Podcast Summary: The CPG Guys – Retail Media 2024 Recap with Andrew Lipsman

Podcast Information:

• Title: The CPG Guys
• Host/Authors: Peter V.S. Bond & Sri Rajagopalan
• Episode: Retail Media 2024 Recap with Andrew Lipsman - Media, Ads + Commerce
• Release Date: December 25, 2024
• Description: Sri Rajagopalan, a CPG & FMCG eCommerce industry icon, and Peter V.S. Bond, a consumer loyalty guru, delve into how brands and retailers understand and engage with consumers both in-store and online. This episode features Andrew Lipsman, founder of Media Ads and Commerce, discussing the state of retail media in 2024.

Introduction and Guest Overview

Sri Rajagopalan opens the episode with a festive greeting and shares upcoming events, including their participation in the Consumer Electronics Show (CES) in Las Vegas and the National Retail Federation (NRF) Big Show in New York City. He emphasizes the hosts' active engagement in the industry and their anticipation for the upcoming year.

Peter Bond provides a detailed introduction of himself and Andrew Lipsman, highlighting Andrew’s extensive experience in retail media and digital advertising. He underscores Andrew’s contributions to the field through his insightful analytics and white papers, setting the stage for a deep dive into retail media trends.

Main Discussion Points

1. Understanding Retail Media Networks (RMNs) in 2024

Andrew Lipsman begins by defining his new venture, Media Ads and Commerce, which focuses on retail media, digital media advertising, and commerce. He collaborates with various RMNs, ad tech vendors, and B2B companies aiming to navigate the retail media landscape.

Notable Quote:

"Retailers are media companies in denial." – Andrew Lipsman [07:53]

Andrew elaborates on the transformative shift where traditional retailers like Walmart Connect have started to see significant growth and margin improvements, pressuring other retailers to embrace media company roles. He anticipates 2025 as the year retailers fully acknowledge and integrate their media capabilities, despite anticipated resistance.

Peter Bond counters by arguing that retailers have always been tech and media companies in disguise, given their reliance on digital platforms and extensive data processing. He stresses the intimate relationship between technology and media in modern retail.

2. Investment Trends and Capabilities in Retail Media

Peter and Andrew discuss a recent RMN survey Andrew conducted, aimed at assessing investment trends in retail media. Andrew reveals that while giants like Amazon and Walmart are rapidly expanding their RMNs, the broader market remains largely stagnant with only modest growth.

Notable Quote:

"2024 was a lot of running in place for most RMNs." – Andrew Lipsman [09:58]

He observes that aside from Amazon and Walmart, other RMNs have not shown significant innovation, leading to a market where only a few platforms dominate while others lag behind in capabilities and growth.

3. Execution and Tiering of RMNs

The conversation shifts to the execution capabilities within RMNs. Andrew categorizes RMNs into tiers, with Amazon at the forefront, followed by Walmart and Instacart, which are considered more mature in their offerings. He critiques the prevalent focus on sponsored products and ROAS (Return on Ad Spend) metrics, arguing that they do not fully capture the incremental sales potential of more sophisticated ad formats like sponsored brands and video ads.

Notable Quote:

"Most brands probably don't have the right mix of even those basic formats." – Andrew Lipsman [14:40]

Peter Bond probes into whether RMNs are mature enough to handle growing ad inventory demands, to which Andrew responds that digital platforms still have ample room to expand their inventory, particularly with the emergence of retail media-powered Connected TV (CTV).

4. Incrementality and Performance Marketing

Peter introduces the concept of "incrementality," a relatively new term in the industry, referring to the additional sales generated directly from ad exposure. Andrew explains that while "new to brand" metrics are imperfect, they serve as a useful shorthand in the absence of more rigorous measurement methodologies.

Notable Quote:

"Incrementality is just the incremental sales that wouldn't have happened otherwise." – Andrew Lipsman [14:58]

They explore whether retail media can effectively drive both acquisition and retention of households, especially in a climate where brands have lost market share to private labels due to inflation and competitive pricing strategies.

5. Challenges in Adoption by Merchants and Brands

A significant portion of the discussion centers on the reluctance of merchants and brand marketing teams to fully embrace RMNs. Andrew identifies organizational friction and resistance to disrupt traditional customer experience as key barriers. He asserts that without proper incentives and alignment between media and merchant teams, retail media cannot reach its full potential.

