Brand Retail Media Spend Sentiments from CES LIVE with CVS Media Exchange’s Parbs Dhariwal and Andrew Lipsman

Summary

The CPG Guys Podcast: Brand Retail Media Spend Sentiments from CES LIVE with CVS Media Exchange’s Parb Dhariwal and Andrew Lipsman

Release Date: February 2, 2025

In this enlightening episode of The CPG Guys, hosts Peter V.S. Bond and Sri Rajagopalan delve into the evolving landscape of retail media spend, drawing insights from a live discussion at the 2025 Consumer Electronics Show (CES) in Las Vegas. Featuring esteemed guests Parbinder Dhariwal, Vice President and General Manager of CVS Media Exchange, and Andrew Lipsman, founder of Media Ads Commerce and a respected industry analyst, the conversation navigates the future of retail media, the integration of loyalty programs, and the shifting dynamics of marketing budgets.

---

1. Introduction to the Panelists

Timestamp [04:15] - [04:50]

Peter V.S. Bond kicks off the episode by introducing the panelists:

• Andrew Lipsman: An industry analyst with a wealth of experience at companies like eMarketer and founder of Media Ads Commerce.

• Parbinder “Parv” Dhariwal: General Manager and Vice President for CVS Media Exchange, the retail media arm of CVS Health.

---

2. Research Findings: Brand Retail Media Investment in 2025

Timestamp [05:41] - [07:24]

Andrew Lipsman presents his recent research, revealing brands' expectations for retail media investment in 2025. He asserts that the past years laid the foundation for a holistic integration of retail media into the broader marketing strategy.

Andrew Lipsman [06:25]:
"This year I think everything that's been happening is an undercurrent. The last couple of years is starting to come together holistically where... you can't just have E commerce off in the corner."

---

3. Evolution to Full Funnel Retail Media

Timestamp [07:24] - [08:27]

The discussion shifts to the concept of "full funnel retail media," highlighting the transition from solely focusing on lower-funnel E-commerce activities to encompassing upper-funnel strategies like streaming TV and in-store media.

Andrew Lipsman [07:24]:
"You can't just have E commerce off in the corner."

Parbinder Dharawal [08:27]:
"Yeah, well I think the differentiator that we talk about in the retail media space is you have retail media that has loyalty programs and there's retail media that does not have loyalty programs."

---

4. The Role of Loyalty Programs in Retail Media

Timestamp [09:17] - [10:29]

Parbinder emphasizes the critical role of loyalty programs in enhancing retail media effectiveness. These programs provide valuable consumer data, ensuring high signal fidelity and enabling precise targeting and measurement.

Parbinder Dharawal [09:17]:
"We see a 90 plus percent, one to one match rate on the consumer because of our loyalty program."

Andrew Lipsman [10:22]:
"And that connective tissue is the loyalty program. That data fidelity is everything that fuels the closed loop targeting measurement."

---

5. Market Growth and Shifts in 2024 to 2025

Timestamp [11:00] - [12:28]

Reflecting on 2024, Andrew notes steady market growth driven predominantly by giants like Amazon and Walmart. Looking ahead to 2025, he anticipates a surge in sophisticated upper-funnel advertising and the burgeoning significance of in-store retail media.

Andrew Lipsman [11:49]:
"We are going to get very sophisticated upper funnel advertising with great targeting data and we're going to see it start to explode on TV screens."

Andrew Lipsman [12:16]:
"It's the TV of the future because it has that scale and the chance to reach people with consumer brand messages in, in a, a high quality environment."

---

6. In-Store Media Innovations: Digital End Caps and Screens

Timestamp [22:12] - [26:10]

Parbinder details CVS Media Exchange's advancements in in-store media, including the development of digital end caps and screen networks. These innovations aim to enhance consumer engagement and drive incremental sales through high-quality, contextually relevant advertising.

Parbinder Dharawal [25:37]:
"One in five consumers will purchase or make an action as a result of what they see on the screen."

Andrew Lipsman [24:16]:
"That is the most incrementality."

---

7. Measurement Metrics: From ROAS to Incrementality

Timestamp [35:19] - [37:43]

A critical discussion arises around traditional metrics like Return on Ad Spend (ROAS). Andrew challenges the efficacy of ROAS in retail media, advocating for a shift towards incrementality to better capture the true impact of advertising efforts.

Andrew Lipsman [35:19]:
"ROAS that they're still addicted to... it's just a sale that happens to happen afterwards."

Peter V.S. Bond [36:16]:
"In store retail media... it is closed loop performance marketing. It is such a better tool, right?"

---

8. Shifting Budgets: From Linear TV to Retail Media

Timestamp [31:21] - [34:18]

The conversation explores the potential reallocation of marketing budgets from traditional linear TV to retail media. Both Parbinder and Andrew highlight the increasing effectiveness and measurement capabilities of retail media, making it an attractive alternative for reaching key demographics.

Andrew Lipsman [32:28]:
"I think we're really going to have to see it to understand it. Once you start to see these stores look more like media channels and have a level of ubiquity, that alone is going to do a lot of the heavy lifting."

Parbinder Dharawal [34:18]:
"With the right measurement... I think we can definitely start to shift that."

