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- [00:09]
A
Welcome to the Big Story, a roundtable featuring members of the Ad Exchanger editorial team. Every week we bring you an in depth discussion of key developments in digital marketing and media. Today we're going to talk about what's next in multicultural marketing and the state of the state of Commerce Media. First, while many diverse owned publishers saw a rise in RFPs five years ago as brands committed to spend more on diverse owned and diverse targeted media, following through on these commitments has fallen down as a priority in recent years. So what are these publishers to do? Our news editor Andrew Bird explored how new tech solutions can help these publishers continue to attract spend from brands and create performance for them even with their more limited scale. Then our senior editor James Hersher dropped by the IAB Connected Commerce conference this week. And as our retail media reporter, he's going to share not just the state of the state of retail media, but where it is in terms of creating standards, what AI holds for retail media and where retail media is in a state of maturity. I'm Sarah Sluss, Editorial director at Ad Exchanger and before we dive in, make sure you mark Your calendars for May 18th to 20th in Las Vegas at the Park MGM for our programmatic AI conference. AI is transforming marketing and media. So are you ready attend to get a boost on how to make smarter decisions, be more effective and improve performance by using AI and marketing? You can use the code POD10POD10 for an extra 10% 10 discount and sign up through the link on our website today. Great. And Andrew, let's talk about, let's bring us up to the, the present here. As I alluded to in the intro, we saw this big boost in interest and spend from brands on multicultural media and that's fallen off in recent years. So what has that, what has this whole, you know, rise and fall meant for multicultural publishers and how did that inspire this story?
- [02:22]
B
Yeah, yeah, absolutely. I think on one hand I think there was a big surge in diverse owned media investing into them after kind of certain cultural things happened. For example, George Floyd and so a lot of brands were kind of pulling into that, that we're going to invest into it and with a lot, a lot of things that comes in trends. So I think over the past couple of years a lot of publishers are seeing like RFPs kind of pull back for a lot of different reasons. One I think is scale as you mentioned before. And there are a few certain factors that are, I think are affecting publishers at large, but especially affecting multicultural publishers and who kind of sit at a niche. And one of them is like referral traffic, especially from social. A lot of publishers relied on a referral from like Facebook, from Twitter, and a lot of that volume has kind of declined. And at the same time there are like structural web changes. For example, zero click search is a big one. If users are getting answers directly and search results are through AI generated summaries, they're not actually clicking through to publisher sites. So even when there's demand for the content, the traffic doesn't necessarily materialize in the same way. You know, Justin Barton, who I talked to from Agri Media, he said publishers are maybe a fifth of the reach that they had three or four years ago. And his point was that when both search and social media stop driving traffic, publishers are affected, effectively being hollowed out. From a distribution standpoint. Where that really shows up is in monetization. And sales reach is still a core input in how publishers are evaluated in media plans. And when that number drops, it doesn't just mean fewer impressions, it can mean fewer opportunities to be included in campaigns in the first place. And for multicultural publishers, that impact is often more pronounced because they tend to operate at less scale to begin with. So that just kind of affects them in a big way.
- [04:08]
A
So a big interest that's declined in recent years, and I'll add political pressure to the many reasons why that's declined. And then I think once publishers get those budgets, for those that still are getting them, it's a little bit hard to scale them to the level that a brand might want. Because I think one, these audiences are smaller to begin with often, but also there's, you know, there's less opportunity to boost them on social or get traffic, you know, to fulfill these campaigns. So what's one, what's one thing publishers are doing about it?
