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- [00:01]
Sri Rajagopalan
Hey, it's PVSP with the CPG guys. SRI and I hope you're having a wonderful and relaxing holiday season with friends and family. We're looking forward to getting together in Las Vegas January 6th through the 9th at the Consumer Electronics Show. Sri and I have got a lot going. On Monday evening the 6th, we're hosting an invite only party at the Aria. On Wednesday, we have a breakfast briefing around the future of CPG investment against retail media. It's being sponsored by CVS Media Exchange and it's over at the park mgm. And in between, we'll be attending lots of sessions and meetings primarily around the aria, which as you all know is the CPG C space, but lots going on. Expect to see us enforced there. The week after that, we're in New York City for the National Retail Federation big show. And of course the end of the month we'll be down in Marco island for the FMI Midwinter Executive Conference. Lot to happen with us in January. Look forward to meeting with you at those venues and a number of others. In the meantime, please have a happy holidays.
- [01:15]
Andrew Lipsman
Hi, I'm Andrew Lipsman, founder of Media Ads and Commerce and you're listening to the CPG Guys Podcast.
- [01:23]
Sri Rajagopalan
Welcome to the CPG Guys Podcast. Your host Shree Rajagopalan and Peter explore how brands and retailers engage consumers in an increasingly digitally driven world. And now, here are the CPG Guys.
- [01:43]
Peter Bond
Hello and welcome to this episode of the CPG Guys. I'm of course sri, co founder, co host of the CPG Guys, co founder and partner of Think Blue, your key to unlocking your profitability potential. As builders, connectors and amplifiers, we shape the future of commerce to drive your growth. Please do listen to my older daughter Rhea Raj's Music www.riaraj.com and that's Rhea R A J and my younger daughter Lara Raj. As a member of the Geffen Records UMG Katseye and they have just completed their tour of the Jingle Ball series in Dallas and Boston. December Touch, the hit single is now nearing 200 million plays on Spotify. We're of course headed to Tokyo for the Apple Music Awards. Not joining me today because he's at ahol at the giant food company is Peter B.S. bond and when he's not co hosting this podcast, he serves as head of client engagement at Flywheel, a division of Omnicom that helps enterprise brands improve their SEO and SEM growing their e commerce businesses. Before we get to the guests, we'll ask you to consider following us on your preferred podcast. Listening app. If you already don't do so. This will ensure you automatically receive new episodes as they're released. And while you're at it, follow our sister podcast the FMCG Guys and CPG Scoop Announcing the first Retail Media Exec Ed program in our industry from May 5 to 8, 2025 at Cornell Tech the CPGAS strategic partners with Cornell for this immersive four day program that brings together industry thought leaders and renowned faculty to share best practices for building compelling retail media platforms. You'll discover how to collaborate on creating best in class tech stacks, measure performance to ensure brands Access the necessary KPIs based on Campaign objectives and establish strong partnerships between brands retailers. In addition, the program covers optimizing brand strategies using AI driven campaign design at scale to achieve marketing goals. Links to our podcasts Our sister cast social media profiles of my daughters Ria and Laura. The musicians offer more information on the Cornell Retail Media program. Simply refer to the digital liner notes of the podcast. And now onto the main events. On this episode we have a repeat guest and one that I have over the years followed closely and waited for insights and analytics from many of his insights and analytics have made many a presentation pitched to the C suites of the various companies I've actually worked for, both from investments, justification and also for explaining I would eagerly wait for his white papers. And that continues to the day. Statistics, tables, graphs, insights. I'm referring to Emarketer, then at Insider Intelligence. And now we continue to follow and learn from his new company as they share more and more information and insights on the rapid changing nature of commerce in our industry. Who am I talking about? None other than Andrew Lipsman who now has his own company in the space called Media Ads and Commerce. Andrew, welcome back to the CPG Guys. Can't think of a better person to close 2024 with.
- [04:33]
Andrew Lipsman
Well, thank you so much Sri. Thanks for the warm introduction. It's great to be here again. If I'm not mistaken, I think this might be my fourth appearance, which means I'm inching ever closer to the smoking jacket, right? I'm ready for some swag.
- [04:46]
Peter Bond
One away. One away.
- [04:47]
Andrew Lipsman
All right, cool. Yeah, it's great to be here. I can't can't wait to finish off the year.