---

9. Global Perspectives: US vs Europe

Timestamp [16:00] - [17:58]

Comparing the US market to Europe, Andrew and Parbinder discuss how European retailers, exemplified by Tesco, have successfully integrated in-store media, overcoming challenges that the US market still faces. This contrast underscores the importance of collaboration and strategic investment in retail media.

Andrew Lipsman [16:19]:
"The biggest grocer over there. And they're doing all sorts of in store media."

Parbinder Dharawal [17:58]:
"Whether it's engagement, education, whether it's around disease state awareness, whether there's multiple different ways in which we can bring that narrative into those local communities..."

---

10. Education and Awareness in Retail Media

Timestamp [15:23] - [28:42]

A recurring theme is the necessity for education and increased awareness among CMOs and brand marketers about the benefits and opportunities within retail media. Parbinder emphasizes the industry's collective responsibility to demystify retail media and demonstrate its efficacy through transparent measurement and case studies.

Andrew Lipsman [26:52]:
"They're still not investing against it enough because they're more expensive like the..."

Parbinder Dharawal [28:27]:
"We have to help people trust the numbers... there's got to be transparency in the way in which we measure."

---

11. Future Outlook and Conclusions

Timestamp [32:29] - [38:39]

As the episode concludes, both panelists express optimism about the future of retail media. Parbinder highlights CVS Media Exchange's commitment to innovation and measurement, while Andrew underscores the transformative potential of in-store media. The hosts encourage listeners to engage further through available resources and upcoming events, reinforcing the podcast’s role as a pivotal source of industry insights.

Parbinder Dharawal [37:22]:
"Yeah. It is. Awareness is... [emphasis on incrementality]."

Andrew Lipsman [37:43]:
"RCausal modeling... RMNs always pop as by far the most incremental channels by far."

---

Key Takeaways:

• Full Funnel Retail Media: Transitioning from purely E-commerce to encompassing upper-funnel strategies enhances brand engagement and measurement capabilities.

• Loyalty Programs: Essential for high-fidelity consumer data, enabling precise targeting and effective attribution.

• Measurement Shift: Moving from ROAS to incrementality provides a more accurate assessment of advertising impact.

• In-Store Innovations: Digital end caps and screen networks represent significant opportunities for driving incremental sales.

• Budget Reallocation: Retail media offers a compelling alternative to traditional linear TV, especially with its advanced measurement and targeting.

• Global Best Practices: Learning from European retailers can accelerate the adoption and effectiveness of retail media in the US.

• Education and Transparency: Critical for gaining trust and demonstrating the value of retail media to CMOs and brand marketers.

This episode of The CPG Guys offers a comprehensive exploration of the current trends and future directions in retail media spend, providing valuable insights for brands, retailers, and marketers seeking to navigate the complex digital landscape.

Transcript

[Peter Vs Bond]

Welcome to the CPG Guys Podcast. Your host, Shree Raja Gopelin and Peter Vs Bond explore how brands and retailers.

Engage consumers in an increasingly digitally driven world.

And now, here are the CPG Guys. Hello and welcome to the CPG Guys Podcast. I'm your co host pvsb and when I'm not sitting in this chair co hosting the podcast, I serve as Head of Industry and Client Engagement at Flywheel, the E Commerce accelerator division of Omnicom. My co host Sri is not with me, but he is in this episode. He's the AV guy handling the recording of this episode. This episode was recorded in Las Vegas at the 2025 Consumer Electronics Show CES. More about that later. Let me go through some housekeeping. If you're not already following us on LinkedIn, please do so. Go to LinkedIn, type in cpguys and if you follow us on podcast platforms, in particular Apple and Spotify, please leave us a rating. It helps feed the algorithm, makes our podcast more discoverable by other industry contemporaries like you. And of course leave a review as well because we want to know what you think and help guide the direction of who we have on what we talk about on this episode. While you're at it, make sure you're following our sister podcast, the FMCG Guys and CPG Scoop. And lastly, I'll make mention of Check the digital liner notes this episode for links to all our podcasts and our sister podcast, the Raj Family Media Empire and of course the Cornell University Retail Media Strategy Executive Education Program taking place this May 5th through the 8th in New York City on Roosevelt island at Cornell Tech. It's going to be one of those rooms where it happened. And if you are a CMO level brand marketer or you are a retailer in the retail media space or a lead merchant, this is a room you're going to want to be in because we're going to be building strategy around the future of collaboration between brands and retailers in a performance marketing driven world. So check out the liner notes of this episode. You'll find a link Cornell and we hope to see you in New York City this summer. With that, I'll make mention of the fact that today's episode was recorded on the second day of ces. It was at Las Vegas in the Park MGM Hotel. It was a breakfast that was hosted by CVS Media Exchange. Our two guests are Parawal, the Vice President General Manager of CVS Media Exchange, the retail media arm of CBS Health, and Andrew Lipsman, founder of Media Ads Commerce and a notable industry analyst as they talk about survey results that was field that were fielded by Andrew and indicate how brands are planning to spend against retail Media in 2025. I hope you find this conversation to be as interesting as I did. Moderating the panel. With no further ado, here's our episode.

