where I wanna come back to the. [00:08:45] The Claude Super Bowl ad is that the reason why those ads were so good is that the, the AI character was serving up a, uh, an endorsement of something that [00:09:00] really didn't have any con context about what that person was really asking about. [00:09:06] scot: It picked up some context, but it missed all the other ones [00:09:09] Kiri: ex exactly. [00:09:10] Exactly. So I think that that is a real misnomer. Of course, [00:09:15] these like more intelligent models know what our, our, um, our rationale is. 99.9% of the time. Sometimes I get it wrong, but that, that's, that's the missing thing that I think we're gonna [00:09:30] be able to get potentially with tar, with targeting. I really hope that the, the models figure out how to do this, which is target the context of the query, not who I am as a shopper. [00:09:42] Or these like attributes or [00:09:45] past, past purchases that can be added on. But one of those clawed ads were, uh, you know, how can I get better at the gym? And it was something about him being short. So that's not, we [00:09:57] scot: have short king Stanoff. [00:09:59] Kiri: That's right. [00:10:00] I [00:10:01] scot: love that bit. It's the writing on that was superb. Yeah. [00:10:04] Kiri: Yes, it fantastic. I, I the, the really good ads. But I think what, well, what I, what I hope we will be able to get to is this more [00:10:15] sort of content based contextual advertising rather than, you know, some of the creepiness factor that comes from ads is like, oh, they're following me around. When, when they're too, when they're too following [00:10:30] us too closely, it feels invasive. [00:10:33] So if there is a, you know, the, these, and the only way that these, um, LLMs will be able to do it is, is purely algorithmic, which has opens up its own challenges for [00:10:45] advertisers who want more control over their ad spend. But if we're able to sort of only bring an ad into an environment when a really like. [00:10:54] Working through something or really trying to discover something rather than like some kind of [00:11:00] creepy thing, reminding me that I have wide feet. Yeah, I don't need to be reminded of that all the time. [00:11:06] scot: Random example, asking for a friend. [00:11:08] [00:11:09] Kiri Segue: I genuinely believe the next chapter doesn't have to be a doom loop. [00:11:15] If retailers and brands move towards models where their interests are actually aligned, things like collaborative bidding, contextual targeting, genuinely helpful ad formats, Retail media 3.0 could be the [00:11:30] best version of what we've had yet. [00:11:32]