- [04:51]
Peter Bond
Strong point noted. He said it himself. One away from the smoking jacket, so hopefully we can have him back 2025, first half and indeed in and around the country at conferences. Andrew, hope we hope to see you with a letterman jacket that says the CPG Guys before we get started with our Q and A segment here. Can you give us a quick overview of your new company, Media Ads and Commerce and who it serves and what areas it serves?
- [05:17]
Andrew Lipsman
Yeah. So Media Ads and Commerce is the brand that I publish under on my substack mediaads and commerce substack.com, writing primarily about retail media, but veering off into other areas of digital media advertising and commerce. And I work with a variety of RMNs, ad tech vendors and other players in the space and certainly many B2B companies who are looking to find their way into retail media. So I'm working with clients like that. I'm also part of Coliseum Strategy, a group of four folks who I think are a sort of retail media dream team of sorts led by Keith Bryan, who's the former president of Best Buy Ads, where we undertake bigger projects and more in depth engagements.
- [06:04]
Peter Bond
Very clear. Thank you. Thank you for that overview. In the digital liner notes of this episode, we'll of course include links to your LinkedIn profile and your company's corporate website for our listeners to access while they're on the go and listen to this conversation. So let's get into it, Andrew. And obviously, you know, the reason I wanted to have you to close out the year is 2024 as it wraps up. RMNs continue to be on top of mind meteorical rise, last four years investments. But I still believe most of the industry on the merchandising side from retail doesn't understand it. What's a quick summary of RMNs in 2024 that you would kind of put out there for the public?
- [06:44]
Andrew Lipsman
Yeah, well the context for all of this, right. I think retailers had to pay attention to Amazon now for a few years, but maybe Amazon was an unfair comparison. What's happened this year is Walmart Connect has really started to fire on all cylinders, grow quickly, start to see the margin improve on their bottom line. And now retailers can't ignore the opportunity anymore. Right. They're all being asked about it from investors and you know, the C suite is asking questions to folks on their team. But these are also organizations that their core competency is being retailers and being merchants. And it's uncomfortable to begin to evolve into being a media company. I think that, you know, they've slapped up some sponsored product ads at most probably a lot fewer than they can and should. But now they just, they're at a point where they have to embrace becoming a media company. Keith, Keith actually has this saying that retailers are media companies in denial. And he predicted that 2025 is the year where they finally come out of denial. So I think that's kind of where we're at at this moment. But it doesn't mean there won't be plenty of resistance.
- [07:53]
Peter Bond
So retailers being media companies in general, you know, I'll present the counter argument on that one. I believe for a long time retailers are tech and media companies in disguise. And the whole reason I say that, Andrew, is because the consumer today is 100% digitally influenced. I don't say 95, 96 and just try to put bow ties and sugarcoat the obvious. When you and I depend on the phone and virtual mechanisms to get anything done and then research online and use online as a mechanism for practically moving forward anything in life, they're 100% digitally influenced. If you're 100% digitally influenced, your tech has to be a huge backbone of how you do that and you're automatically a tech company. Plus if you're a retailer, the volume of data that you're processing every day is significant. What you do with it is really tech anchored, tech backed things of that nature. And then media is a given high margin, no brainer. You have stores, people walk through those stores. You're driving impressions. You just don't call it impressions, you call it display. And it's been held in a holy grail forever in one part of the piano. Which is why, Andrew, I'm going to ask you that question again. In your experience, you get around the industry quite a bit, right? Do you? In your experience, when you get around the industry, this is just simple. Yes, no question. Do you see merchants at these conferences which are retail media oriented and you and I arguably go to many of.
- [09:23]
Andrew Lipsman
Those, not ones that I can think of.
- [09:25]
Peter Bond
And so primarily it's the media component of the retailer and brands, it's the RMN folks.
- [09:33]
Andrew Lipsman
Right. The best case scenario is that somebody within the RMN actually worked in something more retail specific within the organization already. But increasingly these are media and advertising folks.
- [09:44]
Peter Bond
And then another big one to wrap up 2024 capabilities in general. Do you think capabilities on retail media have improved? State status quo? I definitely know they haven't taken a step back. Have they become better or they say status quo?
- [09:58]
Andrew Lipsman
Closer to status quo than better. I would say 2024 in some sense was a lot of running in place for most RMNs. Amazon and Walmart are growing quickly, but the rest of the market flat, maybe very modest growth. And I think that it's been a big strategy year and kind of figuring out what they need to do, get conviction around the investments that need to be made and maybe finally starting to push forward with some of them. But I didn't see a lot of that innovation actually happen throughout much of 2024.
