Tune in to Time for A Reset
Paul – 00:00:03:
Welcome back to another episode of Time for a Reset. I’m your host, Paul Frampton-Calero, and this is the podcast for marketing leaders across the world. The last time we spoke to you, we were broadcasting from La Croisette, from Cannes Lions, where we gave you lots of insights and trends from marketing leaders. This time, we are broadcasting live from Madfest in London, which received nearly 15,000 visitors over three days just last week. And we decided to take a really deep look into the retail media, the commerce media space. So delighted to be joined by four very well-known leaders in the retail media space to talk to us about why retail media has become such a big topic, why it’s growing so fast, and the key differences between the UK and the US. Delighted to be here with Carl Carter from Circana here at Madfest. The weather is not quite the same as the last time we saw each other in Cannes on the Croisette, Carl, but one thing that is the same is the focus on retail media and the conversation here. So fascinated about why you personally think that has become such a hot topic.
Carl – 00:01:04:
Yeah, I mean, there’s probably a number of reasons. I think the main one, which if I’m honest, everyone’s going to be going, oh, let’s punch him in the face for saying it. But deprecation of cookies, changes in privacy have meant that we’re all looking for a new data source. Certainly a lot of advertisers are. They need to target with precision, understand audiences. I think that’s driving a lot of what we’re seeing. But I think if you intersect that fundamentally with the retailers are the place that have rich data, right? They understand the consumer. But equally, they’ve got really good inventory. From a media perspective, they’ve got great inventory. So I think combining those things, it’s a little bit like the perfect storm. So we’re in a little bit of chaos. I mean, we’re all bored about talking about deprecation of cookies. And we’re seeing the industry respond to that. So I think that’s one of them. But the final bit, if I’m completely honest with you, the second you give a retailer that opportunity. They want to make money, right?
Paul – 00:01:56:
Especially high margin revenue.
Carl – 00:01:57:
High margin revenue, yeah. You’re used to selling products on a shelf and doing it in high volume. And it’s a very competitive space, especially in the UK. It’s a perfect opportunity for a retailer. But also it’s a perfect opportunity for ad tech industry, for advertisers, yeah? For businesses like ourselves.
Paul – 00:02:14:
And it also feels that there’s an opportunity to reset some of the challenges with just media per se. The measurement’s not been great. The targeting’s not been great. Even in a world with third-party cookies, let’s be honest, there was questionable kind of quality, hence the rise of attention and all these other metrics that everyone’s talking about.
Carl – 00:02:31:
Yeah, MTA was not the answer, right? We thought it was, but it wasn’t the answer.
Paul – 00:02:34:
Yeah, if you’re still doing MTA, maybe look somewhere else. And what would you say the key growth drivers are for retail reader revenue in the UK? What are the retailers that are growing fastest doing differently?
Carl – 00:02:45:
Coming here today, I’ve seen a lot of interesting conversations. You had a fantastic panel today. What really resonated with me was that we talked about what do retailers do? Well, I think they’re focused on the owned and operated in the UK. I actually think they’re particularly intelligent because what’s the one thing as a retailer you can control? Your owned and operated asset, whether that be e-commerce sites, that could be your in-store inventory with Shopper Media.
Paul – 00:03:10:
Yeah.
Carl – 00:03:11:
Hey, focus there. And I think UK retailers are doing that particularly well. Dean Harris today spoke about some great piece of work that he’s done with my team on halo measurement, understanding advertising that happens in shopper media in co-op. What’s the effect on other retail stores? And I think that’s really, again, one intelligent way to approach it.
Paul – 00:03:29:
I mean, if all media owners thought like that, the world would be somewhat different.
Carl – 00:03:34:
And I think going back to your point there on measurement, so that’s then us starting to think, well, what is the value of retail media? Not just for the retailer, but for everyone involved, for the advertiser. And I think for me, that’s where UK’s doing a really good job, owned and operated. Is it perfect? No. I think they’ve got to evolve the story of offsite, which I’m sure we’ll talk about the US in a second, where that’s particularly prevalent. But I think that piece has to evolve. And I do challenge, being really truthful, the idea that commercially, is it going to be viable from a scaling point of view? There are a lot of partners that have to come into play when you do offsite ID resolution, right? All the matching pieces. You’ve then got to go and add tech platforms. Right. All of a sudden, your CPM is going to get pretty bloated.
Paul – 00:04:17:
Right. Because of the number of players involved, right?
Carl – 00:04:20:
Exactly right. But the benefits there, you’ve got rich data, gets your audience, gets your precision, and then you can get to scale what looks like modeling. But the cost to do so, if I’m sat there and I’m someone like P&G or Unilever, I’m going to look at my traditional methods and go, you know what? Back in the day, it was a bit pray and spray, but, I could measure what I wasted. Am I going to get to the place where I’m just, it’s costing me so much. I haven’t, I’ve just got a different way to look at the balance, but I do believe we’re going to find the right place to be.
Paul – 00:04:50:
So there’s some really interesting stuff in there, Carl, that I’d like to dissect a little. One, to me, sounds a little bit like what happened with programmatic. That if you look at the difference between the US and the UK, programmatic is huge in the US, but actually it’s always. It’s always had a slightly challenging reputation in the UK. You talk to advertisers, retailers about data monetization. In the US, they’re all biting your hand off and they’re like, well, this looks like an easy way to generate incremental revenue. Whereas I see a lot more conservativeness from retailers here, partly because of what you say, owned and operated is owned. Therefore, you can control it. So what differences do you see in the way that UK versus US retailers approaches? I mean, scale is obviously understandable difference, but why do you think there are different ways? You said a minute ago, you think some of the UK retailers are a little bit more intelligent about how they approach it?