Hey, everybody. Thank you for joining us this morning. I hope you're all having a really great ces. Not too hungover from whatever festivities you were at last night. I'm pbsb. I'm one of the CPG guys. My partner Sri is the cameraman. He's doing the AV check for us today. But I want to thank you all for joining us this morning at this breakfast briefing that is sponsored by our friends at CBS Media Exchange. Before we get to our topic, I want to introduce to you our two panelists. First and foremost, he is an analyst in the industry with great experience at companies like eMarketer. His name is Andrew Lipsman and he is the founder of Media Ads and commerce. Did I get that right?

[Andrew Lipsman]

You got it right.

[Peter Vs Bond]

Okay. Nailed it.

[Parbinder Dharawal]

Boom.

[Peter Vs Bond]

Number one done. And on to his left. Most people need no introduction, but I'll do it anyhow. In his case. He is the general manager and vice president for CVS Media Exchange, the retail media arm of CVS Health. His name is Parbinder Dharawal. We go. He goes by the name of Parv. So Parvs. Andrew, welcome.

[Parbinder Dharawal]

Thank you. Pizza.

[Peter Vs Bond]

It's good to have you both here to be here. I'm gonna. I will do our best to be louder.

[Parbinder Dharawal]

Can you hear us? Can you hear us at the back?

[Peter Vs Bond]

Can you hear us? Okay. Okay.

[Andrew Lipsman]

Who's on the mics?

[Peter Vs Bond]

I don't know. That's it.

[Parbinder Dharawal]

That's the mic. It's.

[Peter Vs Bond]

These mics are for the camera. So that's it. Unfortunately, we'll do our best to talk to all of you. If at any point you're not hearing us, just raise your hand and that'll signal us to talk even louder. So we're gonna talk a little bit about this morning. Some research that Andrew conducted with quite a number of consumer packaged goods companies about their expectations on retail media investment in 2025. That report's gonna be available through Andrew's site. I'm posting on LinkedIn and I'll post it on LinkedIn. Okay, good.

[Andrew Lipsman]

After this.

[Peter Vs Bond]

Good. So what I'm gonna do is I've got a series of questions for Andrew that relate to the research he's done. And after he's answered, I wanna get Parb's approach or his perspective from the point of view of CVS Media Exchange on how they are reacting to what these brands are telling us about how they're planning to invest in 2025. Sound good?

[Parbinder Dharawal]

Sounds good.

[Peter Vs Bond]

All right, let's do it. So I'll start with Andrew. Andrew, you recently wrote an article entitled 2025 is the year of full funnel retail media. Right. What is driving the prediction behind this?

[Andrew Lipsman]

Yeah, I mean I think we've seen over the last couple of years, obviously the first era of retail media has been on site, on site search. Specifically we've seen that we're starting to move up the funnel into off site, into streaming tv, which I think is really starting to come into center stage and then in store. And that's both in store media and increasingly the use of in store purchase data. Right. We forget about this in this E commerce view of the world, but that's 85 to 90% of sales. Like that's where the data is. That's going to fuel the targeting and the measurement, the attribution of the closed loose, closed loop promise. So this year I think everything that's been happening is an undercurrent. The last couple of years is starting to come together holistically where you know, the conversation shifts, I think to the cmo. Like I'm pointing directly at the CMO this year and saying you can't just have E commerce off in the corner.

[Peter Vs Bond]

It can't be a separate discipline.

[Andrew Lipsman]

Not at all. And you know, almost forgotten. Like let the E commerce people handle that. No, not good enough.

[Peter Vs Bond]

And not only the E commerce but like just the trade shopper, marketing person where a lot of retail media networks are seeing the, the, the activation occurring.

[Parbinder Dharawal]

I think, I think, I think we got a little obsessed as well, don't we with E commerce. Like everybody was all about E comm, E comm, growth of E comm. How do we drive E comm? I think we've just got to. That, that's got to change a little bit. Right. Because it's just not necessarily the way.

[Peter Vs Bond]

Because that's you're always, it's more focused on lower funnel activation when you talk about E comm.

[Parbinder Dharawal]

Correct?

[Peter Vs Bond]

Yeah, yeah. So parbs from you. So based upon what, what Andrew just shared with us, how are you guiding CVS Media exchange to deliver a full funnel value proposition to brands to that end, not to not think just about what's happening on site? How does it offer brands scaled audiences full funnel?

[Parbinder Dharawal]

Yeah, well I think the differentiator that we talk about in the retail media space is you have retail media that has loyalty programs and there's retail media that does not have loyalty programs.

[Peter Vs Bond]

Right.

[Parbinder Dharawal]

And if you think about the way in which the consumer behaves and shops, there is fluidity, right? Fluidity from an E commerce engine into a physical store environment. And we're consistently seeing that. Right. Depending on the use need, depending on the state of the consumer, depending on the products that they're actually purchasing. Having that level of connectivity with the consumer across all of the channels, that's where loyalty comes in.

[Peter Vs Bond]

So you've got, what's the value proposition that a robust loyalty program offers in terms of audience building when you think about media?

[Parbinder Dharawal]

Well, it's, it's a tremendous amount of signal, right? Like we're getting signal, it's signal. And lack of signal loss as well. Because if you think about a consumer that goes into a store and purchases a product and pays cash, there's automatic signal loss on that consumer right off the bat.