- [10:32]
Peter Bond
Yeah, that's what I was anticipating you were going to say. And I feel the same way. There was a status quo other than for the giant two behemoths you've already named. And to some extent I feel the pizza pie is growing overall. But Amazon and Walmart are starting to suck out largest pieces of that pizza pie or they have the largest pieces. So let's move on to the second one. You and I talked about a RMN survey quite a while ago, maybe three or four months ago. @ this point, you've executed it. You know, you did share that. You got a good amount of responses that came in, enough to, enough to put the survey out. And what was the motivation behind why a Q4 based survey? Why not Q2? Why not next year? Why not wait if it was, you know, run in place? And then what was the focus of the survey where you were you primarily interested in investments only? Was it above and beyond?
- [11:23]
Andrew Lipsman
Yeah, I mean I think what, what I see is happening right now we're kind of getting ready for this moment where retail media really becomes full funnel. And if it's going to realize that at full opportunity it means speaking directly to the cmo, it means tapping national media dollars and not just shifting around trade and shopper marketing. So I wanted to take the temperature and see where the whole market was at. I wanted to understand where retailers thought brands were and I wanted to see where brands thought they were in terms of thinking that way. So I wanted to understand where investment, the next dollar of investment was most likely to come from, how much the CMO was focusing on retail media and how much they're investing behind the opportunity.
- [12:07]
Peter Bond
And so obviously the questions you asked kind of a very investment related, which kind of also results in understanding how execution happens. Can we talk about execution for just a bit here? And let me ask you, do you feel the industry is in a state with execution where things are flawless right now? Like the brands and agencies who execute for the brands know exactly how to execute at a given retail media network or a retailer for the best outcome or is this all still in flux in development?
- [12:40]
Andrew Lipsman
I think it's come a long way. I think there's certainly better and much more familiar with the big platforms. But even with Amazon, there's a lot that they can be doing to get the most out of that opportunity. So I don't Think there's any RMN right now where I would say it's mature and there's no more value to squeeze out of it. I think that what's happening is it's kind of a cascade and they prioritize and learn. They go to Walmart, Connect and then Instacart and then work their way down the list. The hard part I think is being able to manage all of those and do it in a consistent way because all of them tend to be a little bit different.
- [13:15]
Peter Bond
Now I won't ask you to take names, but do you feel there's A tier A RMNs which have this perfected tier B, tier C or pretty much everyone is more or less in the same place? Because you did mention even on Amazon, agencies and brands haven't fully learned how to exploit it for the best benefit of the brand yet.
- [13:33]
Andrew Lipsman
Yeah, just in terms of the capabilities, I think Amazon is, is way out in front Walmart, Instacart I think are fairly very mature in many ways and have, have built really strong RMNs and then there's other strong, stronger players, but not to the same extent. So I do think there's probably three tiers there that I, that I just listed out with Amazon though. I mean here's the, the key thing. Everybody's been piling their money into sponsored products, right? Your, your basic E commerce search and that's going to be the highest volume and the most money generation. But they're measuring it with roas and we know that that doesn't tell the full picture. And a lot of those dollars can go straight into branded search which are not the most incremental ad in. In terms of performance. Meanwhile, sponsored brands. Sponsored, sponsored brand video. I mean, I think those are really the big opportunities for most brands. They're more expensive but they are also much more performant from an incrementality perspective. So when I say even Amazon's not being optimized, I think most brands probably don't have the right mix of even those basic formats.
- [14:40]
Peter Bond
And so Andrew, you use the word incrementality, right? That's a word that in the last six months in the industry I heard quite a bit new to brand was the exact word. Right. Do you want to shed some light on what that means? And even from an incrementality perspective, is it aero as in particular where the I fits in or is it way above and beyond that?
- [14:58]
Andrew Lipsman
Yeah, I mean incrementality is just the incremental sales. Sales that wouldn't have happened otherwise that you can attribute to ad exposure. And there's lots of different methodologies for measuring this. The shorthand for it is new to brand. New to brand is a far from perfect metric. I would say in the absence of being able to do more rigorous measurement, then it's probably fine as a shorthand. But even new to brand doesn't necessarily mean the customer is new to brand. It means they're new to brand on that platform. So I could be buying a brand my whole life at Walmart. The first time I'd buy it on Amazon. Now I'm new to brand there. But again, all else equal, it's good enough for most practitioners.
