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- [00:01]
Peter V. S Bond
Hey, it's pvsp with the CPG guys. Sri and I are going to be in Las Vegas, Nevada January 6th through the 9th for the 2025 CES conference. Monday evening we'll be hosting an invite only party at the Aria. On Wednesday morning we'll be emceeing a breakfast briefing on 2025 Retail media investments that's sponsored by CVS Media Exchange. That's over at the Park MGM Tuesday appearing over at the OMG Commerce Experience at the Cosmopolitan. And we'll be seen mostly around the area space. Expect to see us going into a lot of the area sky suites for individual meetings. We'll even be recording some content there. If you see us, stop by, say hello, take a selfie, whatever you want. We love speaking with people. We look forward to seeing you in January. Happy holidays everyone.
- [01:04]
Jeffrey Aragon Bustos
Hola, Jeffrey Raymond Bustos here and you're listening to CPG Guys Podcast.
- [01:12]
Sri Rajagopalan
Welcome to the CPG Guys Podcast.
- [01:16]
Peter V. S Bond
Your host Shree Rajagopalan and Peter V. S Bond explore how brands and retailers engage consumers in an increasingly digital driven world. And now, here are the CPG Guys.
- [01:32]
Sri Rajagopalan
Hello and welcome to this episode of the CPG Guys. I'm of course sri, co founder, co host of CPG Guys. Also 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 of course my younger daughter Lara Raj as a member of the Geffen Records Universal Music Group Katsai. And of course for those of you watching, they got their hat on today. I was lucky enough to get one of those. And they've just announced and completed their tour of Jingle Ball in various parts of the United states. Super Hit Touch is now close to 200 million plays on Spotify. We're headed to Tokyo at the time of this recording for the Apple Music Awards. Can't wait. Joining me today is none other than BFF Mr. Peter V S Bond. And when he's not co hosting this podcast, he has had a client engagement at Flywheel, a division of Omnicom that helps enterprise brands improve their SEO and SEM growing the e commerce businesses. Peter, what's going on in holiday season?
- [02:36]
Well, Sheree, the travels have just been crazy. As you know, we were out in Chicago at P2PI Live. Then we hosted the DSN Total Store Awards and Issues Summit and then I had to make a little jaunt down to South America to present at the Walmart Chile Suppliers Conference, which thank you again to the entire team there for making me feel so welcome. I've got a little bit of a trip down to Baltimore tomorrow and then maybe we can slow down for a couple weeks until you and I head to Las Vegas for CES and the crazy travel schedule begins anew, right?
- [03:19]
Did you forget NRF and then fmi?
- [03:21]
Well, that's what I mean. We got nrf. I gotta go out to Seattle for a flywheel trip and then off to fmi. And then you and I are making a trip down to Cagney in February in Orlando, our favorite conference to go to.
- [03:40]
We just talk about our travel forever. So I'll move us forward.
- [03:43]
And oh no, let's not forget I'm also going to be speaking at the at the Syndico Partner Kickoff in January as well. So I slipped that in there. Little crazy, right?
- [03:53]
Yes sir. Before we get to our guest, we want to ask you to consider following us in your preferred podcast listening app if you haven't already done so. This will ensure you automatically receive new episodes as they are released. And while you're at it, follow our sister podcast the FMCG Guys and CPG Scoop announcing the first retail media executive education program in our industry from May 5 to 8, 2025 at Cornell Tech. The CPG Guys, our strategic thought leaders and partners for this immersive four day program with none other than renowned faculty of Cornell to share best practices for building compelling retail media programs. You'll discover how to collaborate on creating best in class tech stacks, measure performance to ensure brand access necessary KPIs based on campaign objectives and establish strong partnerships between brands and retailers. Of course we will be using AI driven campaign design at scale Links to our podcast, our sister cast social media profiles of my daughters Rhea and Lara Raj, musicians offer more information on the Cornell Retail media program. You can find it all in the digital liner notes of this episode. And now for our main event. Today's CPG landscape has completely transformed I would say one would want to say over 10 years. I'm going to narrow it down to the last 18 months where I think with a volume challenge in the industry, the consumer is leaning heavily on digital to compare price. An omnichannel shopper is today's reality. With the 24.7on and a war for attention taking place for brands both in store and online and also for retailers. Whole majority of the digital shopper habits how to build a path to purchase for this 24. 7 which the industry is not used to has emerged in the CPG industry. Which means along with this sort of technology advance, retail media has become the next world in our industry ripe for disruption and expansion far beyond what we fathom. All the large conferences I was at, whether possible at Miami, Shop Talk, Europe, Barcelona, Cannes Lions Festival, Grocery Shop, the talk of the town was retail media, including the rapid evolution to in store retail media. So what do we know? One of the challenges that has plagued us for four years now is the measurability of success. Every RMN talks to success metrics that it champions. What qualifies as a successful campaign to decompose? Right? Wrong. What's next with measuring success at retail media networks? Who do we have today as our guest? None other than second time. A second time appearance for Jeffrey Aragon Bustos, VP of Measurement Addressability data of the interactive advertising board that we lovingly in the industry call the IAP and look up to. His first episode on the CPG Guys can be found easily by going to Google and simply typing Jeff Busto's CPG Guys in your Google search bar. Jeff, I know you're out there in Colombia, Southern hemisphere. How you doing today man? I'm jealous, actually.