[Peter Vs Bond]

Yeah.

[Parbinder Dharawal]

The loyalty program connects that consumer all the time. Like I know, however they shop, however they shop. And we see a 90 plus percent, one to one match rate on the consumer because of our loyalty program. So that attribution model becomes much more effective. When you talk about pointing at the cmo, well, you've got to point to the CMO to show the efficacy of the channel. And if we don't show the efficacy of the channel, it starts to become a PR problem. And it doesn't matter whether you're creating full funnel tactics or not, it's how do we show them that the data that we have, the channels that we have, the media that we're targeting, our consumers are showing efficacy across the entire marketplace.

[Andrew Lipsman]

And you can't do a true full funnel program across all the channels and get the scale that you want that a CMO wants. If you don't have the connective tissue.

[Peter Vs Bond]

Okay.

[Andrew Lipsman]

And that connective tissue is the loyalty program. That, that data fidelity is everything that fuels the closed loop targeting measurement.

[Peter Vs Bond]

Okay. So looking back at the last couple of years and particularly 2024, did you see it as being a stagnant or a growth year for retail media? And if it, and if it was growing was in the past, it was primarily driven by lower funnel on site activation. What was different about 2024 and what do you see going into 2025 around the full funnel aspect of RE and the promise of retail media on a full funnel basis?

[Andrew Lipsman]

Overall market growth, you know, still in the 20% range, but heavily skewed by Amazon and Walmart.

[Peter Vs Bond]

Okay.

[Andrew Lipsman]

Which are 85% of the market. Very mixed bag from, from the rest of the market. You know, I think to some extent this year, this past year felt like a bit more running in place. The easy money wasn't there. Like it was, I've got a Billy.

[Peter Vs Bond]

Joel song running through my head now. Easy money. I got it. Okay.

[Andrew Lipsman]

Yeah.

[Peter Vs Bond]

Now it's going to be stuck all day. Thank you for that.

[Andrew Lipsman]

We had years of incremental budgets and all this intense focus on E commerce and now the world has rationalized a bit and so RMN is actually to go out and earn it. And so there's been a lot of evolution that I think has been happening behind the scenes. And what I'm excited about as we shift to 2025 is it's ready to manifest in a very real way.

[Peter Vs Bond]

Right.

[Andrew Lipsman]

We are going to get very sophisticated upper funnel advertising with great targeting data and we're going to see it start to explode on TV screens. Like that's huge. That's a huge moment that we're at. And then in store retail media gets real. I mean, I've said a million times, this is the next major media channel.

[Peter Vs Bond]

It has huge scale with larger audiences actually than what you see audiences, mega audiences. Right.

[Andrew Lipsman]

I, I compare it. It's not to me, not shop or marketing. It's tv. It's the TV of the future because it has that scale and the chance to reach people with consumer brand messages in, in a, a high quality environment.

[Peter Vs Bond]

And that's a, that's great news to advertisers who are watching their linear television and print media audiences dwindle. Yeah.

[Andrew Lipsman]

And you, right, you can't reach those 18 to 49 year olds on linear TV anymore. That's where you can reach them.

[Peter Vs Bond]

How many people don't subscribe to cable anymore, just do streaming? Like that's huge. The fact that we've got a majority of people in this room, that says a lot. Right. So Parv, from your perspective, how are you thinking about this change in mix, the level of spend that's occurring? Like what are you doing from a CVS Media Exchange perspective to prepare for this transformation?

[Parbinder Dharawal]

Yeah, I think the last 12 months for us has been, we've seen growth, right. Pretty significant growth across our platform. So I'm not, I'm not overly concerned with what's coming out of the report right now.

[Peter Vs Bond]

Okay.

[Parbinder Dharawal]

And again, I don't think all retail media is created equal. I think we've got a very different kind of asset, not just with our store network, but with our loyalty program and all the rest of it that we keep talking about.

[Peter Vs Bond]

Okay.

[Parbinder Dharawal]

I think what the challenge that the retail media has, it has a PR problem. And the PR problem is that we've gone in as we've built certain retail media networks and we've gone in with strong arm, the marketing departments to spend money. It's like, hey, you got to spend money and if you don't, there's ramifications. I think we've got to take just a step back and we've got to be able to drive performance for every single dollar that's coming through our network. And if you cannot stand by that and you cannot stand by the way in which you are driving performance for your advertising, what's the key to driving.

[Peter Vs Bond]

Performance for the brands? What do they need to know?

[Parbinder Dharawal]

They need to know incrementality.

[Peter Vs Bond]

So measurement is a core component.

[Parbinder Dharawal]

Yeah, absolutely. But they also need to understand that it's measurement. But it's also, how does my media that I spend on CMX or other retail media networks affect the marketplace?

[Peter Vs Bond]

Yes.

[Parbinder Dharawal]

Just to think about it, like, we're all consumers. We see an ad, it's an ad that's co branded with cvs. I would love for that consumer to purchase at cvs and we have an enormous amount of brand loyalty in that regard. But there are times when that consumer will go and purchase across the marketplace. Yeah, it just happens. Right. But I think we've got a PR problem and I think we've got to figure out how do we shift that narrative. Certainly at the CMO level, at the brand level, in order to really unlock.