- [15:43]
Peter Bond
Here's to divisive ways of thinking that have shaped the industry the last year or so. You know, most large market cap scale brands have lost a lot of volume because of inflation. And that volume loss has happened because they've lost households and those households have left for private label cheaper alternatives. Or when there are price barrels for 10% more, they can get the brand that was once upon a time 40% more and now only has a 10% price gap. Is retail media a viable capability, a tool, call it what you may, to really focus on households and try to bring households that you've lost that used to consumer brands back. And then can retail media be a capability or an engine to retain households and build loyalty?
- [16:32]
Andrew Lipsman
Yes. And when I say retail media is going full funnel, right? The shift to upper funnel is all about getting your brand back in front of consumers when you can influence their purchase patterns using that really valuable first party purchase data. Right? So now I can see lapsed brand buyers. I can go target them on social, off site, through streaming TV now and try to pull them back into the brand. And then also, you know, if you believe in always on brand marketing from, you know, the how brands grow school, then you need to be talking to those existing consumers on a regular basis, you know, to drive ongoing purchase behavior and maybe increase frequency.
- [17:17]
Peter Bond
Let's talk about always on for a second, right? If you go back 15 years with the lack of digital programming, linear was the way to go. TV, billboards, print, etc. Where you could not be always on, it just wasn't feasible. A because publications weren't every single day, every single second. You get a magazine once a month, you get a newspaper once a day, et cetera, et cetera. And TV shows are radically different based on audiences, right? But we are in a world where now you can truly be on 24, 7. Do you recommend it as a good.
- [17:49]
Andrew Lipsman
Tactic for brands Overall, yes, for consumer brands, I think they need to be always on it. It's more a question of how you do it and how you allocate. Investment TV was always the, the, the biggest channel for that. It's expensive. It's also, you know, you can do the 30 second storytelling. So from a branding standpoint it can be the most effective. That inventory is more scarce. You get it. You have to do less of that. Some of that can shift into CTV and more targeted buys. But then you have a chance to reinforce the brand even if you can't do that 30 second spot, reinforce the brand through short form content, display and video across all these other channels. And then, you know, the, the other media channel that I'm really excited about in, in kind of completing the full funnel is in store retail media because I think it's a chance to bring that type of high quality, creative short form video to the consumer at the moment where you are, where you are most likely to be able to influence them.
- [18:47]
Peter Bond
So jump back to a little bit of question one on the merchandising side. Right. I think both you and I agree the knowledge of this hasn't spread. Retail media hasn't spread through the merchandising community as much as it needs to. But really the question with a twist on that one over here is how do we get to the stage where merchants and RMNs are treating RMN like true media driving traffic versus still so heavily focused on the middle and lower funnel aspects?
- [19:14]
Andrew Lipsman
Yeah, I mean right now merchants are inclined to think like retailers and they don't want to do anything that's disruptive to CX customer experience, whether that's online or in store. And so they're inclined to be risk averse. I think that they need to be incentivized and they need to start to attach themselves at the hip to the retail media teams. That's not going to happen though, unless the incentive structure is there. So I think that's one of the key things that needs to be solved for within organizations today.
- [19:47]
Peter Bond
Yeah, I think incentive is a big one. Unfortunately Andrew, what I observed and continue to observe is the incentive for growth on the retail media side sits squarely within the media team only. I've dealt with merchants, you know, a handful who have taken the interest to ask what are you investing there? And you need to continue to do that. Or when I introduced a new Adam, they'd say, hey, what's the retail media plan? They'd say digital plan around execution for this. But that was like the 5% theory, 95% never asked question, never engage with me on the digital side. And even when I would talk about the marketing part, the answer I'd get back is no, we're good. As long as you have it, we're good. We don't need to, we don't need to know any details. But hopefully, Andrew, the part that I scratch my head is a display on an end cap inside a store. Right? Let's take you and me, we walk it. Not that you and I are shopping in store every day, but let's say we do and we walk past, you know, the 20 yard aisles in the store, we walk past 10 of them. We were exposed to an end cap of some sort. Right. In some category. We didn't buy any product. It's still impressions. I for the life of me don't understand why that simple logic is not understood by merchants. It just doesn't add up. Because that would be upper funnel, wouldn't it?