- [04:44]
B
Yeah, for, yeah, one thing that they're definitely leaning to is first party data, their first party data assets. I talked to publishers Q Digital, who is like LGBTQ Focus Audience. They have sites like Pink News and I know they put on like social award shows and things like that. And I also talked to aurn, which is the American urban radio network. And they're American, making their first party data more actionable. The way they're doing that, the way they described it before, is they were kind of using their first party data traditionally, who their audience were, what they care about and what they value the most. Now they're increasingly using it to extend audiences. And the way that they're using that as Agrimedia's audience accelerator tool at a high level the tool is taking the data publisher they already have and making it more usable across a much broader set of channels. And that starts with like getting signals such as device IDs, IP addresses and contextual behavior from a publisher's site or app or whatever they put their content. Those signals are used to build audience segments based on interests or affinities. From there, those segments can be activated across channels these publishers don't usually touch, like for example Aurn, maybe CTV Q Digital, CTV Q Digital into digital audio and then you know, AR into the open web. So instead of limit being the resources being limited to their own inventory, publishers can reach the audience in other environments. Essentially you're taking the exact same user who comes to your site and finding them somewhere else and that's a different way.
- [06:12]
A
So true or false, this is retargeting, basically. Yeah, it's pretty much retargeting.
- [06:20]
B
They're definitely not reinventing the will here for sure. They're definitely using a tactics and finding ways to help them bolster some of their audience goals to help them get some more of these RFPs. Like for example Justin Q Digital talked about, you know, they're building sub affinity segments around segments like entertainment, travel and sports and using those segments to reach users beyond their broad footprint. And then I think what's been helpful for Justin, which he described is like his aha moment is when he's been able to layer targeting while still achieving scale. And from his point of view that that has has historically been a trade off where more precision for them has usually meant less scale and audience accelerators kind of helping them. In that vein and from the Aur Ren's perspect perspective, I spoke to Chesley, who's the CEO and talked about how they've historically relied on Nielsen data, which they weren't necessarily the most positive about because Nielsen essentially reduces large audiences into a few broad demographic segments. And now with the help of Audience accelerator, they're able to move towards more precise data that lets them target at a much more granular level, even down to zip code or block. And that's especially meaningful because you can have more precise, maybe target even local advertisers that are more granular to what the audience is looking for. And that also just gives them a way to participate in the ecosystem without having to build the infrastructure from scratch as well.
- [07:42]
A
So retargeting with a twist. Another twist in your story I thought was interesting was that they can do this targeting on connected tv, which might be another area people would want to look at. I'm wondering, you know, one. One benefit of actually, you know, reaching someone on, you know, a diverse, owned, diverse targeted site is that there's not some kind of weird mismatch where why am I receiving, you know, this ad, maybe for, you know, for something that might be related to my identity in a place where I'm expecting to see it versus where I'm not expecting to see it. Did any publishers touch on that consideration and how users might receive that?
- [08:27]
B
Yeah, I mean, I think Q Digital talked on it about it a little bit. Especially when thinking about when doing retargeting and putting your audience in segments that aren't necessarily attached to your brand or your identity. A lot of, especially when you're dealing with marginalized communities, they're very sensitive about what brands they connected to, how brands maybe respond to different issues, maybe how they've been treated in the past. So I definitely think that's something that Q Digital specifically is thinking about because, like, sometimes when you do these, like, retargeting, when you're doing like curation deal packages, when you're doing, when you have a lot of different intermediaries handled handling your inventory, a lot of times you don't have control of where your ads are placed, you know, who's reaching them, how they're reaching them. So I definitely think that's something that they're thinking about. I think they're trying to build a way to have more control over that. And I think even as they're at the early testing stages, that's something they're thinking about for sure.
- [09:22]
A
And in talking to these publishers, were they validating or kind of confirming the fact that they're seeing fewer RFPs from brands about multicultural campaigns, or is this kind of a touchy subject for them where they might not want to address it as directly?
