Podcast Summary: The Agile Brand with Greg Kihlström®

Episode #647: Achieving Retail Media Success with Ben Dutter, Power Digital
Release Date: March 7, 2025

Introduction

In Episode #647 of The Agile Brand with Greg Kihlström®, host Greg Kilstrom engages in an insightful conversation with Ben Dutter, Chief Strategy Officer at Power Digital. Recorded live at ETEL Palm Springs, the episode delves deep into the intricacies of retail media, focusing on achieving true return on investment (ROI) through incrementality rather than traditional attribution metrics.

Guest Background

Ben Dutter brings 18 years of expertise in sales and marketing to the table, with a rich background spanning both the brand and agency sides. Currently at Power Digital for over three and a half years, Ben oversees company strategy and client growth initiatives, emphasizing both organic and inorganic expansion.

Understanding Retail Media and Incrementality

Greg Kilstrom opens the discussion by highlighting the critical role of retail media in today's marketing landscape. He poses a pertinent question: "Are advertisers wasting money without realizing it?" This sets the stage for a deep dive into how brands can optimize their retail media investments.

Ben Dutter explains incrementality as the modern evolution of ROI, distinguishing it from traditional attribution methods:

"Incrementality is the kind of new version of attribution where we're really trying to figure out what is something that actually was caused by marketing, what actual conversion or new customer or purchase was driven from marketing that otherwise would not have happened." (04:00)

He emphasizes that many retail media investments fail to generate net new revenue, serving primarily to inflate retailer media budgets without delivering genuine business growth.

Challenges in Retail Media Measurement

The conversation shifts to the pitfalls of relying solely on traditional retail media metrics such as Return on Ad Spend (ROAS):

"ROAS is not necessarily going to indicate success or not," (06:47) Ben asserts, illustrating that high ROAS figures can be misleading. For instance, paying to appear for highly specific search terms often results in purchases that would have occurred organically, thereby not justifying the ad spend.

Ben highlights the limitations of retail media networks like Amazon, Walmart, and Target, where brands often lack visibility and control over attribution metrics. This lack of transparency can lead to significant portions of media budgets being unaccounted for in terms of true incremental value.

Measuring True Incrementality

Ben Dutter outlines a robust approach to accurately measure incrementality, combining scientific methods with mathematical models:

1. Scientific Approach:

   • Utilize test and control groups to perform pre-post testing.
   • Implement geo or audience holdouts to compare outcomes between exposed and non-exposed groups.

   "The simplest one is just turn things off. There's a lot more complex and smart ways to do that with different geo holdouts or different audience holdouts..." (07:57)

2. Mathematical Approach:

   • Employ Marketing Mix Modeling (MMM) to infer cause and effect through statistical analysis.

   "MMM is really just a way to infer through math equations, essentially statistics... to infer cause and effect between media." (08:15)

By integrating both approaches, brands can make more informed budget decisions that ensure every ad dollar contributes to new revenue rather than merely shifting existing sales.

Navigating Attribution Models: MTA vs. MMM

Greg raises a critical point about the complexity of measurement models:

"I've heard there's like camps of like the MTA, the multi-touch attribution and the MMM. Is it really so binary?" (10:50)

Ben responds by demystifying the perceived binary nature of Multi-Touch Attribution (MTA) and Marketing Mix Modeling (MMM):

"There's a lot of angst in the community about what to do. I think part of that angst comes from an over complication that's largely unnecessary." (11:05)

He argues that while MTA can offer value to large brands seeking marginal optimizations, smaller brands should prioritize broader strategies over granular attribution efforts. For most, focusing on overall budget allocation and channel effectiveness yields better results than obsessing over minute attribution details.

Optimizing Retail Media Strategy

The discussion transitions to strategic considerations for brands choosing the right retail media channels:

Key Factors:

1. Consumer Preferences:

   • Understanding where your audience prefers to shop (e.g., Target vs. Walmart) is paramount.
   • Tailoring marketing efforts to align with consumer shopping behaviors enhances effectiveness.

   "Knowing your audience and what they actually prefer from a consumer journey standpoint is really important." (14:22)

2. Profit and Loss Components:

   • Evaluate the financial implications of each retail platform.
   • Consider factors like wholesale discounts and resale margins.

   "I'd rather get 5% of a billion dollars than 100% of a million dollars." (15:00)

Ben underscores the importance of diversifying distribution channels to maximize marketing effectiveness. Brands opening up to multiple retail avenues often see a substantial increase in incremental ROI from their existing media campaigns.

Balancing Short-Term Sales and Long-Term Incremental Growth

Greg raises the challenge of balancing immediate sales targets with long-term incremental growth:

"How would you recommend that brands approach that?" (17:38)

Ben advises a nuanced approach based on the brand's financial health:

1. Distressed Brands:

   • Focus on optimizing demand capture and marketing efficiency to protect core business functions.

2. Healthy Brands:

   • Develop a long-term plan that includes forecasting and experimenting with various marketing channels to build sustainable growth.

   "Every channel is going to have a point of diminishing returns both from the marketing side and from the revenue capture side." (18:07)

He suggests that many brands are over-invested in media spend and could benefit more from reallocating funds to research and development, product innovation, or enhancing customer service.

Future Trends in Retail Media and AI Integration

Looking ahead, Ben Dutter anticipates significant advancements driven by Artificial Intelligence (AI):

"With AI, we've been able to see this democratization of traditionally legacy, enterprise, Fortune 500 type of techniques." (20:12)

He envisions AI enabling more sophisticated and agile brands to leverage formerly inaccessible tools like Marketing Mix Modeling, thus leveling the playing field and fostering innovation across the marketing landscape.

Staying Agile in Leadership

As the conversation concludes, Greg asks Ben about his personal strategies for maintaining agility in his role:

Ben Dutter shares his philosophy:

"The two most powerful things in business and leadership are the simple checklist and the one-on-one chat." (21:19)

With approximately 900 employees at Power Digital, Ben prioritizes one-on-one interactions to harness collective intelligence and remain responsive to new ideas and feedback. This approach ensures that he stays adaptable and connected to his team's insights.

Conclusion

Episode #647 of The Agile Brand provides a comprehensive exploration of retail media strategies, emphasizing the importance of incrementality over traditional attribution models. With expert insights from Ben Dutter, listeners gain valuable knowledge on optimizing media spend, choosing the right retail channels, and leveraging AI for future growth. The episode underscores the necessity of a balanced approach that caters to both immediate sales objectives and long-term business sustainability.

Notable Quotes:

• Ben Dutter (04:00):
  "Incrementality is the kind of new version of attribution where we're really trying to figure out what is something that actually was caused by marketing, what actual conversion or new customer or purchase was driven from marketing that otherwise would not have happened."

• Ben Dutter (06:47):
  "ROAS is not necessarily going to indicate success or not."

• Ben Dutter (11:05):
  "There's a lot of angst in the community about what to do. I think part of that angst comes from an over complication that's largely unnecessary."

• Ben Dutter (14:22):
  "Knowing your audience and what they actually prefer from a consumer journey standpoint is really important."

• Ben Dutter (20:12):
  "With AI, we've been able to see this democratization of traditionally legacy, enterprise, Fortune 500 type of techniques."

Learn More:

To explore more insights from Greg Kilstrom and stay updated with the latest episodes of The Agile Brand, visit theagilebrand.com.

For consulting or advisory services, or to book Greg as a speaker for your next event, visit www.gregkilstrom.com.