- [21:04]
Andrew Lipsman
Yeah, I mean it's both. It's upper and lower funnel, but it's media. I think that's what you're saying. We kind of put it in this shopper marketing bucket. And that I think connotes retail more than media. But it is media. I don't think there's any way to look at it otherwise. Now one of the key things that I think merchants don't think about but is very much the case is good retail media drives traffic, it drives purchase behavior. It actually helps them achieve their goals. It's good for everybody, it's good for the retailer, it's good for brands, good for customers. So that, that's what retail media does when it's working. Right. And I'm just not sure why, why merchants don't quite see it that way yet.
- [21:47]
Peter Bond
So we're going to get to in store retail media at some point. I do see a bright future at some point, some point in the future for this space where the shelf is digitized. And a lot of this can actually happen because space is space is space online or in store. And not monetizing the space you have is kind of silly. So I've kind of talked about the merchants quite a bit. Let's turn our hats towards brands, in particular the CMO and the VPs, SVPs. I mean the title doesn't matter here. The brand stewards, right, marketers, have they embraced RMN fully in 2024 and have they understood that ottomans can actually be used for brand development?
- [22:27]
Andrew Lipsman
I don't think that they have bought into it doing brand Building brand development. I think it is. It's an allocation. They're investing against it. It's a key channel, but they kind of leave it up to the E commerce.
- [22:41]
Peter Bond
I heard that word allocation am already triggered already. Sorry.
- [22:44]
Andrew Lipsman
Yeah. But it's E commerce teams and they kind of do their own thing. I don't see it elevating to the CMO suite the way that it, that it probably should. And what I see is broader marketing organizations, especially at CPGs, they're kind of at this moment where they know they need to understand and get more educated about retail media, but they're also very uneasy about it and they, they kind of want to make sure that it stays sidelined. You see this tension and it reminds me so much of where CPG brands were 10 to 15 years ago with E commerce. Like they knew they.
- [23:19]
Peter Bond
I remember when I got into this world first, the digital world. If there was such a word back in 2012 with Frito, I would see this strange hesitation to want to talk about it. But Andrew, I have a hypothesis for you why I think it comes from lack of knowledge and the fear that it creates not knowing as much as the most junior person in the room. Because in the in store model the more senior you are knowledge base is significant and you use that in a variety of purposes to execute this world. The most junior person in the room has the highest knowledge and I think it actually hits upon the ego.
- [23:54]
Andrew Lipsman
Yeah, it's out of their comfort zone and it represents a threat to the way that things have always been done and where the dollars have always gone.
- [24:03]
Peter Bond
So when you talk to, when you talk to brands and arguably you're doing that every day for a living now and you're doing it at conferences, but you're also doing it independently. Are you primarily still working with E commerce teams or let's say digital omnichannel teams or are you getting in front of brands and having lots of conversations with them?
- [24:20]
Andrew Lipsman
It's mostly folks at the E commerce teams and they get it. Obviously they're in E commerce, they're smart, they're way ahead of the curve. Then some shopper teams and what I tend to get from shopper teams is just a broad acknowledgment that these different forms of retail media make a lot of sense and it's kind of weird that their organization isn't aligned enough around the opportunity so they know better. And then you get into the brand marketing teams and that's where I feel the real resistance.
- [24:51]
Peter Bond
Yeah, I just feel it's an excuse on behalf of the brand marketing teams. They're more interested in clawing dollars back that they want to invest in ways that they you know. For example, we talked a little while earlier on the show about they've lost households. The true tried and known tactic that they know to bring back households is spread it on TV and create large impressions. I'd argue, Andrew, let's take TV. Great program gets 10 million impressions. Very good ones. That's maybe playoff game in the NFL will get 10 million plus impressions. I'm not talking super bowl, but let's say a playoff game. The average TV program is considered great quality. That's network oriented, that's not sports. 3 million is considered amazing. How many views do does Amazon's homepage get every day? 100 million? 50 million? 40 million? Like 5x the numbers. It's not rocket science, but I truly believe it's coming from a lack of knowledge and the desire to learn. But let me remind our audience that I'm speaking to Andrew Lipsman, founder of Media Ads and Commerce. So as we continue this wonderful discussion on how the year is ending and I think both you and I are learning and concluding real time here that I still feel like I'm in 2012 in some of these instances. Yet the capabilities evolved and the spend is not double quadrupled but gone up a gazillion x versus 2012 RMNs and overall investments. Right? Very important question. I know survey is done. You're going to be releasing it first week of the year publicly and as you come to CES in a variety of forums, post that you'll be at nrf, I'm sure. But big picture question for you today. Have you learned from the survey? Is the mood today to be gung ho or has it moved to operationally driven metrics? Is the only way to invest in E commerce? And then how do you feel? Let me come back and ask you the how do you feel later. But what are you learning from the survey? Is it gung ho? People are ready to continue to invest or are they saying it's all about metrics? That's what I'm going to focus on in 2025.