- [09:42]
B
Yeah, I think it's a little bit of both. I think when I brought the question up, I think it's something they agreed upon. I think where while RFPs are disappearing, like, I think that's a big factor. I think the bigger factor is more how what buyers want from specific RFPs. They're more concentrated, more demanding. I think buyers are under pressure to kind of simplify their paths and work with fewer partners. So there's growing expectation that any publisher they work with can deliver across multiple channels at meaningful scale. You know, Justin Barton from Aggrid say, you know, that's changed the way publishers even approach going into RFPs before, where a publisher may be able to get a deal and achieve maybe a portion of the RFP, maybe 200,000 worth of it or $500,000 worth of it. They can still be competitive where now that's not the same thing. They kind of have to check every B.O. and so, you know, they're not necessarily reading reaching the same scale. And then Chessy also kind of brought up, you know, on the opposite end, investment into, you know, ad budgets for diverse owned media were never really that high. I think generally they were just about 2%. So multicultural diverse owned media was still kind of already a small portion of the pie to kind of begin with. So they already kind of started at a disadvantage. And this is just even further on top of just the scale issues that publishers are facing.
- [11:03]
A
So it's solving some scale issues for publishers. Are there any drawbacks or considerations that they're thinking about when pursuing this type of strategy?
- [11:13]
B
Yeah, I mean, I think one we kind of touched on already is that publishers are kind of thinking about like where and how their ads are being placed in general. I think it's also kind of touched upon like how diverse owned audience are being bought in general. I think one thing that Chesley was looking towards doing is maybe taking the multicultural diverse owned label outside of the auction in it when buyers are kind of buying publisher data just because they might get a better chance of like being bought and be able to reach the scale. So while they can kind of, you know, reach scale in ways, there's still, you know, certain drawbacks for that. So I think they're still trying to figure out ways in which they can deal with this for sure.
- [11:56]
A
Interesting. Great. Well, thank you, Andrew for pursuing this topic. There is definitely more to come there as it continues to evolve and retargeting with a twist. I like that. So James, we're going to turn to you with the state of the state of retail media. You've been killing it in your newsletter lately. Everyone needs to subscribe if you're not already for James's insights and commentary on the retail media space. When you dipped in to kind of get a pulse check at this conference. What stood out to you in terms of where retail media is at right now and where it's going next?
- [12:36]
C
Well, one thing I liked was that it was not such a rah rah retail media show. It was not all gung ho. I think that's been sort of the trend, you know, but, but the industry has reached a point where, you know, you can't just like talk about like the promised land, you know, everyone is here now and it really, you Know you. This, like, has to be a city where people can live. It has to be a real thing. I, I felt that way myself. I was doing the write up and I was sort of framing this in my head as the sort of like the first conversation with a little kid who sort of is like a big kid. And you know, like, you're trying to get like. I was sort of thinking about that and then, and then I saw Colin Colburn, who's VP of Retail media for Ivy Tech Lab, and he gave the opening keynote, which was the part of the show that I missed. And in his keynote, he, his sort of, you know, his framing metaphor is that we are at potty training in retail media, essentially. So I was like, okay. Like, yeah, right, okay, yeah, we're right
- [13:45]
A
on the same, but okay.
- [13:48]
C
Nope, it's potty training, I'm afraid. Actually, to be specific, it's like we're at the parents phase of potty training. So it's not that we're like peeing all over the floor. It is that the, the metaphor is that, you know, like, we've reached this point where like the first day or two of potty training, maybe it's sort of like you've had a success. You have like, reason to believe, like, everyone is sort of like, oh, like we're halfway there or something, and then, and then it's the next six months or whatever. Right. So he's like, we're at this stage where it's like you've had this, you know, reason for optimism and you've, like, you're a little bit into it, but you're about to like, realize that it is going to take like, a lot of, like, sticking to it. So, so, yeah, so that is the metaphor. But, but we were both, you know, along the same lines of like, this is, this is kind of where commerce media is right now. Like a little, you know, it's a little kid and it's kind of just starting to reach that point where it's like, all right, you're starting to grow up. Not the birds and the bees, I would say, but like, yeah, I'm keeping that metaphor in my pocket because in a few years there's going to be the consolidation phase.