Carl – 00:05:40:
Yeah, and I should probably say at this point, I work for a US business.
Paul – 00:05:43:
I don’t want to offend you. He’s still saying America is slightly intelligent.
Carl – 00:05:45:
I think it’s a very different market. And going back to the scale, I know it’s a bit obvious, but take it at the broadest level, 340 million people, right? First of all, if you think about ad spend, it’s 10 times the size of the UK in total ad spend. All of a sudden, the scale is a very different play, but it’s a much broader play in that respect, which is where I think the programmatic offsite piece works. Yeah, very digitally native, lots of devices, lots of households. It’s easy to carve up that market, make some money. I will also say you’ve got single language pieces as well. Now, I represent not only UK, but Europe in my role. But I think that’s much more difficult when you come back to the UK. You haven’t got the scale of inventory to reach 340 million people. You’ve got 66 of which, how many of those are truly addressable? You’ve got to be more creative. And I think that’s the difference between US versus UK. We do have to be creative. You know why I think shopper marketing, for instance, has evolved. Why? Well, Dean said it earlier. For him, like 85% plus are still going into the store, bricks and mortar. Why are you going to spend money on programmatic if fundamentally that’s where your customer is? And again, Ollie Shayer said the same this morning on the panel, didn’t he? He did. Follow customer. And so I think the UK has done that particularly well. Interesting. And I think it’s going to be interesting to see European retailers and whether or not, they can do the same in creativity.
Paul – 00:07:03:
No, that was going to be my next question, actually, Carl, because obviously, as you pointed out, there’s a lot of population dispersed across a lot of geographies in Europe with lots of different languages. And let’s be honest, retailers that don’t have such amount of scale or footprint. Are you seeing creativity come to bear in some of those other European markets in how retailers are approaching it?
Carl – 00:07:24:
Yeah, so I think it’s a similar thing, right? They’re still looking at where is their customer. I’ve seen some retailers really lean heavy into their e-com proposition first. Ironically, those retailers don’t have a very strong e-commerce proposition or the share of their sales going for e-commerce. But of course, back to your program statement, shiny, exciting. People want to get into the tech space. Reality is, keep it super simple. If you take any of those markets in, out of home, for instance, is a great example in somewhere like Spain. It’s a really prevalent channel still. So all of a sudden, you’re leaning into a much more traditional methods of retail media, so.
Paul – 00:08:00:
I think the data that’s driving it, but the place, the format, the location is different.
Carl – 00:08:04:
It’s traditional.
Paul – 00:08:05:
Yeah.
Carl – 00:08:05:
And I think, so if I think from my own perspective in a measurement way of thinking, all of a sudden I’m not thinking about custom level closed loop attribution because you’re never going to get the scale and the cost is going to be too much. I’m thinking you do simple test versus control based on locations. What happened to sales? You can basically prove the value and you can do that on a much smaller budget.
Paul – 00:08:26:
Right.
Carl – 00:08:26:
You can have a 20 grand, maybe even a 10 grand shopper campaign, do a very simple measurement.
Paul – 00:08:31:
Right.
Carl – 00:08:31:
So I think that’s the nuances of how we’re going to have to think differently. Same concept, different scale.
Paul – 00:08:37:
Yeah. No, interestingly. And finally, if you had a big orange reset button on the table in front of us, which I realize I now need to buy because I keep saying it in every podcast and I haven’t actually got one. I’m going to find you one.
Carl – 00:08:47:
Thank you.
Paul – 00:08:48:
That would be great. If you had one, what would you hit reset on? Whether it’s in retail or marketing or media or anything really.
Carl – 00:08:54:
Well, I’d probably be hitting it a number of times a day. But I think, look, for me, I’m going to be very selfish in the answer and I am going to talk about measurement. Here’s how I feel right now. I thought we were getting to a really nice space in measurement where we believed it was important to have verified third-party measurement that were not involved in media. You could just say, right, that’s your role. You’re going to tell us what to do. I really would like to see the industry doing more of that. I think we’re very siloed right now, retail by retail. And I think you and I have had this conversation. If you’re a CMO, a big advertiser, you look at advertising, you look at promotion, you want to look at how do I share my spend across those.
Paul – 00:09:32:
Across every tactical channel.
Carl – 00:09:33:
It’s strategic. And, of course, you also want to do the tactical to bring that up and know more holistically how your spend’s working. I want to see us reset that. I want to see us get more holistic. I want to see us lean into verification third-party. And I’m selfish in that because that’s what I do.
Paul – 00:09:48:
Sure.
Carl – 00:09:48:
But I think it’s important we do that because the only way we’re going to get to the single source of truth and actually drive the whole industry in a more collaborative way, I think, is to do that.
Paul – 00:09:56:
No, I think that’s a really good one because, let’s face it, if you don’t know what’s working and you’re not attributing effectively, then pretty much every decision, that a marketer or a media agency is making on your behalf is flawed. And yet we spend an inordinate amount of time talking about lots of other things other than measurement. So I think that’s a great reset. So thank you, Carl, for joining us today.
Carl – 00:10:18:
Absolute pleasure.
Paul – 00:10:20:
So delighted to be joined by Dean Harris, who runs the Co-op Retail Media Network. Welcome, Dean.
Dean – 00:10:24:
Hi, Paul.