- [26:59]
Andrew Lipsman
It is about metrics. Dollars follow measurement. So that's kind of the easy thesis around retail media in the first place. So it is moving that direction. There's more antipathy towards investing in retail media from a lot of brands. So I think that that's more sort of a vibes thing. But the dollars are going in that direction. And one of the Interesting dynamics that came out of this survey was that the more metrics driven the marketing org was, the further along they were in retail media investment. So those two things do go hand in hand.
- [27:35]
Peter Bond
But Andrew, let's, let's play that out just a tad, right? More metrics driven, the more forward they are our brands metrics driven in the first place or do they rely on agencies with age old metrics to come and tell them? Because everything in their world was attribution based and all of a sudden you live in a world where you can do full funnel reality based.
- [27:56]
Andrew Lipsman
Yeah, I mean I guess it's how they define themselves. They define themselves as being high metrics driven, organizations are low. And what I think is happening is it's more performance oriented. So the marketing orgs that really have shifted heavily into performance advertising, those are the ones who have more conviction around retail media. If you are very much a traditional marketing org heavily driven by TV and other traditional channels, chances are you're resisting retail media.
- [28:28]
Peter Bond
And so Andrew, the performance driven, you know, performance marketing is a word that's pervasive at this point. It's everywhere in your eyes. Andrew, what is performance marketing? Is it spending and investing based on results based outcomes only? No experimentation, no test and learn? Is it way above and beyond that, what is performance marketing? For the naive listener on the show.
- [28:52]
Andrew Lipsman
The simplest definition is driving results driving outcomes. In most cases it's sales. So anything that does that now how is it practiced? In most cases it's usually optimizing data to a metric that is available to you that may or may not actually correlate with the outcome you want. So you can have click throughs or all sorts of different metrics roas that you're optimizing towards doesn't mean you're actually driving those additional sales. So I would like to see performance marketers get much more conviction around that. Specifically optimize to IROAs know what you're really after?
- [29:33]
Peter Bond
It's that incrementality component you described earlier. That said, as RMNs continue to grow and there's more need in this space, even though arguably the need may not be moving at a pace that you and I would feel comfortable with. Clearly it's growing, but when it grows. You already talked about performance marketing and optimizing the spend. But ad inventory is something I worry about. I call it a challenge. Many commitments to RMNs by brands start with a dollar figure for the year, dollar figure for the quarter or quarters that may add up to the year. Then what happens when you Go through middle of Q3 is you realize there isn't ad inventory to buy. And so do you feel the world has evolved now to where RMNs that are seeking dollars have sufficient ad inventory to justify numbers like that right up front? Are we mature enough in this industry on the RMN side with inventory? This is a very inventory based question.
- [30:35]
Andrew Lipsman
Yeah, let me ask one question here because you're going to have better insight. Are you referring to in store inventory?
- [30:41]
Peter Bond
Oh no, just overall. Just inventory period. That could be even on Facebook for a minute.
- [30:47]
Andrew Lipsman
I don't see inventory constraints on the digital side. I think some of that is there are a few things going on. One, you know, some of the more mature platforms are maybe closer to that point, but there's still opportunity to make available more inventory on almost every rmn. So that's the first thing. They can open up more ad slots. They need to make sure that there's enough relevance. There's this dynamic where everybody thinks that the shift to offsite is just about getting access to more inventory because it's constrained on site. I think there's a lot of Runway left there, less so in cpg, much more competitive category than other ones. So I'll definitely concede that point. But I still think there's plenty of running room. But then you know, there's plenty of inventory on everything that's off site. And we're actually just at the beginning stages of starting to see retail media powered ctv. So I think that's a really exciting new opportunity where more and more inventory is actually coming online as we speak.
- [31:57]
Peter Bond
On the CTV front, who do you think is a leader in that space? Is it Roku devices? Are we talking Amazon here? Is it CTV in general? Because pretty much all forms of streaming television now has ads including the great Hulu's of the world and the Netflixes. I think there's a new plan being announced even on already exists on Prime Video with some selective test of ads.