Notable Quote:

"Retail media is something that is fundamentally substantive from a traditional marketing standpoint." – Andrew Lipsman [21:03]

Peter Bond emphasizes that many merchants fail to recognize the media potential of in-store displays, viewing them solely as shopper marketing tools rather than media assets that drive upper and lower funnel outcomes.

6. In-Store Retail Media and Digital Integration

Conversations delve into the underutilization of in-store retail media in the U.S. compared to other regions. Andrew points out that organizational resistance, particularly from merchants, hinders the adoption of digital displays and in-store media networks. He envisions a future where digital screens enhance the in-store customer experience and provide dynamic advertising opportunities.

Notable Quote:

"There are plenty of inventory around the store periphery or at the entrance that I think is safe." – Andrew Lipsman [34:24]

Peter Bond shares personal anecdotes about successful in-store media strategies, advocating for their potential to significantly boost brand visibility and consumer engagement at the point of sale.

7. The Role of AI in Retail Media

AI's integration into retail media is discussed as a pivotal factor for enhancing optimization, personalization, and measurement. Andrew warns against overemphasizing AI at the expense of fundamental retail media strategies but acknowledges its role in streamlining processes and improving campaign effectiveness.

Notable Quote:

"I wrote an article recently that said you can't spell retail media without AI." – Andrew Lipsman [39:06]

He advocates for focused application of AI to support core marketing objectives rather than using it as a buzzword, ensuring that AI-driven innovations complement existing retail media frameworks.

8. Future Trends: 2025 and Beyond

Looking ahead, Andrew predicts several key trends that will define retail media in 2025:

1. Full-Funnel Retail Media: Integration of retail media across all stages of the marketing funnel, from awareness to conversion.

2. Retail Media Publisher Partnerships: Strategic alliances between retailers and publishers (e.g., Best Buy with CNET, Instacart with The New York Times Cooking).

3. Expansion of In-Store Retail Media: Widespread adoption of digital displays and in-store media networks, transforming traditional merchandising into dynamic media opportunities.

Notable Quote:

"2025 is the year of full funnel and retail media." – Andrew Lipsman [40:40]

Conclusion

The episode wraps up with Peter Bond expressing gratitude to Andrew Lipsman for his valuable insights and contributions. He encourages listeners to engage with their content, participate in discussions, and provide feedback to enhance future episodes. Both hosts reiterate the importance of embracing retail media's evolving landscape to drive growth and consumer engagement.

Notable Quote:

"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." – Peter Bond [42:28]

Key Takeaways

• Retail Media Networks are Evolving: Only major players like Amazon and Walmart are significantly advancing, while others remain stagnant.

• Strategic Investment and Metrics are Crucial: Effective retail media investment requires a metrics-driven approach, focusing on incrementality rather than just ROAS.

• In-Store Retail Media Holds Untapped Potential: Digital displays and innovative in-store media can revolutionize consumer engagement but face organizational resistance.

• AI Integration Must be Strategic: Artificial Intelligence should support core marketing objectives, enhancing optimization and personalization without overshadowing fundamental strategies.

• 2025 Forecasts: The year is poised for retail media to become full-funnel, with strategic publisher partnerships and expanded in-store media driving industry growth.

Notable Quotes at a Glance:

• Andrew Lipsman [07:53]: "Retailers are media companies in denial."
• Andrew Lipsman [09:58]: "2024 was a lot of running in place for most RMNs."
• Andrew Lipsman [14:40]: "Most brands probably don't have the right mix of even those basic formats."
• Andrew Lipsman [14:58]: "Incrementality is just the incremental sales that wouldn't have happened otherwise."
• Andrew Lipsman [19:13]: "Retail media is media. I don't think there's any way to look at it otherwise."
• Peter Bond [21:46]: "It's an amazing monetization opportunity."
• Andrew Lipsman [39:06]: "I wrote an article recently that said you can't spell retail media without AI."
• Andrew Lipsman [40:40]: "2025 is the year of full funnel and retail media."
• Peter Bond [42:28]: "I can't think of a better guest to close out 2024 on one of the hottest topics in the industry, retail media."

This comprehensive summary encapsulates the nuanced discussions between Peter Bond, Sri Rajagopalan, and Andrew Lipsman, offering listeners a clear understanding of the current state and future trajectory of retail media in the consumer packaged goods (CPG) sector.