- [14:58]
A
The next thing we got. I like all the toddler metaphors. I think you're still kind of in the thick of it, James. I want to know the tantrum metaphor, the all the children metaphor. So, okay, so we're in the potty training stage still kind of not as consistent in terms of results but we know we're going to get. And I got to bring up AI because, you know, we got our conference going out going on. Everyone's talking about it, especially because I think there is a lot of potential for product discovery and purchasing within these AI chatbots. So was this present or absent at the conference?
- [15:41]
C
Absent, actually. I would say, like, it's not like AI didn't come up or anything like that, but there were, there were none of the like, LLMs or operators themselves. I asked Colin that, you know, and I had had him, had him sat down for a few moments during the show and he and the press person exchanged a, a loaded side look that I could not really interpret. But because I said like, there's no chat GPT, no one, you know, like no LLMs. And you know, they clearly communicated something silently amongst themselves. But. And also there were sort of interestingly like, like Target Roundell was on stage. Roundell is one of the very first partners. Critio is a big sponsor. They're another, like, they're the first sort of ad tech partner of Chat GPT Roundell, a big one, Best Buy, Albertsons, Instacart. A lot of early partners, like announced partners and also some like non announced partners who I know are working with them, but nobody talked about it. And I think that is partially because of like the nature of where chatgpt. Like they have enlisted all these partners and clearly signed them all to NDAs. Like they're just not going to talk about it all at all on stage.
- [16:59]
A
And there's an owned AI chatbot opportunity as well. I think that we've covered Rufus, which is Amazon's chatbot platform and they're running ads now in Rufus. It's going to be a new form of inventory, you know, for these retail media companies themselves. And I would say I'm, I'm even on some, I want to call them podunk retailers. But you know, just the chatbot pops up in a more rudimentary form I think on a lot of retailers where they're like, how can I help you with your purchase today? Right? Like that's a place where there could be ad inventory in the future if you're a mass retailer.
- [17:38]
C
Yeah, definitely. I mean Amazon, everyone, you know, Amazon is always like the example and I think part of like this, this sort of, you know, like, oh, this like stage, like talking to a kid is almost like this like not to be mean or something, but it's like you're not gonna be an astronaut, you're not going to be A professional hockey player. Like, I'm sorry to say, like Santa's not real or whatever. Like, I think that that like does play in. Like everyone's like, oh, like Amazon's in. It's like, you're not gonna be Amazon. Like you're not, you know, like Colin was like refreshingly like, oh, everyone says they're a media company. You're not a media company company. You're not a technology company. Like, don't spend millions upon millions of dollars pursuing this because yeah, and, and it's like, like the biggest tech companies have tried to become retailers like Google. Briefly. People Forget in about 2018, Google momentarily had a program called like Google Express it was called then it was Google Shopping. And Google was going to do warehousing and fulfillment and customer service and returns. And like they spat that thing out in about five seconds. And Facebook meta, like these are trillion dollar companies. Meta has like given it all it had to make Facebook like Instagram shops and Facebook shops a thing for years and they couldn't. And like, you know, it's like being a retailer or a merchant is so hard. And like just focus on that. Like, that's enough already. So I do think that yeah, like a lot of like, yeah, not necessarily like hard truths but like important like you know, rationalizations and realities.
- [19:09]
A
I think, I think that's very, a very valid and salient point to think about because I think a lot of the rise of retail media has come from other companies copying Amazon. And I think there's things that smaller companies can be really successful at and then there's other things that they need to know to maybe stay in their lane. They're not going to be an astronaut or a hockey player with their, you know, soapbox derby car, you know, resources that they have. So interesting one to think through. I do feel like though I could definitely see tons of like white labeled chat interfaces for even smaller retailers that might recommend a certain product, you know, based on, you know, retail media partnership. I can see that Target.