[Peter Vs Bond]

The CMO level is important because as Andrew alluded to, most of them have outsourced it to a group of people. They may not have as deep a knowledge of what retail media is. And until that is a core discipline in the marketing quiver of arrows, it's not going to accelerate as quickly as it should be.

[Parbinder Dharawal]

Just one thing. That responsibility is not just on cmx. That responsibility is the industry.

[Peter Vs Bond]

Oh, absolutely. It is.

[Andrew Lipsman]

Yeah, yeah. Aware. Awareness is So, I mean, CMOs right now, like Harb's alluded to this, the attention and investment on retail media is now like as a channel in the middle of the pack. Okay.

[Peter Vs Bond]

Yep.

[Andrew Lipsman]

It's a thing. Right. But in store, retail media is way behind the curve. CMOs have not focused on it at all. It's not on their radar, they're not organizationally resourced for it. So there's. That's the sort of pessimistic view. To me, I see it as all.

[Peter Vs Bond]

I would argue to some degree that that is a situation that is relatively unique to the United States, because when you go outside of the United States, retail media groups actually have complete ownership of everything that's activated in store, including, like traditional displays and stuff. Right.

[Andrew Lipsman]

It can be done. That's the majority of revenue for retail media networks in Europe. I mean, I've been pointing recently to Tesco as an example.

[Peter Vs Bond]

Yeah, right.

[Andrew Lipsman]

The biggest grocer over there. And they're doing all sorts of in store media. So.

[Peter Vs Bond]

And that's. There's. There's a bit of a legal impediment in that, in the whole Robinson Patman trade fund versus brand fund. But good retail media networks partner with their merchants and develop an approach. I've got to imagine that your team works very closely with the merchants on investment.

[Parbinder Dharawal]

Andrew referred to it recently on the CPG Guys podcast that he did, which is there's an education problem. Right. There's an education challenge. And we've got to work with the merchant organization in order to help them understand the benefits that retail media can really bring. In store is one of those components. Because the in store peace has been sitting with the merchant organization for quite some time. I think there's a third leg of the stool here as well. When we think about in store, as you think about our footprint, we have around about 9,000 locations, significant traffic coming through those stores. What we are looking at, we're looking at a business which is not just like one size fits all. And our assortment and selection across the entire fleet is one. But what we're doing is we're looking at how do we localize and bring localized content and assortment into each individual CVS store. So if you look at it right, if you look at the store in Times Square is going to have a very different assortment to the store here on the Strip.

[Peter Vs Bond]

Of course.

[Parbinder Dharawal]

Right. And it should do.

[Peter Vs Bond]

You don't even. A lot of the pharmacies on the strip don't even have a pharmacy.

[Parbinder Dharawal]

Correct, right, correct.

[Peter Vs Bond]

They are essentially.

[Parbinder Dharawal]

Well, I'll challenge that both of them.

[Peter Vs Bond]

Do, but I'll make some in. In the. In the channel.

[Parbinder Dharawal]

No, no, no. But what it does, the third leg of the stall is, is around marketing. Yeah, it's around how do you bring localized content to the consumer in that environment, Whether it's engagement, education, whether it's around disease state awareness, whether there's multiple different ways in which we can bring that narrative into those local communities that we serve every single day at cbs.

[Peter Vs Bond]

And I think that Andrew In a, in some research you did last year, you highlighted the fact that in thinking about in store, expectations have to change right now you have to think more, less about personalization and more about relevance. Yes.

[Andrew Lipsman]

Yeah, well, I mean, the medium is the message and the store is a medium and the context is where you get this relevance. Right. So thinking about cvs, I mean, you know, allergy counts may be very high one day.

[Peter Vs Bond]

Right.

[Andrew Lipsman]

You have a million examples of where this works. So I think there's contextual relevance that really unlocks a lot of the value. You also mentioned the local aspect of it. You know, I've been, I've been beating the drum about TV dollars, linear TV dollars needing to come over into in store, even if that doesn't seem logical at face value. The second piece of that is there's also these local TV advertising dollars. Right. That's a $20 billion market that also need somewhere better to go that's being.

[Peter Vs Bond]

Underserved by the demise of local newsprint and other sources of local news.

[Andrew Lipsman]

Yes. And so those dollars need somewhere to go. And again, when you have these, the local context that stores can provide, I think that's the natural place.

[Peter Vs Bond]

Andrew, a recent article in Retail Brew was headlined pharmacies are ready to get more mileage as retail media networks. You were quoted in this article as saying where the market is evolving is finally playing to pharmacy strengths. Pharmacy retail media networks are ready for prime time. What did you mean by this?

[Andrew Lipsman]

Well, they finally caught up to you guys. No, I mean, that's the reality. Look, pharmacy retail media networks, right? E commerce, that wasn't part of the business. Right? You have on site business that's going to be more display. But that wasn't the bread and butter. But where the market's going is in store where you have these massive store footprints and audiences, audiences, huge transaction volume and these other experiences of where the market is going now is just coming right into your sweet spot.