- [06:53]
Jeffrey Aragon Bustos
I'm great. First of all, thank you so much for having me twice at CPG Guys. Definitely an honor. I am in Colombia in the coffee region, drinking coffee and talking about retail media. This is my prize that I got at sotimak. They're like the Home Depot. So I had a chance to catch up with the team last week, Thursday and I went to their holiday party on Friday. So retail media is everywhere. As Peter was saying. He was with Walmart and Chile, as you were saying. It's definitely growing, not just in the US but it's also accelerating in different parts of the world.
- [07:27]
Sri Rajagopalan
Absolutely. Congratulations first of all on the award and we're going to get to that while we ask you question number one. And I'm of course incredibly excited to speak with you today about the space of retail media. But before we get to the detailed questions that Peter and I will be having a discussion with you on, we always ask every guest, even if they've been on the show, give us a brief overview of the IAB and your role. Maybe like the 62nd version here.
- [07:53]
Jeffrey Aragon Bustos
Yeah. So I started at the IAB about three years ago, had the awesome opportunity. I was hired out to lead retail media and cross channel measurement at the IAB and a lot of that was really brought and one of the projects I was given was retail media and it's definitely accelerated a lot. And as we've started within retail media, one of the main objectives obviously is ensuring that we have measurement standards which we have released. And it's also exciting to see that we have had measurement standards across different parts of the world as well.
- [08:31]
Sri Rajagopalan
Awesome. Thank you for that, Jeff. And in the digital liner notes of this episode, as always, we will place links to Jeff's LinkedIn profile, IAB's LinkedIn page and of course the website. That way those of you listening in can easily connect back with one click straight from your smartphone. Jeff, I'm going to repeat a question that I actually asked you on the previous episode. We have a whole new audience. Our audience has more than doubled since you were here last and we're adding listeners every single day. What they'd love to know is as we look through your career, you've been at Interpublic, wpp, Omnicom, and now the industry sees you as the king of measurement. They actually look to you, the industry looks to you as your standards, what you put out as the ones to follow in the industry. Take us through the years from Florida International University all the way to iab and then knowing what you do about retail media in this space, what's advice you dole out to those who are like, let me attach myself because Peter and Sri are saying this is one of the hardest spaces in the industry.
- [09:33]
Jeffrey Aragon Bustos
Sport 305 in Miami. And yeah, I moved to New York when I was 23. I started in paid search or started in the SERP. Now we're here, as we say, in the paid search space. And yeah, I think that within retail media there's really nothing new within retail media. I think sponsored products, display ads, ctv, social commerce. And what really sets retail media apart from each of those and kind of within my career as I've worked with different things, is really ensuring that we've really put the customer at the forefront. And I don't, I think the idea of saying that relevant advertising is the consumer value exchange is very lazy for us to say it's advertising because it's not. When I was at, you know, I was in Costa Rica a few months ago and Walmart, Costa Rica there, they did this really awesome activation with tridentcom in Call of Duty or it was Halo. And a lot of the in store retail media activation was around. You bought the Trident gum to get a coat, so you get gear and then you went outside after your purchase and you had an experience. And I think a lot of in store retail Media in Latin America and Europe has a post transaction experience, whereas in the US it's just very see this ad and buy it. And I think that's why we're seeing why in store is much more advanced in every other place but the U.S. like in Latin America, 30 to 60% of retail media investments is in store. Same thing within Europe. So I think kind of like to respond to your question, a lot of my careers I moved through it is really ensuring how can you align kind of with that consumer mindset and where they are and really provide value beyond just relevant advertising.