Paul – 00:10:25:
Yeah. And we’ve both spoken today at MadFest on various retail media panels. And it feels like retail media has definitely got more of a focus here this year than last year. And that seems to be the case in most conferences. So tell me why you think that is.
Dean – 00:10:38:
I know there’s more here. There’s more yachts at Cannes. It’s everywhere, isn’t it? It’s all over our LinkedIn feed. There’s probably three things, I think, why the retail media boom is happening. The key underlying theme behind them all is it’s going with the grain, not against the grain. For years, the advertising industry has spoken about the importance of data. Agencies are talking about data-driven, CRM data-driven, loyalty data-driven. Every single person involved in the advertising industry has caught upon the fact that data is the lynchpin. And income retailers, with the richest data source available, are able to target people on known behavior, not assumed behavior. So that targeting aspect is the value and driving some of that need. The other thing is retail media keeps the CFO happy. So on the other side, you’ve got that measurement, that closed-loop measurement that I showed that ad to that person, and that person then bought that thing. And you’ve got this mixed media modeling approach. That’s still built on assumptions. And consumers are behaving even more complex. The funnel is like Spaghetti Junction now. So retailers provide some reassurance that your ad spend is doing well. And lastly, the changes in the fragmentation of media. Meaning eyeballs are hard to find in a single place. Everyone shares their attention across the whole spectrum of social, web, TV. Whereas everyone buys groceries, right? And everyone buys them all the time. So you’ve got some consistent eyeballs there. So you’ve got the targeting, the measurement, and the reach. You glue all those things together, and a brand advertiser is going to be interested.
Paul – 00:12:15:
Right. Great. I love that. And for you, I mean, it feels like Co-op has really kind of pushed and has grown and built a proposition that has really connected and landed in the market. What is the key driver of growth for what you’re doing? We talk a lot about the US versus the UK, and there are different things that drive the scale there. But for you, you’re obviously in convenience, different to a grocer, different to an e-commerce only player. So what are the drivers of growth for you?
Dean – 00:12:42:
I had a great question from our CMO, Kenyatta Nelson. It’s great that you’re performing really well. I think every retail media network’s growing year on year.
Paul – 00:12:51:
Right.
Dean – 00:12:51:
It’s like, where’s the money coming from? Where is it coming from? Who’s losing, Dean, for us to win? And it’s predominantly from the performance marketing channels. You search your social that doesn’t utilize a retailer. That media that focuses more on the end of the funnel, the conversion point, that’s where the money’s coming from in retail media. For future growth, I think it’ll start to come from those media agency pots, those brand pots. And as brands start to organize themselves less around silos, where you’ve got the shopper budget, the trade budget, the brand budget, I’m aware already that some brands are putting all those together because they know. It’s not working as a channel specialist because that funnels spaghetti junction, as I said. So the growth is coming from performance marketing. And then in the future, it’s going to come from over the pots. In convenience, our proposition is additive. We’re essentially saying that we’re different, but complementary to supermarket media.
Paul – 00:13:45:
Right.
Dean – 00:13:45:
If you’re a retailer that wants broad distribution, you’ll focus on online. You’ll focus on quick commerce. You’ll focus on a trolley and you’ll focus on a basket. And our model is, if you want to pick up those close to home, impromptu, unplanned, need it now, buy it now missions, convenience is there. And the transaction volume is massive. So market share is low, but that’s because you’re spending a fiver, a tenner versus a hundred quid. So the eyeballs that convenience reach is still really impressive. I think we’re number two in transactions.
Paul – 00:14:17:
And the frequency is presumably higher as well.
Dean – 00:14:19:
Yeah, exactly that. And so you’ve got this proximity, you’ve got this frequency, you’ve got a compact store. If you think about a coffee ad in a supermarket, right? It’s on the coffee and tea aisle seen by people buying coffee and tea. In a convenience store, it’s on the bread, biscuit, cereal, coffee and tea aisle. So you get this discovery and visibility of advertising that drives some mental availability. So there’s Co-op scale because convenience is hard to find scale because it’s lots of independent retailers, Co-op market leaders. So we have the scale and then we have the difference. You glue that together and we can offer something that’s different to supermarket media. Acknowledging, of course, that we don’t have their loyalty scale. We don’t have their spend scale.
Paul – 00:15:00:
Right. But you’re very clear on your additive proposition that joins up with other. You’re not going to be the only retail media network in our plan, but you have a unique place alongside others, I think is what you’re saying.
Dean – 00:15:10:
Yeah. All we’re trying to do is say, don’t think about it’s retail media or it’s not. It’s retail media. And then within that, there’s supermarket missions and there’s convenience missions. What we’re not saying is it’s Tesco or Co-op. It’s Tesco and Co-op. And we just need to make sure it’s compelling enough and it’s easy enough to work with us to add us to a media plan.
Paul – 00:15:31:
Wow. Great point. On that point then, I know that you guys have done some really interesting stuff in terms of measurement around measuring what happens in advertising in your stores and how that affects the rest of the market. So I’m sure we’ll touch on that in a minute. But I’m also interested in your point about how you make yourselves easy to work with and you kind of keep up with the changing demands of the brands that obviously sell stuff in your stores. So I often call it sophistication. How do you keep up with the growing, even if potentially slight slow growing of sophistication on the brand FMCG side?