[Parbinder Dharawal]

Right? And the engagement that we have from a brand loyalty perspective and the categories that matter to the consumer, health, wellness, beauty, personal care, general merchandising, or, you know, boxes of Las Vegas chocolates, if you go into the one on the strip, you know, the engagement that we have with that consumer around those particular really, really important areas and product categories to that consumer, that's where, you know, we can serve that consumer and the data asset that we have again through extra care, really, really enables and bring, brings that to life. So yeah, we're, we're glad, we're glad that they finally, before I Forget SRI.

[Peter Vs Bond]

Wanted me to ask you who's the merchant we need to talk to about. Get about getting you guys swag into CVS stores on the, on the, on the Strip. Is there someone we should.

[Parbinder Dharawal]

There is.

[Peter Vs Bond]

You connect us.

[Parbinder Dharawal]

There is. And I, I'm, I'm sending an email right now.

[Peter Vs Bond]

Okay. We think it's gonna. We think it could be a big category.

[Parbinder Dharawal]

No, I think it's huge. I think it's huge and I think we should create its own little sort of section of it. And I see a big massive cutout of both you and sri.

[Andrew Lipsman]

Oh my God.

[Parbinder Dharawal]

Next to it.

[Peter Vs Bond]

Love that. Maybe, maybe on the sphere. Ooh, okay. Sorry. I digress. So par. Knowing what Andrew is saying about where the future is going in terms of the opportunity. How are you adjusting your offerings to brands? Looking to engage consumers in store or off site or whatever? What are you focusing on?

[Parbinder Dharawal]

Yeah, we're going to be, we're going to be really bullish on in store. This year we've been quietly building our in store screen network. Whether that's screens at the pharmacy, you're going to see other screen placements coming in. We've been testing on our end caps, digital end caps, and bringing them to life. We believe that there is an opportunity around measurement as well. So we're working on something as it relates to that. There's additional data signals that we're getting as well. We announced recently that the security shrouds that are a challenge from a consumer perspective, but they're an important part of our business because shrinkage is real. They're also, we're having an unlock device on that which is accessible through the Extra Care app. And that also enables us to really understand about how consumers are engaging in the in store environment. The other piece that we're really bullish around is how do we bring medium such as the audio across the entire network or all the screens into a programmatic environment to the point to you saying around local and for us to tap into local budgets, bringing that programmatically and enabling those screens and enabling the ad placement on those screens is really fundamental to our strategy this year. So it's exciting. Yeah, it's really exciting. It's exciting.

[Andrew Lipsman]

Can I pull out one detail from Harb has mentioned just because I want to underscore the importance of this.

[Peter Vs Bond]

Yeah.

[Andrew Lipsman]

The digital end cap he mentioned.

[Peter Vs Bond]

Right.

[Andrew Lipsman]

This is an area of the store that I think is harder to go into and where a lot of retailers, it'll probably be the last place they go. Now there's A digital end cap on site, which is basically sponsored brand or sponsored brand video. That is the most effective ad format in retail media today.

[Peter Vs Bond]

It drives most. Put through most conversion.

[Andrew Lipsman]

No, no. The most incrementality.

[Peter Vs Bond]

The most incremental.

[Andrew Lipsman]

Incremental.

[Peter Vs Bond]

That is what brands want to hear, that they don't.

[Andrew Lipsman]

They're still not investing against it enough because they're more expensive like the.

[Peter Vs Bond]

The prop. The historical problem with a lot of this is am I just selling volume to people that we're gonna buy it anyhow, and therefore I'm investing in an end cap that's not driving incremental volume. You're telling me when you have a screen on an end cap, it drives incremental sales?

[Andrew Lipsman]

It drives incremental sales. And the mechanism by which this works, I think, is that you have high quality context and creative close to the point of sale. Like that is the holy grail for marketing. It makes so much logical sense now. Bring it into the physical store. More sales happening there, bigger screen formats. I think we don't have the research yet. I think that's going to be the most impactful ad format maybe in all of marketing.

[Parbinder Dharawal]

We did some research actually, and it wasn't through cms, but it was through our enterprise organization. And we're trying to get a sense of how consumers are engaging and more importantly, what's their desire to have more screens or less screens. And we found that around about 52% of our consumers find the information that they see on screens incredibly useful to our shopping experience.

[Peter Vs Bond]

They drive big, high value.

[Parbinder Dharawal]

Actually, the piece that goes further than that is that one in five consumers will purchase or make an action as a result of what they see on the screen.

[Peter Vs Bond]

That's huge.

[Parbinder Dharawal]

Which is massive. Right. Like one in five. We have five million people coming through our stores every single day for our entire network.

[Peter Vs Bond]

When you think about a traditional fsi. Yeah, right. What would you see in terms of an activation of that? Like half a percent? I mean, it was like, it was inconsequential. One in five. 20%.

[Parbinder Dharawal]

One in five.

[Andrew Lipsman]

Wow.

[Parbinder Dharawal]

One in five. And then if you couple that with scale, then it becomes a really important medium. Right. And that's why we're very bullish around it.

[Andrew Lipsman]

So it drives incremental purchases. And when that happens. Right. The retailer wins. The brand whose advertising wins, the consumer wins because they actually get introduced to a product that they might. That they need and wouldn't otherwise get.