- [32:19]
Andrew Lipsman
Yeah, well Amazon has the full stack. Right. They own and operate a lot of media. They opened up ad supported Prime Video last year. So that was really to me the big inflection point for, for why this is gonna start to take off. There's plenty of ctv. It's not necessarily underpinned by retail media ad targeting. Now Amazon is making a bigger and bigger play. Now we're moving into Walmart. Walmart acquired Vizio. They've also partnered with NBCU and Disney. So Walmart's getting access to a lot more inventory. That's just gonna take you know, we'll see that materialize probably over the course of 2025. But once you have that much inventory, a big chunk of the CTV market being powered by retail media, I think it's going to change everything. Think about traditional TV advertisers. All of a sudden you have performance metrics against it. That's going to change how they invest. I mean, measurement changes investment. We've never had that in TV because it's the least measurable media. And so in one sense, it's exciting to have performance metrics against it. On the other hand, I'm a little bit concerned that we'll overcorrect in that direction and start to lose sight of all the branding impact that TV is still so good at.
- [33:34]
Peter Bond
Totally see your point of the overcorrection, which leads me to a favorite topic of yours and mine, one that you've been a very strong advocate in the last few months, which is in store retail media. I don't think in store retail media is even understood in the U.S. whereas you leave the U.S. you go to South America, you go to Western Europe, you go to other countries, and all of a sudden you realize that everything we discussed about just display is in store media at this point. Why is the US market not willing to in store media is so small and irrelevant over here. At least that's my observation. But I'd like to hear it from the expert here, as you're an advocate. What's new? What's happening? Is it growing? Are the right people focused on it? Are the media houses themselves, the RMNs pushing for in store retail media? And then what kind of inventory can one get on in store media?
- [34:25]
Andrew Lipsman
There's organizational friction. I mean, that's what's held it back, the sentiment, you know, and merchants might be the most likely to resist that. My feeling is that there are certain places in the store, like an end cap, that might require more of a tussle between media teams and merchant teams. But there's plenty of inventory around the store periphery or at the entrance that I think is safe. And frankly, retailers should have started to introduce that already, and they're not. There's very few at this point who have really embraced in store media. We're speaking with CVS at CES together and they're talking a lot more. I like where their head is at with respect to in store media, and I think it will do really well there. Hy Vee has gone all in on in store media, but you haven't seen the biggest retailers yet go Full throttle. And I think that's what's going to really open up the market. When either Walmart starts to introduce displays at the right places, at scale, that's when the brands are going to have to reorient around the opportunity and align their media, their media agencies to invest against the opportunity. It's just not there yet. The mechanics aren't there, the measurement isn't there. So there's a lot of building to do at this point. Now when I take a step back and just ask myself, should this be a thing? To me it's the most obvious thing in the world. High quality advertising experiences close to the point of sale where 85 to 90% of sales happen, that should be the best or among the best ad units you could ever have. And somehow the industry on both sides is resisting it.
- [36:11]
Peter Bond
Yeah, it's just again, just bizarre. But I've used that word like 18 and a half dozen times at this point, right? Like to me, lobby display is one of the best forms of monetization a retailer can have. Right for the traffic and especially the impressions you can drive. As a PepsiCo employee, when I worked for them about a decade ago, I would take pride in building the best lobby displays. PepsiCo took a lot of pride, especially during key events, holidays during the year, Labor Day, Memorial Day. You'll find DSC suppliers are very good at this already and that may actually be a problem because the inventory might be blocked out based on the in store component being a display and the P and L sitting with a merchant. But either way Andrew, what I hear you say and what I conclude, it has to be taken head on. It has to be resolved because it's an amazing monetization opportunity. But more importantly it's also a better service to the consumer who will actually get to know perhaps new product introductions. They belong in labi displays. You know, obviously temperature state will matter, but it's a great opportunity to think about and continue to grow it. I do want to talk about TV screens. A lot of conversation articles, white papers, news about in store screens. Do you think that's a scalable model given the capital required and all the infrastructure including network bandwidth etc required around screens?