Dean – 00:16:05:
One of the things I’ve realized is a model that works for the supermarkets won’t work for us. So one of the things we have to communicate for a brand is convenience is different. You need to unlock that value in different ways. So if a brand wants these ultra levels of breakdowns in segmentation, and they’re trying to mirror the breakdown of a basket like they do for a supermarket, we need to support them and go in, well, if you’re targeting someone watching the football this weekend, that’s different to do they buy beer? Yes, no. You’re looking for other signals in the market. So our sophistication needs to be relevant to our proposition. So that’s the thing that’s quite challenging for us. It’s really the quickest thing you can do in advertising is comms. So you can launch a brand quickly. You can talk about it quickly. The thing that takes a while is making sure your products correspond with the way you’re worked with. So if we’re, I think in market share in the UK as a grocer, we’re about seventh, but if you discount Aldi and Lidl, because they’re less present in the retail media business, you’ve got to go, why would someone go all the way down to fifth and go, I want them in my media plan?
Paul – 00:17:14:
Right.
Dean – 00:17:14:
And that requires sophistication and difference, but with the customer in mind.
Paul – 00:17:20:
I like that. It feels like you have thought long and hard about your value proposition, which, let’s face it, if there are, I think Jill from Criteo said earlier, there are, at the last count, 670 different networks in the world. I mean, let’s be honest, most of those in the US.
Dean – 00:17:34:
Yeah.
Paul – 00:17:34:
But even here, there’s 20, 30, 40 and growing. You really have to have something that stands out because, let’s be honest, most brands, whether they have buyers in-house or they have agencies, are not going to be able to trade with that many different buying points.
Dean – 00:17:48:
I said something that I don’t know if it struck the wrong chord. And it was about six months ago where I was on a panel and I said, look, you could probably take the description of each of all the other supermarket retail media networks, put them on a page, put the logos above them and try and figure out which one matches it. And they’ll all probably say very similar things. And what we needed to do because of that difference is have a really clear position and a really clear proposition. And we’re quite lucky because the Co-op doesn’t have a hedge fund or a pension fund or the PLC shareholders breathing down our neck. We’re in control of our own fate. So we could make sure we’ve got the right strategy in place. And now it makes it so easy to say yes or no to different products, different partners, different vendors. Whereas a lot of the other big retailers are having to chase after the tinfoil like a magpie.
Paul – 00:18:38:
Right. And to some extent, they need to close margin gaps.
Dean – 00:18:42:
Yeah.
Paul – 00:18:42:
Created in their retail business.
Dean – 00:18:43:
Exactly.
Paul – 00:18:44:
Because of the change in the dynamics. And it’s interesting you say that point about almost like rip and replace that everything looks similar. There was a presentation on one of the stages yesterday about sameness in almost every category. And the fact that quite often car ads look very similar. Burger ads look very similar. We all know what that looks like. So I think you make a really valid point about that differentiation and value proposition. So, the last question I was going to ask you was going to be about if you had a big orange button in the middle of the table to reset something in retail media or retail marketing that you would change tomorrow, what would that be?
Dean – 00:19:18:
From a Co-op experience.
Paul – 00:19:19:
From your perspective. I mean, it can be more from a, I think the industry would be better if we did things this way.
Dean – 00:19:25:
Yeah. So a couple of things, I think. From an experience of looking after Co-ops, retail media business since last January, the thing I’ve learned and made mistakes on is headline following. You know, the latest headline on this retail media network has now partnered with this media agency or launched this new product. And then you’ve made the assumption that’s the right thing to do for us. And you follow it. So this sort of taking a breath and not letting the exact emails that circulate around, influence your decisions. You stick to your clear and cut strategies, so I have made some mistakes in the past where I followed, where I should have done what’s right.
Paul – 00:20:04:
I think, all of us have.
Dean – 00:20:04:
Right? But it’s a great call, because there’s no blueprint as someone’s referenced earlier today in a session, we’re kind of painting the future ourselves. I think we could have as an industry moved from promise to performance sooner.
Paul – 00:20:17:
Okay.
Dean – 00:20:17:
I think we spent a long time in promise, and we should have led the way. Now the brands are asking for it, and we’re reacting to it. We could have been proactive with that, and it feels like the industry, has to some extent responded from pressure, to get there-
Paul – 00:20:32:
For proof of incrementality.
Dean – 00:20:34:
Rather than doing what was right. At the end of the day the brands are our clients, we need to be a client-centric business, we need to be one step ahead of what they want, and what they expect. So that I think, we could have reset that.
Paul – 00:20:47:
I really appreciate the candor. I think there’s definitely some truth in that, that often industry takes a while to catch up until there’s a force field that makes out third-party cookies depreciation. I think he’s a great example of that, right? But look, I really enjoyed that conversation.
Dean – 00:21:00:
Likewise.
Paul – 00:21:00:
Thank you for making the time, Dean.
Dean – 00:21:01:
Brilliant.
Paul – 00:21:03:
Hey Jill, lovely to see you here at MadFest. We saw each other recently in Cannes. Weather’s not quite so good here, but still a really good conference. Retail media, commerce media was obviously a really big theme in Cannes, and it’s a really big theme here in MadFest. Why do you think it suddenly got so much interest?
Jill – 00:21:20:
Well, I think that retail media in its purest form has been around for many years. And it’s always been very much within the bounds of a retailer’s environment. So you’ve had trade and marketing spend that has been very much designed and part of the entire retail experience. And some stores have very much brought that to the fore, but other stores, it’s been a bit more subtle, etc. And I think there’s a couple of trends in the market that are really driving it. First of all, obviously, the cookie deprecation. So with the loss of signal across the market, I think media is looking for something where there is an informed set of data that can enable. Customers to be found on-site, off-site, et cetera. And retailers obviously have a plethora of first-party data, which is consented, which is able to be addressable at scale. And so I think that naturally, if you’re looking for particular audiences, the future potential of that addressable audience has made retail media very interesting. But I’ve worked in retail media for about 10 years. I think there was a lot of excitement in retail media back in 2014 when I was first doing it. One of our partners today, Asda, was my partner back then. And they started their retail media journey at that time.