- [11:24]
Sri Rajagopalan
And then Jeff, take us through a couple of those hop skips and jumps you made in your own career here. To get to iab, did you have to acquire experience in advertising first before you could be the standards captain?
- [11:39]
Jeffrey Aragon Bustos
Yeah, I love reading. I'm a huge avid reader. I love learning. So my first job, I worked at a real estate company as a copywriter for 10 hours a week. And I was like, I kind of wanted to make more money. So I taught myself paid search. And then every time I wanted to make more money at the real estate company, I would just be like, hey, we should run social ads, we should run paid search, we should run email campaigns. And then, you know, I had the opportunity to move to New York and you know, work for an ad agency. And even within there, starting I would say at, when I was at Reprise now Canesso, I was, you know, early on as a senior analyst, as a manager, I was always working in new business. I worked on the Ameriprise TIA new business pitches and those really like really ensured that they adapted me to learn quickly. I would say anyone starting in retail media, I would say do a ton of new business because, you know, retail media is a big thing now. But I think what you really need to acquire is the ability to learn and break fast. Like, you know, new technologies are always emerging. Things are always emerging. And I think the biggest goal you can have is the ability to learn quickly and then the ability to just also be aware that you don't know anything. I think a lot of times when I go into a conversation, I always just ask a lot of questions and I just try to get the full picture. I think a lot of times within advertising we want to pretend we know everything and it's okay not to know everything because then if you ask enough questions, you can learn a lot. And from that I moved over from paid search into social. I had the opportunity to work on Dell, which was a huge E commerce account. And I think working within Dell really ensured that I had a lot of the knowledge just to make sure that to understand the consumer intent also worked a little bit on the Bose business. And I think within the Bose business it really helped me understand audience intent and then even moving to hearts and science. When I was in AT&T, one of our best performing audiences was buying Amazon O and O. If you bought a moving box, you were going to buy intranet. And I think a lot of times when we buy these third party audiences, the moment you're trying to target someone that's in market for intranet, you're already too late because that person's already done a lot of research. The only way somebody gets into an in market audience is once they've done research. Unless you're one of the two or three companies you're considering, you're too late. So a lot of things is like, how do you think about audience strategy from a discovery phase? And then I think the most pivotal role before IB was when I was at Mediacom. I went back to Mediacom to lead data strategy in the US and Mebberin Francisco, who's now the EVP of product strategy of choreography, she's, you know, if I were to tell you the one person that was, you know, is the reason for my success today, I would say it's Marilyn Francisco one she gave me the freedom and tools to do anything. So I, you know, tested data clean rooms across adh Live Ramp Haboo. We did various identity solutions, we tested, tested advanced television, we developed new audience frameworks, we developed linear regression models. It was, it was pretty much my playground to do anything I wanted and it was a great experience. And I think also what really helped me was she really, you know, she has an awesome kind of personality. She just kind of was fully herself. And you know, I think kind of going into the IB when I first joined, I tried to be like really serious and professional and then I kind of just was like, no, let me just be myself. And I sometimes feel like I'm very casual and I wear really bright colors all the time. But I think kind of like, you know, I would say like the person. If I could just point to one person in my career. I love this shirt, love the shirt. I would say, yeah, it's Mebberland Francisco. So if you want to work at the iv, go work under me. That's what I would tell anyone.
- [15:27]
Sri Rajagopalan
The podcast. I should make mention of the fact that three more visits and you get the highly coveted wool and leather varsity letterman's jacket with your name embroidered on it and the CPG logo, CPG guys logo on the front and back. So just keep that in mind. But thanks for joining us. And I'll just say you had me at regression analysis that as a loyalty geek from the days of Dunhumby, doing regression analysis was a core component of my business. So Jeffrey, big year in 2024. Hardly a week went by that I didn't see another retail media platform emerge. Amazon, I think had as many as five different unboxed events globally with more in store for next year. We saw summits from quite a number of retail media platforms with their suppliers and my God, the partnerships in the ad tech stack just abounded. At the same time, IAB released some highly, highly publicized retail media standards. So a lot going on. I guess my question to you is simply this, what's the state of retail media going into 2025?