- [19:58]
C
Further, Amazon is very excited about Rufus Walmart. Very excited about Sparky. Like I don't know, they've all clearly seen the same, like read the same market research. They're like, name this after dogs. Like these should be. I don't know why that's okay, I'm blanking another one. That's a dog name. But yeah, like that definitely is in a way that's just a kind of, that's a different like search box on the page like, rather than the general like search box where you go and like put in Fritos and then you go put that to your cart. Like there's just a new kind of search box and there's going to be a different sort of mix of responses that you're going to get there. Like right now I think for the most part those are organic but going to be as you said, ads. Eventually Amazon's going that way, but it is, yeah, it's, you know, it sort of is scaled and like I think the point is that like oh like if you're a retailer and you think like, oh like this is an opportunity, we're gonna like make this like Chatbot tech and we're gonna like sell it to other retailers and it's like, nah, don't try to do that. Like, don't. You don't necessarily need to think of yourself as like the tech company. But, but yeah, like manageable opportunities. Probably along those lines.
- [21:06]
A
What about since we're talking about kind of big versus small, what's your take on the opportunity for some of those mid size retailers? We've got Red Vest Media or Apron Media, that's Ace Hardware and Home Depot respectively. We've got Dick's Sporting Goods. You know, just the dollar tree. So many kind of mid size retail media networks out there. Is it looking sunny, partly cloudy, stormy for them.
- [21:38]
C
Partly cloudy, if not stormy. Like that was also part of I think the you know, the sort of realistic like willing to give you like the truths you need to know sort of approach of the IAB here. They published a report by the way, like that, you know, coinciding with the conference. And, and it's full of sort of like ominous language. Like it is not like a hype up like optimistic report. It is like consolidation is coming. Like we are not here to preserve every network. Like if you do not change, like you know, you will be aggregated or consolidated away. Like yeah, really like tough language. And I think that that's true. Like not, you know, there are hundreds of these media networks. More of them are still springing up. It's like a punchline. But there are still more of them every day. It seems like I still cover them every like a month or so. There are whole categories that are coming into the fray now. So, so yeah, at some point it's like it is hard to imagine like consolidate. Like does this, do they all just go to critio? Like do they form like joint ventures where whole like categories get together? You know, just do they stop trying to do it themselves and just say like okay, I'm going to let like the third party tech ecosystem aggregate. You know the way that like the long tail of the web makes itself manageable through programmatic. I'm, I'm not sure but I, but I, you know talking to like the iab like they're saying like there's just going to be fewer networks too. Like there will be like the old fashioned, like some of these are just gonna die on the vine and it's, he sort of said like you know they're not going to be as loud about it when it happens going away as when they launch. But like some of these have already disappeared especially in the US Companies have already like even sort of well known retailers have, have folded. So, so yeah like that, that is gonna happen. Like there will be retailers who sort of said like ah, like this was not necessarily worth the investment. We actually already had advertising revenue before. Like it actually isn't totally new, it's just sort of packaging them. You know, Macy's and Ace and Best Buy and like all these retailers had advertising revenue before. Now it's just being like, you know, sort of put together into a contemporary media network business. So, so yeah, some of them will decide not worth it or they'll just hand it off to a middleman kind of thing. They will not all end up like Amazon and Walmart with like this incredible big billion dollar profitable standalone business unit.
- [24:10]
A
To me I've always been interested and intrigued by the idea of retail media's first party data or sometimes people kind of talk about it almost as second party data. It definitely draws a through line I think between Andrew's segment and your segment James. Because I think both retail media networks and publishers do this type of retargeting or reach extension. So they get people you know, beyond I guess when they're searching for a product in the search bar. And I think it seems like it's always been much slower to take off. But to me, I mean this is just me spitballing. But if I'm maybe some kind of political advertising, you know, company maybe I want to see what Tractor Supply Media Network has to do. If there's some issue around agriculture like let's get the people buying bunny feed and cow, you know, cow stuff and target them through, through a dsp. It feels like there's so much cool stuff that could be done. But I mean I wouldn't know if I were trying to like sell retail media I'd be like how would I even know these people would care about this or, or when the Data might be a match.