Paul – 00:22:38:
Did they call it retail media at that point?
Jill – 00:22:40:
Yeah, they did.
Paul – 00:22:40:
They did.
Jill – 00:22:41:
Yeah. And so I think retailers have been working out how to make this land. And one of the biggest switches is definitely the organizational change within retailers.
Paul – 00:22:53:
Right.
Jill – 00:22:55:
Retailers, like many organizations, I would say the same is true on the brand side. It’s very siloed, right? So you think about, I go back to the customer data point. How do you make a total customer data strategy work within a retailer? Well, it has to come from the top down. And so if they understand that they’re sitting on a very valuable asset that they need to look after, because it’s so fundamentally tied to the retail experience and the retail value. So the customer database, how do you make that work in many different ways than perhaps you did 10 years ago? And how do you actually have a strategy that is about driving value back to customers by better understanding, better measuring, better anticipating what the customers are showing by their activities in store, online, wherever. And so I think organizationally, retail media is part of the boardroom discussions right now. Not probably as much, but I think it’s a big part of people necessarily think it might be, but it is certainly a conversation and it’s certainly getting airtime. There are some sectors, CPG, where it’s very much front and center, but the other sectors within retail, I think are starting to take it more seriously. And I think then you look more on a retailer to retailer basis. And the final point, and I think this was shown in Cannes was, and now the brands and the agencies are starting to really lean in. And it’s not that brands haven’t lent in historically with retailers. We know that trade relationship is golden, right?
Paul – 00:24:32:
And it’s been there forever.
Jill – 00:24:33:
Yes. Yeah, absolutely. But they’re trying to work out organizationally as well. How do you marry up the value and the necessity of the trade relationship with the opportunity and the potential of a media relationship? And how do you kind of balance the requirements of a JVP with what is the potential of incrementality through media. And so the brands are organizing themselves. In the last 12 months, we’ve seen such a huge shift. The conversations that they’re having, the organizational changes they’re making.
Paul – 00:25:08:
Almost none of the organizational setups are the same, are they? We were talking about that on the panel with Sainsbury’s and Tesco earlier, that almost every CPG has got a slightly different iteration of how they create cross-functional teams, which makes it quite hard, for retailers to know how to service them, because it’s not like as easy as full managed service or full self-service.
Jill – 00:25:28:
Yeah. Yeah. And it makes it very difficult for agencies and brands to understand how you do retail media at scale. So what’s the latest numbers, like 660 retail media networks? Yes.
Paul – 00:25:40:
Yes. Wow. What do you think are the key drivers of growth in the UK, the UK and Europe? I mean, the US is often talked about a little bit differently because the scale is enormous. A lot of it is Offsite and a lot of it is very digital. But what do you think are the key drivers of the growth here?
Jill – 00:25:57:
In my experience, I think the US is very sponsored product, performance-led, actually. I agree with Offsite. I think Offsite is a huge part in the US, but I also think it’s a very sponsored product, performance media-led play, which really works for them. I would differentiate what I see through our partners in Europe as being store is so much more important. And that speaks to the scale issue that you talked about. So one of the challenges of Europe is that you’ve got the very large retailers who may be in CPG, are likely to be just because of the maturity of that sector, the amount of base brands and agencies who are wanting to spend in those environments, the frequency of the customer engagement. There’s lots of reasons why CPG leads, right? But I think if you are not in the top five in your market, how does a brand work with you when you create your retail media network? Because you likely, on your own, don’t have the scale to be able to have a standalone proposition.
Paul – 00:27:01:
It feels like in the States, you’re already starting to see some mid-market and smaller retailers actually starting to work together. There are new propositions like Bridge and other things that are starting to allow that. Because to your point, how many buying points does an agency or brand really need from a retail media network perspective?
Jill – 00:27:19:
And I think going back to what I was saying about the brands and the agencies really coming to the table, that’s what they’re challenging us with right now. They’re saying like the Tesco announcement with Group M last week, right? Like, yeah, that totally makes sense, right? I understand why Group M and Tesco are going to do a direct deal. And Tesco have the scale in terms of their audience, but also the organizational footprint to be able to service a relationship like that.
Paul – 00:27:47:
But they’ve got 50 people in their sales team. Some have got none or maybe one.
Jill – 00:27:51:
And there is a big difference operationally between servicing the needs of a JVP and servicing the needs of a media agency. I think the difference is something to be celebrated, not something to be ignored. But you’ve got to be able to handle that in the correct way to the benefit of the retailer and to the benefit of the brand. I don’t hear it nowadays, but I think I’ve only been back in retail media, Criteo, for just over two years. And one of the first things I heard someone say is, oh, I really wish that retailers could act more like publishers. And I… We’ve moved on very quickly from that position. And that was coming in to me from my brands and agencies. And I said, but you’ve got to remember that retail media is there, or commerce media in a broader sense, is secondary to their core business.
Paul – 00:28:35:
Right.
Jill – 00:28:35:
And if you forget that, then you have a really good chance of maybe not getting it right.