- [16:45]
Jeffrey Aragon Bustos
2025 is going to be an inflection point. I think one to your first point, there's way too many retail media networks. So I think that a lot of as these new players emerge, brands are really looking to streamline a lot of their retail media spend. And I think it's not just the issue that there's a lot of retail media networks emerging. It's also because there's a lot of websites, there's a lot of apps, like we, you know, there's a lot of CKV platforms. I think the real issue is that it's not just a fragmentation that is a problem, but the fact that there's no standardization, not even within measurement at ad specs or audiences. So like when I was in Dell, it was like $60 million, $46 million of search ad spend and that team of eight people, you need eight people to run $6 million in retail media just because of the fragmentation like all these platforms. And it's just, it's incredibly nuanced. One of the first things is like this fragmentation is retailers need to think are they going to be programmatic ad tech players online or are they going to be like social platforms where everybody invests in meta and then like the second platform that's related to your brand. So I think retailers are going to kind of come into this scalability human resource because there's a human capital problem. It's really expensive from a human capital perspective to run retail media. And I think to your second point, we're seeing the emergence of a lot of these non endemic retail media networks such as United Airlines and Chase, which I'm really excited about because United Airlines and Chase have to prove performance to get ad dollars. And I think that competition is going to continue propelling retailers to improve their measurement capabilities. One of the exciting things is that in 2024 we saw Instacart. It was the first retail media network that got accredited for MRC standards. All this is public information in the Media Rating Council. Walmart has started the audit. Amazon has started the audit. There's three other retailers which I can't mention that have started the auditing process with the MRC. They're one of the top 10. So we are seeing a lot of retailers moving that direction. So I think it's going to be both a combination of slowing investments from brands as we see deflation, but then also retailers accelerating their measurement and tech stack.
- [19:06]
Sri Rajagopalan
A crowded field indeed, as you mentioned. But I do believe, Jeff, it's a survival of the finished little bit of the Darwinist theory on retail media. Not every retail media network has the ability to invest and grow either and has most importantly the audience. So the very next thing that comes to all of our minds is measurement. And a word that's been floating around the entire year this year, for lack of other words, is incrementality. I was, it started as I was last year, if I remember correctly. And net new to brands is I don't think brands really understand what they're asking for when they say, hey, I want to know my net new to brands, but yet they ask it because it's sexy. What's your advice to Brent on this new word, incrementality overall? Does it even mean anything?
- [20:00]
Jeffrey Aragon Bustos
It does and it doesn't. So I think that the reason that incrementality has become such an important metric within retail media, because again, it's not a new metric, is because it's the first time within an ecosystem where the ad is placed in the same place, an ecosystem in which the transaction or outcome happens. So there is a need to prove incrementality at the same time when, you know, I'm working with retailers and brand and having these conversations. If I tell you that like your IRO has increased 20%, like what does that mean? I mean, first of all, it only increases within that one platform and sometimes they're only telling you with it on site or with an off site or in store. But I think at the same time also you need to start focusing on leading indicators. So for example, let's say Coca Cola and Pepsi, if you're a retailer, you go to Coca Cola for the Coca Cola product And you tell them you have new to brand, they're going to laugh at you. 90% of the U.S. has had a Coke. It's not a Coca Cola cares about purchase frequency and basket size, whereas Pepsi does care about category, share and margin. So I think that when we start thinking about IRO AS or any sort of outcome metrics, we have to then look at our leading indicators and understand what are the metrics that you can actually optimize to that have high correlational value. For example, I don't know if you guys have had Olipop. I'm obsessed with Olipop. I buy way too much Olipop and for me I am new to the category for Olipop because I don't regular buy soda. That's very telling. If somebody was an avid soda drinker and then they moved to Alipop, they're a YouTube brand and I think brands should start looking at the measurement they have and say, how can I use measurement to improve my decisions? Because a lot of times a lot of these measurements reporting happens. They're just a report. Like I go, I presented my report to Peter, I'm like, this is what happened. And then we just forget about it. And no one's actually like thinking, hey, was there a conversation measure a new brand or hey, a purchase frequency decreased, what are we going to do? And I think that's probably the biggest opportunity brands are missing.