- [25:24]
C
So that is definitely like a part of it. And like I said, like these retailers all had an advertising business, so their first year or two all looks great because now, you know, it's like Macy's had a couple hundred million dollars in ad business before they weren't starting from zero. So year one is like, wow, like look at this. We've raced out now you hit a plateau and there is, you have this sense like, okay, I got to go like across the web, I got to go do like retargeting. But you're, you're starting with this. You're trapped inside like shopper marketing when you're doing that, like you're, you know, you have these budgets from products you carry. They're contractually obligated to respend whatever 10% of what they do in sales back with you in shopper marketing. That's existed before all these retail media networks and so but like how do you get, how do you get to those brand dollars? Like how do you find like these new opportunities? And I agree, like I always feel like, you know, it would be so interesting to see those non endemic use cases where like, yeah, like, why not like there was, there should be gyms who like would love to target organic like protein bar purchasers from grocery stores. Why not like Albertsons makes its data available on the trade desk and you could do that. And the reason you don't is because of how friggin expensive all of that is. You don't like realize that when, when Albertsons merchants are contractually obligated to give their money to Albertsons, like there's not like, yeah, so it's worth a lot. It's kind of like, yeah, there's not that much oversight and it's, you know, worth a lot to those protein bar companies or whatever. But like all of a sudden these other companies. Oh yeah, great, amazing use cases like, like Macy's most interesting use cases is companies who want to target like weddings and like new homes and whatnot. Because Macy's is a huge like wedding. Yeah. Like gifts, registries and all that that they want to target these like life moments. But it becomes like awkwardly expensive for them to do that. The data is crazy. So, so yeah, like this is, this is the challenge is finding ways to get this retail data that everybody wants and is so lucrative and make it available to others in like feasible ways. Those examples like don't exist. You can't, you can create so many incredible hypotheticals of like, yeah, like, you know, insurance Companies. Well how they could use Walmart or Dollar General or something like that. Like Google doesn't let you target by income bracket anymore. Like shouldn't Dollar General be a really useful proxy for you or something like that? But yeah, it's just not affordable if you aren't carried in the stores yet.
- [28:14]
A
Interesting. So, so while it may be affordable for like a, you know, a deodorant company owned by P and G and or they have to pay for it no matter what, that data becomes less valuable maybe even if you're a deodorant company trying to advertise at a gym's retail media network because the pricing just doesn't justify it. That's really interesting to think through and kind of a hard problem I imagine for those networks themselves because you can't necessarily charge two different prices for your data and alienate your best customers. So. Huh. Anything else as we close out this
- [28:52]
C
episode, James one thing I would note is the standards push which a year or two ago there was so much energy, so much urgency behind this notion of retail media standardization which didn't you know, maybe came up in like one panel offhand but was not part of the agenda at all. I mentioned that to Colin of the IB and he, and he sort of was like yes, like we, you know, we're, we're not at the point where standards actually make sense because it's too, it's too early innings. Like in fact, you know the language all this year is about differentiation. Like you retailers should be leaning into like what makes you very special as a retailer with your particular footprint and the kinds of things you carry in stores and all that. So it's like rather than, rather than having like any of that urgency about standardization which like all the wind is out of the sails of those sort of initiatives. I think. Yeah, like we're rather, he said you know, we should be thinking about like okay, if we're you know, measuring incrementality like is the language should be the same. Like an advertiser should understand certain methodologies you use. If like cuz retailers have different look back windows, different like ways that they sort of measure a conversion. What a view is like all, you know, these are all different. And so even just like a retailer reporting what is an incremental conversion can mean totally different things. There's like okay, we can standardize you know, certain aspects of like this like language and you know, how we present methodologies for measurement. But, but this notion of like standard formats, standard units, standard channels, like no, if anything we're going the other way right now.
- [30:43]
A
Okay. Well, I'm sure your question about standards was music to the IAB's ears. And thank you, James, for dropping by and reporting on retail Media and Andrew, for your insights. We will see you all next week.