Paul – 00:28:40:
Yeah, no. I think it’s interesting, isn’t it, that retailers need to have a media business, but the media business is, to your point, secondary to the fact that they have to serve customers in-store and online.
Jill – 00:28:51:
Yeah.
Paul – 00:28:51:
All day long, every day long. And that’s where the majority of the revenue is going to come from, even if the higher margin may come from some of the media business, at least for today.
Jill – 00:29:01:
I hope I’m not doing any of our partners a disservice when I say this, but I don’t think I’ve ever experienced a retailer making a choice on retail media over making the choice of them as a retailer. I think they will always put the customer first. They will always make a decision that supports their core business over their retail media business. And look, we’ve all heard the 5% kind of target of like 5% of your overall GMV should be coming from retail media.
Paul – 00:29:28:
It’s dangerous throwing around numbers like that, isn’t it?
Jill – 00:29:31:
It’s unrealistic. I think the US is 2.8 at the moment, and we know that’s a mature market and a scale market. The numbers that we see from the IAB predominantly suggest that it’s about 0.8% in Europe.
Paul – 00:29:44:
0.8 to 5 is quite a big shift.
Jill – 00:29:46:
That’s huge. Organizationally, from a maturity perspective, I think that we need to allow retailers to come into this space in the way that they want to. And then I think it’s incumbent on the likes of consultants, on the likes of their tech partners, if they’ve got commercial partners. As you say, many different flavors of how people set things up. It’s incumbent on us to give them the information that enables them to make informed choices that support them as a retail proposition as well as a media proposition.
Paul – 00:30:19:
If there was something that you would reset, either in the retail media space or just more broadly in marketing, and you had a big orange button and they’re taking in front of you. What would you use?
Jill – 00:30:28:
I love the idea of the orange button.
Paul – 00:30:29:
I need to actually get one.
Jill – 00:30:31:
Actually, can I have one as well? So I think we were talking about it when we were in Cannes last week or two weeks ago. And I think the predominance of the skew, if I were going to tear something up, I would tear up the traditional funnel. Because I think if you think about the way that we’ve thought about it, we’ve thought about a broad set of audiences that we’d quite be interested in going after, and then we’ve built a strategy about how to get them to basket. I remember I was publisher of CNET years ago, and I used to spend all my time trying to work out how I could prove that reading a review on my website would provide the right use for somebody to put that product in.
Paul – 00:31:14:
It was a signal, right?
Jill – 00:31:15:
And the way that we think about it at Criteo is we think about the inverted funnel. So you start with the deterministic data. You start with the product. You start with the skew. And you understand who’s bought it.
Paul – 00:31:29:
Right.
Jill – 00:31:29:
You understand what else they had in their basket. You understand the frequency of which they bought it. You understand the price point at which they bought it. And if you can really understand the behavior around the purchase of the product.
Paul – 00:31:44:
Right, there’s a lot of richness.
Jill – 00:31:45:
Then you start there. So you start from a rich, detailed understanding of the skew. I mean, we call it a skew, but it’s really a product.
Paul – 00:31:55:
Right.
Jill – 00:31:55:
And you start to understand the people who are attracted to that. And you build from the product and the engagement with the consumer.
Paul – 00:32:01:
Interesting.
Jill – 00:32:02:
And then you start to layer on marketing activities that are founded from that understanding.
Paul – 00:32:08:
Right.
Jill – 00:32:09:
So I think for years we’ve spent looking at it the other way around. But if ultimately you want to sell product, then you need to understand the biorhythms of that product. The way in which customers engage with it.
Paul – 00:32:22:
And it’s the data point that tells you most about the customer anyway.
Jill – 00:32:25:
Yeah.
Paul – 00:32:26:
Because everything else is lifestyle loosely behavioral rather than actually purchase decisions. And I think I love that reset, because, I called this out on the panel earlier that, there’s a danger retail media, that ends up going down the same path, that just all performance marketing did, or digital did where it’s like well it’s all about, the bottom of the funnel and driving says because you can measure it. Because you can see someone’s bought, then push them down there but of course actually the data, all is telling you is the propensity for someone to buy the frequency what they’re willing to pay, is giving you all of the information that you need to determine the customer journey. And then you determine at what point during that customer journey should I appear and message. Whereas everybody has a tendency to go to, if you can measure stuff, then just try and drive as quick a sale or as quick a click-based attribution as possible.
Jill – 00:33:16:
Well, I think there’s an assumed understanding of the consumer, right, which is going to become more and more difficult to realise, right, as we get into 2025 and beyond. But if we can really understand how products are sold, what fundamentals of that product engage different sets of consumers. So it’s not to ignore the consumer, but it’s to merge the understanding of both the product and the consumer. I’ll tell you something that we’ve started to hear quite considerably. I mean, retail media, when people ask me about commerce media versus retail media, I don’t have a perfectly canned answer to it. When I think about retail media, I think about I’m a brand, I want to sell product within this specific retailer’s environment. So I’m interested in the combination of the product, the retail environment, that specific retailer’s environment and the customers. And it’s that combination and the activities that you have within that retailer’s environment that really ultimately drive the retail. When I think about commerce media more broadly, if I think about a brand today and I’m looking at, so, 660 retail media networks, if I have direct relationships with 20 of them, how do I make sense of the 640 left over? How do I make sense of that?
Paul – 00:34:32:
Yeah, and determine whether I’m missing anything by not.
Jill – 00:34:35:
But if you start with the SKU and you say, I’m interested in selling these products in retail environments that can then go to basket.
Paul – 00:34:45:
It comes to the surface.
