Next in Media: Why Amazon is Trying to Downplay its Retail Media Dominance – Detailed Summary
Release Date: December 3, 2024
In this insightful episode of Next in Media, host Mike Shield engages in a compelling conversation with Zach Raschutti, Head of Retail Media at Kepler. The discussion navigates the evolving landscape of retail media, delving into the shifting dynamics of major shopping events, Amazon's strategic maneuvers, the balance between branding and performance marketing, and the future trajectories of retail media partnerships. Below is a comprehensive summary of the key points, discussions, insights, and conclusions drawn from their conversation.
1. Extended Black Friday Shopping Season
[01:07] The episode kicks off amidst the bustling period of Cyber Monday, with Mike acknowledging the hectic nature of these shopping events for retail media professionals. Zach shares his observations on the elongated Black Friday shopping season:
“A lot of the optimization and kind of shifting gears is happening in real time in and around the event.” [02:26]
Zach highlights that the traditional focus on Black Friday and Cyber Monday has shifted to a more extended two-week period. Brands are now approaching this season as a marathon rather than a sprint, with sales activities spreading out over a longer timeframe. This strategic shift stems from retailers initiating sales weeks in advance, thereby diluting the impact of single-day events like Cyber Monday.
2. Retail Media Advertising Strategies During Extended Sales
[03:00] The conversation transitions to the strategies brands employ in retail media advertising during these extended sales periods. Zach explains that while top-of-funnel marketing campaigns are typically launched six to eight weeks ahead to build consumer awareness, optimization and adjustments occur in real time to respond to ongoing sales performance.
“For endemic brands, it's the on-site advertising, the off-site programmatic piece that extends off of the retail media network.” [02:26]
Brands are increasingly focusing on both on-site and off-site advertising to influence in-store sales. The dynamic nature of these campaigns necessitates continual adjustments based on real-time data and sales trends.
3. The Push for Off-Platform Retail Media
[03:23] A significant portion of the discussion centers on the burgeoning trend of pushing retail media advertising off proprietary platforms to open web environments and social media. Mike queries whether this shift is towards more open channels like the open web or platforms like social media.
Zach responds by emphasizing the challenges brands face when navigating off-platform advertising:
“A lot of retail media networks have done a really good job of selling media to non-media experts...” [04:02]
He points out that many retail media networks market their offerings to brands that may not have deep expertise in media planning, leading to less strategic or effective off-platform advertising. This often results in suboptimal results, as brands may not fully grasp metrics like viewability or the nuances of programmatic advertising outside their native platforms.
4. Amazon’s Dominance in Retail Media
[05:29] The conversation pivots to Amazon’s significant role in the retail media landscape. Zach attributes Amazon's dominance to its substantial investment in ad technology, which surpasses other leading networks like Walmart. This investment has enabled Amazon to offer robust self-service measurement solutions, making it a formidable platform for both endemic and non-endemic advertisers.
“Amazon has invested, you know, alongside Walmart and some of the other leading networks by far the most in their actual ad tech.” [05:47]
Mike probes whether other retail media networks can compete with Amazon's sophisticated ad tech stack. Zach remains optimistic, citing examples like The Trade Desk, which illustrate that alternative platforms can match Amazon's capabilities through strategic build or buy approaches. However, he emphasizes that success in retail media extends beyond technology to encompass unique owned media and comprehensive integration of various marketing components.
5. Branding vs. Performance Marketing
[12:35] A critical discussion emerges around the balance between branding and performance marketing within retail media. Mike expresses concern that the immediacy and transactional nature of retail media might overshadow long-term branding efforts.
Zach counters this by asserting that strong branding is essential for sustained performance:
“Brands are realizing that you need to have a strong differentiated brand in order to drive lower funnel success.” [12:35]
He warns against an overreliance on performance-oriented media, which can erode profit margins and diminish brand value if not balanced with strategic branding initiatives. Zach advocates for a holistic approach where branding and performance marketing are integrated to support each other, ensuring both immediate sales and long-term brand loyalty.
6. Amazon’s Strategic Focus Beyond Retail Media
[11:05] Mike brings up Amazon’s recent appearances at events like Unboxed, noting that Amazon seems to be downplaying its retail media dominance in favor of broader demand generation and full-funnel marketing strategies. Zach interprets this as Amazon seeking new avenues for growth through media partnerships, particularly in areas like live sports and streaming services.