[Peter Vs Bond]

So, Andrew, I want to get to your survey and the work that you did. You asked CMOs and brand leaders about where they are with adoption and investments. My question is, are brands ready to go deeper into understanding and executing retail media or is search still what anchors their focus on retail media?

[Andrew Lipsman]

They're still anchored more towards the past. They need to evolve. Some are more ready to evolve than others. But right now I asked what's where is your next dollar of retail media investment going to go? And the top three responses were all different forms of on site. Then after that it's all off site and then in store is still near the bottom.

[Peter Vs Bond]

Is that again due mostly to a lack of, in your perspective, a lack of awareness and education about what those other ad units offer and why they're valuable?

[Andrew Lipsman]

Yes. It's not on their radar. They're not thinking about it. We need to make them think about it. And certainly there's a playbook for making that happen. Again, we all point to Europe. We've seen it can happen. It should. And also their organizations right now are not configured for it. They don't have. Only 16%. Only 16% of the brands surveyed have a person who's dedicated to in store retail media parbs.

[Peter Vs Bond]

How is your phenomenal team that works with brand advertisers and brands, how are they focusing on educating and creating awareness across the full funnel of opportunities through CBS Media Exchange?

[Parbinder Dharawal]

Yeah, it's, it's, it is that awareness and it's, it's, it's about showing the efficacy of the medium. It's, it's case studies. But the most important thing around this, whether it's the brand level or even at the agency level, is how do you help brands buy these formats? Right. It's ease of purchase. And it can sometimes be a little clunky to buy these formats.

[Peter Vs Bond]

Right.

[Parbinder Dharawal]

The creative assets are a little bit different. The store allocation is something that you have to continually consider, do I have my products within that particular store? So it's a lot of education right now that we're bringing to market and we have a team dedicated to this now.

[Peter Vs Bond]

And as a core component of your, your focus around. I know you've done a lot of work with the, the IAB around standardization of activity. Do you think that is a critical component around the education to get people comfortable with treating retail media as media?

[Parbinder Dharawal]

Correct. Yeah. Yeah. I consistently raise this flag because I think it's important if we're gonna be as big as, you know, some of the social businesses have grown over the course of the Last sort of 10, 12 years if we're gonna really make an impact on advertising. As a whole.

[Peter Vs Bond]

Yeah.

[Parbinder Dharawal]

We have to make sure that there is. There's gotta be transparency in the way in which we measure. There's gotta be a way in which we collectively work with the industry to drive more awareness for retail media. There needs to be education and everybody needs to feel comfortable about it not being like pushed into making the purchase. Let them understand the efficacy of what we can bring and then let's, then let's make the purchase. And that's what we've been focusing on around. Right. Like you've got to get, you got to get the fundamentals really, really sound.

[Andrew Lipsman]

So, yeah, the majority of brands right now find planning, executing and measuring in store media. Yeah, Difficult, difficult. So that's an impediment's gotta change. On the awareness issue. On the awareness issue, though, one thing I'm optimistic about, I'm very happy that we have large retailers like CBS who are gonna be rolling out screens in full force because you have to see it to understand it. Once you start to see these stores look more like media channels and have a level of ubiquity, that alone is going to do a lot of the heavy lifting where all of a sudden these CMOs are going to walk into the stores and say, oh, I need to be on top of this. They're not there yet.

[Peter Vs Bond]

So continuing on the theme of in store retail media, there is no greater advocate for in store retail media in our industry than you. You are fair. No, really. No, really, I'm that. No, but. No, but I say that in jest, but the last part in Jess, but in all seriousness, you really are. And I guess my question to you is this, and I made reference to this earlier in our conversation. You said that physical stores are the new tv. Why are you inviting that comparison when most brands, frankly, are still executing retail media on all but like the top two or three retail media networks in terms of dollar volume as a, as a shopper marketing function, I believe it.

[Andrew Lipsman]

Warrants national media dollars. I mean, I think that's where this market needs to evolve to. Right. We can't just keep shuffling budgets around these national media dollars. They're in a bubble in a sense, because the inventory on TV gets more and more constrained and yet the TV market kind of stays the same. So CPMs have doubled. They've doubled over the course of the last decade.

[Peter Vs Bond]

And the way traditional linear television is largely measured is through marketing mix modeling. Right? Yeah. Which I don't know about you, but that's. To me, that's, that's another term for alchemy. Like there's there you want. If you, you have to believe in some projection model. Like the great thing about in store retail media is it is closed loop performance marketing. It is such a better tool, right?

[Andrew Lipsman]

Well, it's both. I, that's, that's the brilliance of it is to me I see it as both. Yeah, I'm not shooting a TV by the way. I think TV is an incredible media. Right. Nothing else does the 30 second storytelling. It's just you have less of an ability to do that and less of an ability to reach people.

[Peter Vs Bond]

Right.

[Andrew Lipsman]

So to me that may be the foundation you need to extend your reach with the next best version of that, that mass reach advertising that's in store media. And I think what shifts the budgets is the proof point because we do have the closed loop measurement when you show that the dollars. I've asked a lot of brands over the last week especially what's it going to take to really get the CMO to look differently and they said it's going to be the proof points on incremental sales parvs.