Jill – 00:34:46:
It starts to change the way that you think about retail media networks. And I think there’s a lot of noise around this area at the moment. And it’s difficult because you’ve definitely got attention that I take very seriously. You and I were sitting in a room at Isabel last week when we were talking about what was the measurement that we were talking about? Yeah, and I think that there was something about standardization in measurement shouldn’t mean that you lose differentiation. I think it was.
Paul – 00:35:14:
No, you’re right. And I heard that loud and clear on the panel today that people are willing to standardize so it’s easier for the buyer, but they don’t want to lose their differentiation in USP between Sainsbury’s and Boots and Tesco. I mean, why would they?
Jill – 00:35:29:
And so there’s always going to be a huge amount of continuing focus on matching the consumer, the SKU, and the route, and that specific retailer. And we should celebrate that. That’s very important. But there is going to be a role based on the fact that there is such fragmentation in Europe that there is a role for saying, how do I sell more of my product to the right audiences and do it within a known set of retailers? Now. I go back to the differentiation, right? Like there is a little bit of a rub saying that, but if you want to scale brand spend, if you want to scale it, you’ve got to make it easy for them to buy. So it’ll be interesting to see how that manifests. We’ve got a few thoughts about how that might work out. I know there’s other companies looking at that.
Paul – 00:36:18:
Technology and AI can solve that. It’s just a question of operationally, commercially, politically, whether retailers will want to go down that path.
Jill – 00:36:26:
Yeah, and also the technology can’t be the answer to it. Technology should be the quiet part about this, should be the enabler. At the end of the day, this is about marketing. So how do you make the creative, the marketing, the customers that you’re trying to reach if you know them already, the new customers you’re trying to attract if you don’t, how do you make those strategies work, drive the right response and performance without taking away from it just because you’re trying to kind of make sense of this complex network of retailers? And it’s a difficult problem, but I think it’ll be interesting to see how that manifests itself.
Paul – 00:37:05:
Brilliant, well, I can’t think of a better place to leave it. Super valuable nuggets in all of that conversation.
Jill – 00:37:09:
Thanks for your time.
Paul – 00:37:10:
Appreciate it.
Jill – 00:37:11:
Thanks for your time.
Paul – 00:37:13:
Delighted to be joined by Ollie Shayer from Boots. Ollie, you’ve kindly been on the podcast before and we’re at MadFest after you seem to have been pretty busy the last few weeks. Cannes, we were both in Cannes, then you were at the Path to Purchase Summit, I think in Chicago, weren’t you? And now at MadFest. And we can’t escape the focus on retail media and commerce and obviously Boots Media Group has been going from kind of strength to strength. Why is there such a big focus on this area in all marketing and media conferences right now?
Ollie – 00:37:38:
Firstly, lovely to see you, Paul. Great to be here at MadFest. I think at the moment, and it’s been nice seeing different parts of the industry over the last few weeks, is I think there’s just a real energy around it because it’s getting more focused because I think, I’ve talked a lot about it, I feel like we’re growing up as an industry. I felt like about 12 months ago, it was beginning in the startup stage, it’s real growth stage. And I think what we’ve seen over the last four months is both brands and retailers have really leaned into this territory. And what you’re seeing now is great case studies about why, what’s working, but you’re also seeing really strong investment from retailers in this space. And I think what was evident from Cannes is that, this is now a really important and serious part of the industry. You saw on the Gazette, big US retailers taking significant space to talk about their offering. And I think that, for me, just puts it in a very different territory. And I think we talked a bit earlier in our session, is this move from retail media as a kind of separate entity to being really key part of media work that’s happening. So I think all those things together and brands are evolving their offerings as well with regards to how they’re organized to really think about that. So yeah, it’s been a great couple of weeks, really good. And it’s wonderful to see so much energy around the industry.
Paul – 00:38:43:
I agree. It’s nice when there’s momentum and energy. And on our panel earlier, we talked quite a lot about the evolution of how brands are kind of changing their model to work with retailers. Can you maybe just shine a light on that for a second and how you’re seeing some of that evolve?
Ollie – 00:38:57:
We touched a little bit on it. I think it’s massively evolutionary. I mean, as an FMCG advertiser for a long time and previously the integration between traditional media, shopper media and trading media was all kept very separate as an FMCG. And I think what you’re seeing now is that as a media director in an FMCG role, actually you now have access to firstly an understanding of effectiveness. So you can see, okay, what does my advertising do rapidly? Which is massively helpful. Hugely helpful. Don’t have to wait for the MMM three months later. And I think what you’re also seeing, though, is that means you’ve got to break down probably long existing structures that have probably existed at both a global and a local level for quite a long time. And I think so that takes change. But, you know, the ones who are really making that change and embracing it, I see as really the pioneers who are accelerating into this space fast, and are probably seeing the best results. So that’s the bit where I think you are seeing people kind of tread their own path. But equally, much like all retailers are different, all FMCGs have their own structure. And I think being able to work through that is also going to be…
Paul – 00:39:59:
Yeah, and that’s really interesting. And I think it’s part of the excitement about it, that there isn’t just one or two obvious models. I mean, I’m sure we’d all like some standardization. We were both.
Ollie – 00:40:08:
100%.
Paul – 00:40:09:
These are sufficient, and that needs to happen, right?
Ollie – 00:40:12:
100%.
Paul – 00:40:12:
But equally, retail is all about differentiation. Like many of the retailers sell the same products, right? But it’s about the differentiation of the experience often, isn’t it?
Ollie – 00:40:20:
100%.