“They see a lot of their opportunity is a lot of the media partnerships that they've invested most of their money.” [11:21]
He explains that Amazon is channeling investments into areas that can leverage top-of-funnel advertising, such as live sports and Twitch, to drive brand awareness and complement their robust retail media offerings.
7. Shoppable TV vs. TV Attribution
[13:36] The topic of Shoppable TV arises, with Mike questioning Amazon's advancements in making TV ads directly shoppable. Zach clarifies that Amazon is currently more focused on TV attribution — measuring the impact of TV ads on sales and branded searches — rather than enabling direct purchases from TV ads.
“Everyone wants Shoppable TV to be a thing... we've run several campaigns around Shoppable TV and we've seen that they're more memorable.” [14:08]
While direct shopping via TV ads hasn’t fully materialized, Zach notes that incorporating interactive elements into TV advertising can enhance ad recall and consumer engagement, thereby reinforcing brand presence.
8. The Future of Retail Media Partnerships
[17:48] Looking ahead, Mike inquires about the potential outlets for off-platform retail media, specifically pondering whether the open web or social media holds more promise. Zach is optimistic about social media, citing the emerging integrations between social platforms and retail media networks.
“The bigger opportunity that we see is in social media, frankly, the connection and the pipes.” [17:48]
He anticipates that partnerships between retailers and social platforms will become increasingly pivotal, enabling seamless attribution reporting and measurement optimization. This integration is expected to enhance campaign effectiveness by bridging the gap between social engagement and retail performance.
9. Navigating the Holiday Shopping Period
[19:44] As the discussion nears its conclusion, Mike shifts focus to the remaining holiday shopping period. Zach outlines that while much of the activity occurs before Black Friday, significant shopping continues through late December, particularly between December 26th and New Year's.
“There's a lot of efficient customer acquisition that could happen in that last week.” [19:44]
He highlights opportunities in last-minute gifting and efficient customer acquisition strategies, suggesting that brands can capitalize on the tail end of the holiday season to drive additional sales and solidify customer relationships.
10. Organizational Shifts Within Brands
[09:36] Zach touches upon the internal challenges brands face in adapting to the retail media landscape. Traditional organizational structures are often disrupted by the integrated nature of retail media, necessitating a reevaluation of how brands approach marketing and advertising.
“Retail media has broken the organizational structure of most traditional brands and the best brands are shifting and operating in a different way now.” [09:36]
He observes that consumer-driven categories and simpler customer journeys are advancing more rapidly in adopting these new structures, whereas more complex B2C and B2B brands may lag due to intricacies in their decision-making processes.
11. The Role of Agency Partners
[04:34] Given the complexities of retail media, Zach underscores the importance of agency partners in guiding brands through strategic planning and execution.
“As the agency partner, we've tried to come in and provide structuring guidance...” [04:34]
Agencies like Kepler act as intermediaries, bridging the knowledge gap for brands less familiar with media intricacies, ensuring that advertising strategies are both effective and aligned with broader business objectives.
Concluding Insights
Throughout the episode, Zach Raschutti provides a nuanced perspective on the current state and future of retail media. He emphasizes the necessity for brands to integrate branding with performance marketing, navigate the challenges of off-platform advertising with strategic agency partnerships, and leverage the robust capabilities of dominant platforms like Amazon while recognizing the potential of emerging channels like social media.
Mike Shield adeptly steers the conversation to cover a breadth of topics, ensuring listeners gain a comprehensive understanding of the shifting paradigms in retail media. The dialogue highlights the delicate balance brands must maintain between immediate sales objectives and long-term brand equity, all while navigating an increasingly complex and technology-driven advertising ecosystem.
For professionals and enthusiasts in the media, marketing, and advertising sectors, this episode offers valuable insights into how leading industry figures like Zach Raschutti are steering their companies through the continual changes driven by technology and data.
Thank you for reading this detailed summary of the "Why Amazon is Trying to Downplay its Retail Media Dominance" episode of Next in Media. For more in-depth discussions and expert insights, consider tuning into the full podcast episode.