Podcast Summary: The CPG Guys – "Benchmarking Retail Media Networks with The Path to Purchase Institute’s Cyndi Loza"
Episode Details:
- Title: Benchmarking Retail Media Networks with The Path to Purchase Institute’s Cyndi Loza
- Hosts: Peter V.S. Bond & Sri Rajagopalan (Sri SRI)
- Guest: Cindy Loza, Senior Editor at Path to Purchase Institute (P2PI)
- Release Date: April 5, 2025
1. Introduction to Retail Media Networks (00:00 – 06:50)
The episode opens with Sri Rajagopalan discussing the burgeoning significance of retail media as a pivotal channel for brands aiming to engage consumers effectively along the purchase journey. Retailers are equipping brands with the tools to target audiences based on detailed purchasing behaviors, utilizing on-site, off-site, and in-store channels to enhance the entire marketing funnel.
Key Points:
- Growth of Retail Media: Retail media has emerged as the fastest-growing channel in the media industry over the past five years.
- Executive Education Program: An immersive four-day Retail Media Strategy Executive Education program has been launched in partnership with Cornell University and The CPG Guys, aimed at equipping industry leaders with best practices in building and optimizing retail media platforms.
Notable Quote:
“Retail media is rapidly becoming the go-to channel for brands, aiming to engage consumers with measurable performance along the path to purchase.” – Shree Rajagopalan [00:00]
2. Retail Media Investment Trends (09:52 – 16:28)
Cindy Loza presents findings from P2PI's annual Retail Media Network Ratings and Insights survey, highlighting that a substantial majority (70%) of CPG brands increased their retail media investment in 2024 compared to the previous year. This trend reflects a growing confidence in retail media's effectiveness.
Key Points:
- Investment Growth: 70% of organizations reported increased investment in retail media in 2024, up from 63% in 2023.
- Effectiveness: 80% of respondents consider retail media networks as effective or more effective than other digital media, a significant rise from 69% the previous year.
- Performance Metrics: 82% reported that retail media outcomes met or exceeded their KPI goals.
Notable Quote:
“80% of respondents told us RMNs are as effective or more effective than other digital media.” – Cindy Loza [09:52]
3. Budget Allocation for Retail Media (13:17 – 18:10)
The discussion delves into how brands allocate their budgets to retail media, revealing that most investments are incremental to existing budgets. A significant portion of retail media spending originates from shopper marketing budgets, followed by dedicated retail media budgets and national media.
Key Points:
- Incremental Spending: 70% of CPG brands allocate additional funds to retail media beyond their base budgets.
- Source of Funds: 30% derive retail media spending from shopper marketing budgets, 25% from dedicated retail media budgets, and 20% from trade budgets.
Notable Quote:
“Overall, 70% of CPG brands we spoke to said their organization's retail media spend is incremental to base budgets.” – Cindy Loza [13:17]
4. Retail Media Tactics and Effectiveness (19:41 – 25:12)
Cindy highlights the most and least effective retail media tactics based on brand advertisers' preferences. Search and sponsored products lead in importance, while in-store audio and digital out-of-home tactics lag behind.
Key Points:
- Top Tactics: Search and sponsored product ads are deemed highly important by 80% of respondents. On-site display, social retailer mobile apps, and off-site display also rank highly.
- Lower Priority Tactics: In-store audio, digital out-of-home, parking lot ads, and TV walls are viewed as less important.
Notable Quote:
“Search and sponsored product ads were deemed at least very important, if not extremely important by 80% of those we spoke to.” – Cindy Loza [19:41]
5. Challenges with Managing Multiple Retail Media Networks (25:12 – 36:39)
The conversation shifts to the complexities brands face in managing numerous retail media networks (RMNs). Cindy reveals that half of the surveyed brands work with more than five RMNs, and 30% engage with over ten, anticipating this number to rise.
Key Points:
- RMN Proliferation: Brands are juggling an average of 6 RMNs, expecting this to increase to 11 by 2026.
- Efficiency Concerns: Managing multiple RMNs can dilute focus and effectiveness, as exemplified by Georgia Pacific's experience with 26 RMNs leading to suboptimal results.
- Ownership and Expertise: A significant challenge is the lack of expertise within sales teams to effectively manage and measure investments across multiple RMNs.
Notable Quote:
“Half of our survey takers said their organizations are currently working with more than 5 RMNs, while 30% said they're with more than 10.” – Cindy Loza [25:12]
6. Leading Retail Media Networks and Areas for Improvement (31:36 – 37:32)
Cindy discusses which RMNs are excelling based on their survey, with Amazon, Instacart, Sam’s Club, Walmart, and Kroger receiving high ratings across multiple performance metrics. Conversely, some networks like Target's Roundel excel in certain areas but lag in others, such as creative freedom.
Key Points:
- Top Performers: Amazon leads in measurement capabilities and data sharing, while Instacart excels in sales growth and traffic driving capabilities.
- Areas Needing Improvement: Networks like Roundel show strengths in targeting but need to enhance creative freedom.
- Customization and Full-Funnel Marketing: The importance of aligning RMN strategies with brand objectives to ensure comprehensive marketing outcomes.
Notable Quote:
“Amazon led the way in measurement capabilities and data sharing, with 86% or more of respondents giving the network at least a good rating in those categories.” – Cindy Loza [31:36]
7. Addressing the Disconnect and Future Directions (37:32 – 46:25)
Peter and Sri reflect on the disconnect between survey data and real-time industry sentiments expressed at events like the Commerce Media Brand Summit. They emphasize the need for standardized measurement frameworks and better training for sales teams to manage RMNs effectively.
Key Points:
- Industry Disconnect: While survey data indicates strong growth and satisfaction with RMNs, real-world feedback from industry events suggests confusion and dissatisfaction among practitioners.
- Training and Education: Emphasizing the importance of programs like the Retail Media Strategy Executive Education at Cornell Tech to align industry practices and enhance expertise.
- Future Growth: Despite challenges, retail media is projected to grow, reaching nearly $98 billion by 2028, highlighting the need for structured investment and strategic management.
Notable Quote:
“If there’s an issue, training is an issue, conversations are an issue. We're serving it up on a platter.” – Sri Rajagopalan [29:27]
Conclusion and Call to Action (46:25)
The episode concludes with a strong endorsement for the Retail Media Strategy Executive Education program, encouraging listeners to enroll and contribute to shaping the future of retail media. Hosts express gratitude to Cindy Loza and highlight the importance of continuous learning and adaptation in the evolving retail media landscape.
Key Points:
- Educational Opportunity: Encouragement to join the Cornell Tech program to gain deeper insights and contribute to industry advancement.
- Continuous Engagement: Invitation for listeners to subscribe, rate, and engage with The CPG Guys podcast for ongoing education and industry discussions.
Notable Quote:
“You own it, you shape it. You will get the outcomes that you want.” – Sri Rajagopalan [30:25]
Final Thoughts:
This episode of The CPG Guys provides a comprehensive analysis of current trends in retail media networks, backed by insightful survey data from the Path to Purchase Institute. It underscores the critical need for effective budget allocation, strategic management of multiple RMNs, and the importance of education and training to navigate the complexities of the retail media ecosystem. The hosts and guest collaboratively highlight both the successes and challenges within the industry, offering valuable takeaways for brand marketers striving to optimize their retail media strategies.