- [22:10]
Sri Rajagopalan
Jeff, I love your mentioning new to brand as a key metric for brand managers. Challenge is twofold in that, right? If you have a product that is not as fast moving a consumer good as cereal or milk, say a television, the biggest challenge is the look back period, right. And how much data you have. Amazon in the marketing cloud limits it to 12 months. So if you're buying a television, is 12 months a relevant period of time for you to evaluate? And if you're Walmart, right, you were to try and take Walmart Data Ventures and do a look back, high percentage of their transactions are cash. So it's challenging to get to that metric. The other one I'd say is even if you are fast moving consumer goods, are you really new to brand or are you new to brand in that retailer? So it's directional. I wouldn't say it's absolute, but it's the kind of thinking that I think brand managers need to move in that direction. Right. Incrementality means nothing when you're launching a new product. Your investment is purely about getting awareness and things like that. So I'll get off my soapbox and get to my question. Let's talk about joint business plans. Amazon has got. I forget what their acronym is, but basically their push this year is you want to get the benefit of doing JBPS with us, you're going to need to spend at least 20% of your ad spend against DSP as opposed to on site paid search. When we look beyond them to other retailers, are JPPs happening in omnichannel retailers with the merchants alone? Are they integrating with the retail media arms as a part of that? Like what's the status of Omnichannel JBPS as you look out into the industry?
- [24:15]
Jeffrey Aragon Bustos
I wish there was some consistency. So the first one would be that when we think about JVPs is that there's not consistency. You know, everyone's doing JVPs differently. I would say, you know, whether you're doing a joint JBP or not, I would say both. As a retailer, as a brand, it's incredibly important that you have you coordinate internally to understand what you're negotiating. That's probably the most important thing because a lot of times you have to understand where your product succeeds within a jvp, whether your product is best served in a retail media or merchant first capacity and seeing where you can negotiate. And I think one of the things that brands are starting to see and is starting to restructure or they're just improving internal collaboration is that they're not speaking internally. So I think kind of like that's the first thing to ensure that there's that internal collaboration. And then I would say the second thing is as you kind of think about jbps is ensuring that you're aligning to your business objectives. I think a lot of times when you look at what business objectives JVPs, there's definitely a miss there. I don't think that, you know, I'm not saying that you should do joint GBPs or not. I think that's kind of depending on like the brand's objectives or not. I think we may start seeing quarterly JVPs just because, you know, brands are kind of, you know, going to start demanding more flexibility, more ability to have it. And I think also when, when brands are looking at retailers, I really recommend them having a way to tier and evaluate retailers using some sort of correlational system so they can arbitrarily say, well, these are kind of like my priorities for a retailer, that they should have these capabilities. You scored this percentage. If you want increased investment, we can, you know, if you improve these capabilities, we can definitely consider that and that really ensures that brands are able to better negotiate comparatively. And I think that also helps because a lot of times within a brand teams are built around a retailer relationship. So that person with that retailer relationship may not know what other retailers capabilities have. And I think at the same time it's important. Retailers even have their own sort of tiered mapping so they understand where they stand against different ones and it helps them understand and really precisions or value capabilities for brands as well.
- [26:34]
Sri Rajagopalan
Let me remind the public that I'm speaking to Jeffrey Aragon Bustos Vice president at Interactive Advertising Bureau, lovingly known as IAB in the CPG and retail industry. So Jeff, let me jump over to the IAB question. How does IAB collaborate with other industry stakeholders to set standards and best practices for advertising? I know in everyday advertising minus retail media, you'll have had incredible success. I'm not saying you haven't had it in retail media, but you are the standard. IAB is the standard for measurement and standards in media. How's that going with respect to retail media and then how are those standards actually evolving?
- [27:18]
Jeffrey Aragon Bustos
Yeah, so we, we, we partner within, we partner within the US with the Media Rating Council, the MRC to develop these standards. At the same time, one of the awesome things of the ib, we're a global organization, we are in various countries, we're in Colombia, we're in the uk, we're France, we're in Australia. So one of the things that we've done first of all is we've collaborated with the MRC and we collaborated the MRC for the retail Media Measurement guidelines which we published, we finalized in January. And then we also had, you joined us at Cannes and we had these debates with European and US retailers. And following the conversation at Cannes, the US and IAB Europe came together to develop in source standards. And the reason we brought in Europe is because from an in store perspective Europe is very advanced. If we think about an online on site perspective or off site, the US is obviously more advanced. But it was a really exciting cross Atlantic collaboration in which we were kind of trading notes with different retailers and see what was working, what wasn't working. So that's really where we're ensuring that collaboration. If you look at IB Mexico, they, they collaborate a lot with sim. So you know, there's always, you know, specific other organization or we try to collaborate within, you know, different ones. Earlier this year in April we also released the Retail Media Buyer's Guide in Spanish, latam and we brought in seven. So we brought in Mexico, Colombia, Argentina, Chile, Brazil, Uruguay, Peru to. And we brought in all the retailers of region to develop this. So, you know, it's a lot of like cross collaboration globally within the IAB as well.