- [37:35]
Andrew Lipsman
So the biggest inhibitors for retailers moving into in store I always say is, is CX and Capex. Right. So they don't want to do anything to disrupt customer experience. I would argue on that point, good quality digital really elevates the store experience. Actually makes some stores that are kind of tired looking look more modern and it brings in new merchandising opportunities because you don't have to swap out cardboard displays. So I think the CX piece, I feel strongly about the capex. It's been an inhibitor. Let's be honest, screens are not that expensive these days. I mean those are commodity products. So it depends on the type of screen. There may be larger installations and also there are vendors who are taking on the Capex or OPEX in order to fund these screens in stores. So I just think there's plenty of lubricants to make this happen quickly. It's the organizational factors that are really standing in the way.
- [38:35]
Peter Bond
Funny you say that, because usually most of these friction points are always the organizational factors. Let's get to our last one favorite word of mine. I think it's largely misunderstood word because it brings people back to thinking about technology versus applied and the reality of solutions. And that is let's bring retail media and AI together as one word. If I said, hey Andrew, how is AI impacting retail media for the betterment of outcomes, what would you say? Or would you say hogwash?
- [39:07]
Andrew Lipsman
I wrote an article recently that said you can't spell retail media without AI.
- [39:12]
Peter Bond
That's what I got it from.
- [39:14]
Andrew Lipsman
But maybe you should. But maybe you should. And what I meant by that is, listen, AI is going to have an impact. I think we're already seeing lots of applications of machine learning that creates optimization that is valuable. So I see it as a useful tool there. Retail media is something that is fundamentally substantive from kind of a traditional marketing standpoint. It's bringing media experiences close to the point of sale or using that first party purchase data to drive higher quality upper funnel media engagements. Like let's, let's not lose our focus on those things. We haven't executed those as well as we can as an industry. We haven't received or delivered all the value on those dimensions. So focus on that. Don't jump ahead to AI. But I do think within the context of E commerce teams, I'm definitely seeing some smart folks applying AI in ways that create some efficiencies around creative development or can certainly help optimization, personalization, measurement.
- [40:21]
Peter Bond
Certainly excited to see what AI will do for the industry. I do also want to see us to stop celebrating the word itself, but really to focus on applied AI and the outcomes that come from applied AI and look forward to it. Any other trends in particular you're following other than in store retail media and the AI component?
- [40:40]
Andrew Lipsman
Well, I sort of, I'm writing an article right now that I'm ready to publish. That's declaring 2025 the year of full funnel and retail media. And so the the key pieces of that we've covered off on a few of them. The first one is the rise of the era of performance tv. Right? That's just going to start really in a big way in 2025. The next piece, and we haven't talked about this one, is retail media publisher partnerships. Best Buy and Cnet was the first big one. We have Instacart and New York Times cooking. Going to see more of them becoming dance partners. I think there's going to be a cascade of dominoes throughout the year of those types of deals. And then the last one was in store retail media. And in all cases what you see is retail media in these instances really working the top, middle and bottom of the funnel all at the same time.
- [41:30]
Peter Bond
Let me thank our audience and remind them that you can find all of our content by simply going to a web browser and typing cpguys.com as the URL. And if you think you or your company has some thought leadership to contribute to our community discussion, please drop us an email@contactpguys.com that's c o n t a c t contactpguys.com and maybe you can join us on the podcast like Andrew, don't forget to drop us a rating@cpguys.com on the navigation bar up top. What the rating does, it helps us understand how we're doing. Are we having the right conversations? The review actually gets too in depth on did we have the right speakers to our 35,000 plus followers on LinkedIn. I can't say thank you enough times without you there is no show the clicks likes DMs meeting us at conferences, recording with us at conferences, recording remotely in person. Thank you, thank you, thank you Andrew. Thank you for making time right before the holidays to join me on the show. And I can't think of a better guest to close out 2024 on one of the hottest topics in the industry, retail media. So thank you for joining.
- [42:29]
Andrew Lipsman
Thank you so much. Sree. Always great to be here and can't wait to see you early in the new year.
- [42:33]
Peter Bond
And he declared up front that number five will be on the horiz and hopefully when he writes his article he can come back decompose if people want to find the article Andrew, what's the best way for them to find it?
- [42:43]
Andrew Lipsman
Media, ads and commerce all spelled out.substack.com.
- [42:46]
Peter Bond
And of course you're going to find that in the digital liner notes of this episode, so it should be easy to find. That's a wrap. Happy holidays, everybody. See you soon on another episode of the CPG Guys.
- [43:04]
Andrew Lipsman
Foreign.
- [43:09]
Unknown
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