[Peter Vs Bond]

You've been in this industry for a number of years, cvs, Media Exchange and prior. In your estimation and your knowledge of working with brands, is it realistic that you see brands are going to start shifting their national linear television budgets into performance marketing and retail media to drive what. What they can't deliver anymore?

[Parbinder Dharawal]

Yeah, I. The short answer is yes. It's category by category and it's very much dependent on what we're seeing in the market. You know, where there are certain categories where the shifts that are happening from linear into retail are phenomenal and we're definitely benefiting that from. From that as cmx. I think there are other categories that it might be a little bit more challenging because I think there are. They've always done it. It's a different kind of education. And then they might be certain categories that are not necessarily sort of nascent to the way in which our business are today. But I do think, you know, with the right measurement, with the ease of purchase of the actual medium, with the education that we can drive at the brand and the CMO level, I think we can definitely start to shift that.

[Peter Vs Bond]

Okay, so we've now published over 450 episodes of the CPG. Guys, if you thank. Thank you. That was, that was a very subtle way of getting. No, really, don't stop. No, don't stop. Don't stop. But if you go back to episode two, SRI uses a term that at the time I had never heard of in my life. And you know, on the show we like to break down acronyms. And he used the term roas. I had never done digital advertising, so I didn't know that ROAS meant return on ad spend. That has been for many years the original and fundamental measurement that you heard talked about in retail media. So my question to you, Andrew, is should we still be talking about roas? Does it have a place? And what really should brands and our brands focused on that are really good at retail media? What are the metrics that they're most focused on today?

[Andrew Lipsman]

Well, roas that they're still addicted to. This is the story of digital advertising. We often use the most available metrics, even if it's not the best metric. And sometimes those metrics can lead you in the exact wrong direction. Yeah, I've talked to some folks who I've worked with over the course of my career who are focused today on retail media, and they're like, I just found out that return on ad spend isn't incremental. This was this huge surprise. They thought that should, like, that's what the term should be defined as. It's like, nope, this is just a sale that happens to happen afterwards.

[Peter Vs Bond]

They send an ad to someone, they make a sale.

[Andrew Lipsman]

You add up the numerator have not been caused by that.

[Peter Vs Bond]

Right.

[Andrew Lipsman]

So where we need to go is incrementality. Iroas, everyone's going to debate over what's.

[Peter Vs Bond]

The best methodology that requires tech, that requires data science, it requires test and control and truly measure.

[Parbinder Dharawal]

And there's different ways of doing incrementality as well. There's many different ways. Right. Like, and we've got to make sure.

[Peter Vs Bond]

That'S why the work of the IAB and CBS media change to try and define what is incrementality.

[Parbinder Dharawal]

Right. And we're like, we're driving incrementality. Right. And we're using randomized control testing in order to bring that to market, which is really the gold standard. But I think there's another piece here. There's a lot of modeling that happens as well across our business in retail media. And it gives retail media a rough ride. And I think we've got to be more transparent about where we're modeling and where we're not modeling. Because if you do not provide that level of transparency, it doesn't matter whether you're a brand or you're a shopper, marketer or anywhere in between, you're not going to trust the numbers. Right. And we've got to help people trust the numbers. And, and I believe that the IAB and the work that Jeffrey Bustos is doing, the work that Andrew is doing in the market, is incredibly important for, for all of that transparency.

[Andrew Lipsman]

Can I say just explicitly what I think you might be alluding to, which is that MMM is consistently understating the value of retail media.

[Parbinder Dharawal]

Yeah, correct.

[Andrew Lipsman]

It is 100%. If you look at some other methods, and there's a few different approaches that I like. One is causal modeling. And one of the things that's interesting about this method is that whenever you look across channels, RMNs always pop as by far the most incremental channels by far.

[Peter Vs Bond]

Okay.

[Andrew Lipsman]

Search and social are not nearly as strong.

[Peter Vs Bond]

Let me close this out. A couple things. One, on your tables, you're going to see two things I want to call out to you. One is a QR code that'll get you to CVS Media Exchange. Take your phones out, open up the camera, scan the QR code and learn more about what they're offering. Number two, there's an invitation to a happy hour this evening. It's on a little card there. Please take a look at it. CVS would love you to to join. And I also want to particularly thank the team at CVS Meet Exchange for hosting this breakfast and putting this forum together. We're greatly appreciative. Andrew, thank you for coming. You're going to put this survey research report on your LinkedIn page. Follow Andrew on LinkedIn. He produces really valuable insight and content. And last but certainly not least, parv. Thanks for bringing this all together and thank you for giving us.

[Parbinder Dharawal]

Thank you.

[Peter Vs Bond]

The CVS Media Exchange thank you. Perspective.

[Shree Raja Gopelin]

The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPG Guys LLC where the individual author, hosts or guests, nor is it intended to be a substitute for research on any subject matter. Reference to any specific product or entity does not constitute an endorsement or recommendation by CPGuys LLC. The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. The views expressed by CPTGuys LLC do not represent the views of their employers or the entity they represent. CPTGuys LLC expressly disclaims any and all liability or responsibility for any direct, indirect, incidental, special, consequential or other damages arising out of any individual's use of, reference to, or inability to use this podcast or the information we present in this podcast.