- [29:06]
Sri Rajagopalan
Jeffrey, having worked across the globe, having worked with numerous industry stakeholders, I'm really curious what kind of frameworks or tools you've been exposed to that you think are facilitating the harmonization in this space.
- [29:24]
Jeffrey Aragon Bustos
I think when we think about the harmonization within the space, I think one of the things is data collaboration. I think we're going to see a lot more data collaboration and identity resolution.
- [29:36]
Sri Rajagopalan
I hear clean rooms being a core component of that. Yes.
- [29:40]
Jeffrey Aragon Bustos
Yeah. So I think that's going to be one big one.
- [29:42]
Sri Rajagopalan
When I come into these clean rooms, do I need to bring a mop and liquid bleach or no. Some sort.
- [29:49]
Jeffrey Aragon Bustos
You need to bring some differential, some differential privacy sprays. So yes, but no, I mean, you know, we'll see a lot more collaboration within that. I think, you know, I'm working with a lot of.
- [30:01]
Sri Rajagopalan
Do you think the players understand that they don't need to own the data anymore, they just need to access the data? That frees up the capital investment. They need to get better results because they can do so in a privacy safe environment. They don't have to own data anymore to make decisions?
- [30:20]
Jeffrey Aragon Bustos
I think some of them do, I think some of them don't. I think a lot of the smaller, newer players from a brand and retailer perspective don't fully understand that. But I think with a lot of data cleanroom solutions, it's not just, it's the ability. Like for example, Liveramp is creating this capability so that you can go in and pull the same measurement report across different retailers and then you can easily compare retailer performance within that environment. And they're kind of like off the shelf solutions. Other data clean room providers are doing that. It's also ensuring that the Citrus and the Kridios and all the ad servers, sponsored product solutions are actually also aligning and a lot of them are working towards that because at the same time it's not just releasing standards and saying retailers should adopt them, ensuring that technology companies are moving and developing the solution so that those can be adopted. And I think the final thing is also ensuring that if your retailer does not have a lot of on site traffic, but you generate a lot of in store traffic or off site traffic, then you're probably going to focus on those parts of the standard. So like a lot. So that's why a lot of the standards were called guidelines, because you know you have to ensure there's some flexibility. And then also within that, like Best Buy and Kroger should not have the same measurement models or incremental models because to your point earlier, you buy a television every three years. You buy milk twice a week.
- [31:50]
Sri Rajagopalan
I think, Jeff, if I were to think back about frameworks and tools in this space, AI comes to mind for me in a significant way. When it comes to insights, retail media is only as successful as the large volumes of input data coming out from a measurement perspective. But I'm yet in many spaces in Insights, AI is at the forefront, but I barely hear it in retail media. Any reason why that's the case? And I'm curious to see if I'm wrong. Jeff, is AI impactful in the space? Is IAB following AI? Are you personally following it as a trend?
- [32:33]
Jeffrey Aragon Bustos
Yeah. So we actually hosted an AI working group a few weeks ago at Microsoft, and I'm working on releasing a generative AI playbook for advertising in a few weeks. I think there's a lot of hype within AI right now. I think when AI, I think the real value of AI is having it fully adapt to our lives. And when I think about use of AI, I think about Instacart recipe solution where you can just ask for a recipe and then it gives you the recipe. You can just add everything to the cart. That's generative AI. That's probably the best way of. That's the best use of AI that I've seen because it's not simple, but it's, you know, it's a really simple thing that people need. They need recipes, and not only recipes. The worst thing about recipes, you can never find ingredients. This does everything for you at once. And it uses generative AI and it's creating recipe content. A lot of retailers are looking to adopt that. And that's really looking at how can I make the shopping experience or any sort of experience for consumers seamless as possible. So I think that use of AI will become much more. We'll start seeing a lot more of that. And then when we think about AI, broader nuts from a generative perspective, a lot of retailers are starting to look at computational machine learning and we're going to start seeing a lot more advanced capabilities within measurement. I think we're going to see significant more advancements with measurement. I think we're going to start seeing the rise of tree regression models to be able to understand all the features within a campaign that have the highest correlational impact to roas or whatever outcome you're measuring. So I think we're going to see an acceleration of measurement capabilities and be able to react and and I think from a dynamic creative optimization we're going to see a lot quicker not just insights, but to be able to adapt to creatives much faster and generate new creatives based on insights. Obviously within specific brand safety guidelines, but I think retailers are definitely looking at specific generized solutions and I'm excited to see how they continue not just within gen AI, but just and general, including machine learning. At the same time, as Peter said earlier, not everything has to be AI. I love a good regression model. There's nothing wrong with a good regression model and sometimes that's just the best way to do things. So like let's also not complicate ourselves and call everything AI at the same time.