Paul – 00:40:21:
We can’t lose sight of that. What do you see as the key growth drivers in the UK for Boots Media Group or any other retail media proposition? Because we talked on the panel earlier about the fact that the US approach to scaling is somewhat different, like more data monetization, more sponsor search, more kind of off-site.
Ollie – 00:40:38:
Yeah.
Paul – 00:40:38:
Whereas the UK is a bit different. What are you betting on as Boots Media Group?
Ollie – 00:40:41:
I mean, I think for me, I mean, the US being there last week, it’s really clear there’s a very strong integration between data and ad tech there. That’s a huge bet they’ve made. It’s a really deep integration. I think you’ve got, agency integrations into that as well. I think with the UK, what we’ve got to look at is, fundamentally, it’s about the consumer experience that you give and the value that you give customers. The part we mustn’t lose sight of is that, yeah, the data that’s powering this is customer data. And therefore, the experience that we give and the value exchange that we give for that experience is really important. So for me, it’s about how do we create amazing experiences for our customers, either in the products that we offer them and showcase to them, either in the experiences they might have in a store environment or online, and we make it the best that can possibly be, and I think that will unlock the growth for our industry, doing that in the right way. And then to your point, standardizing the way that brands can see that effectiveness between partners on an even scale is really important for us to accelerate that, the kind of growth in the next few years.
Paul – 00:41:37:
Great. And that’s, I hear that loud and clear, the focus on the customer. And it feels like an obvious thing to say. But I hear a lot more from the people that run UK retail media networks than I do in the US. Not to say that they’re not thinking about the customer, but often it’s about the new tech or opportunity that tech has enabled that’s going to create that new revenue stream, rather than how do we enhance or create, I think Amir on the panel earlier called it, how do we create additive experiences through advertising rather than just something that creates friction?
Ollie – 00:42:06:
Yeah. And I think you’ve got to look at it that ultimately, if it’s only about data transferring or data monetization, that’s not a value exchange for the customer. The value exchange for the customer is a better experience in what they have from when they go to the store or an experience that they have while they’re in store or even online. So I think that for me has always been the heart. And ultimately, I think UK retail has always been about that. It’s always been about strong customer experience. Not that the US hasn’t been, but I think possibly due to the size and the scale of it. It’s easier to do that. And also it’s so, I mean, so massive. You’ve got kind of even regional state retailers over there who are as big as some of our largest retailers in the UK.
Paul – 00:42:44:
That’s true.
Ollie – 00:42:45:
And I think we must be totally generic over there are very different strategies that they each have for it, but there is definitely a theme over monetization.
Paul – 00:42:52:
Yeah. Okay. I like that. And last question, Carl from Circana, obviously they’re in the measurement space. He talks a lot about the fact that he just thinks that measurement is so immature still. What would you like to see happen from a measurement? Perspective in this space so that we get the ability to prove the kind of value of what should be more valuable data than just traditional kind of media owner intent data or kind of behavioral data.
Ollie – 00:43:17:
I think my thoughts on it are, at the moment, we still, we started to touch a little bit on the panel. I think we still look at it very much at the lower funnel, the conversion-based opportunities and what that delivers. How can we deliver the maximum return for the investment, which is the right thing to do. But as I think with anyone, any marketer, what you’re looking at is what period of time, how do we finesse that? So if I buy a product and I know that product, I’m going to use it for three months, then the effect of the advertising that I’m going to have is not going to really be seen immediately. It will kind of come over a longer period of time. So I think it’s a move away from this kind of instantaneous effect to longer term and also cumulative. So one of the things that’s really valuable is, well, what’s the effect if I run multiple campaigns? How does that affect me versus the category? And I think it’s just that finesse that we’re bringing in, which is moving from that single moment to longer term, omnichannel. But I think it’s Carl’s absolutely right. I think the industry will evolve even more because also the way in which you can combine measurement data using data clearance, is advancing so fast. And I think that piece together, combining different, really interesting data sets, I mean, we’re doing some work on this at the moment, where you combine probably data sets that you would like to have always understood the effectiveness of, for example, like how do you understand the effectiveness of linear TV and maybe a different way than it is today on, so with retailer data, these are the sort of things I think that will open up as well.
Paul – 00:44:35:
Again, we touched on the panel earlier. The promise here is that actually retail media helps us to reset some of the challenges we’ve had in media per se. Like, let’s be honest, even with a third party cookie, the quality of targeting, measurement, precision, actually really knowing whether there is attention or not hasn’t been ideal.
Ollie – 00:44:52:
Yeah.
Paul – 00:44:53:
And it feels like all of the tools and technologies are now coming to market that allow us to solve for that. So I agree with you. I think it’s a really good point. So thank you for making the time. It’s always a pleasure to talk to you.
Ollie – 00:45:04:
Lovely to speak to you.
Paul – 00:45:05:
I’m sure we’ll see each other again, although the conference circuit, as you said earlier, might about to be coming to a bit of a standstill. So we’ll have to go into business planning for a while.
Ollie – 00:45:13:
I look forward to it.
Paul – 00:45:17:
And that is a wrap for this episode of Time for a Reset, the marketing podcast with global leaders, brought to you by CvE Consultancy. I’ve been your host, Paul Frampton, and I hope the insights from this episode will help you reset and refine how you implement successful change for strategic transformation for your brand. Look forward to seeing you next week as I chat with another senior marketing leader. And please don’t forget to follow us on your favorite listening platform, Apple, Spotify, or wherever else. Look forward to catching you soon.