- [34:55]
Sri Rajagopalan
I want to use Henry Logic. Why do I have to use regression? I'm just, I just wanted to. I just wanted to sound cool. Jeff I remember back in 1997 having a conversation with Art Christiani from Circana, then known Iri about Henry Logic. I just remember that word for some reason.
- [35:16]
Wow. Henry Logic.
- [35:19]
Peter, I want to ask you a little bit about AI as well, right? Working for Flywheel Digital, y'all obviously are in the business of reporting against E Com Digital as well as retail media's big forte of yours. How are you guys using AI on retail media?
- [35:39]
Well, obviously. Well, first of all, I'll say there are two parts to Flywheel's business, right? There's the organic search component and there's the paid search component. It has a tremendous amount of impact on the organic search because building all the necessary content to populate PDPs across multiple products and multiple platforms. The more you can use that to iterate, the faster it can be done, the better it is for brands to win an organic search. In paid media, it's a little different. I would talk more about the applied AI and not so much the generative AI in terms of creating the head terms for search and being able to figure out what are the right search terms. Feed the algorithm will tell you, here are the top 20 terms for this product. And then a human eyeball can look at it and say, okay, this is good. This isn't necessarily good. And then feed that back into the algorithm and very quickly it can figure out what to do. Even when you think about the content on the page, right? One of the biggest challenges and one of the biggest obstacles to finalizing PDP content is no shock here. SRI the lawyers. Shakespeare was right. First thing, let's kill all the lawyers. But in all seriousness, the ability to go through legal guidelines can be onerous and can just slow down a process beyond belief. AI presents us with the ability to build that into the algorithm and start to tease it out so that the lawyers spend very little time actually having to manually review content. And in doing so, content content on PDP is going to be updated much, much quicker. And that means a brand can optimize.
- [37:40]
Peter V. S Bond
Its search a lot better.
- [37:41]
Sri Rajagopalan
Does that make sense?
- [37:42]
It does. So the Supreme Court should be using AI to make case decisions.
- [37:46]
I don't know about that, but you know, in theory it should allow interesting things that I use AI for. I don't know about you cherie, But I have ChatGPT on my desktop and I probably use it 20 times a day.
- [38:03]
So Jeff, let's just go back to that for one second before we get to our last question. Optimization of retail media, shouldn't it be an automatic for AI? And why is it not?
- [38:13]
Jeffrey Aragon Bustos
The issue with, with the optimization of retail media is that you're operating across different platforms, you're operating across different ecosystems, even within the same retailers universe. You know, so it's, it's, it's, you know, resolving data from Pinterest and Meta into your retailer and then bringing that and trying to understand incrementality is really difficult because you get aggregated data from a social platform and then you get, you actually get, you know, you can pull in CTV data in a clean room so you're not, you know, the data match you're not doing is not capable. But I think to your point, in AI we're definitely going to see a lot more use of machine learning to be able to do more probabilistic data. I think with the rise of privacy and everything, we're going to see a lot more advances within probabilistic data. I don't, you know, I don't know why the advertising industry is so obsessive with deterministic data. Like it's so limited. Like sure there's a lot of value for first party data, you can pull a lot of insights but like there's no reach, like you can't find new customers with deterministic first party data. There's people that bought, if you start building, you know, probabilistic models, lookalike models, high customer lifetime values, expanding that universe. And I think a lot of the intranets and a lot of the growth we'll start seeing next year's and a lot what machine learning will enable kind of what Peter was saying is being able to make faster decisions with imperfect data and then meet the, the, the models, being able to kind of learn quicker and identify gaps within the data, which I think we're going to see a lot more of. I think a lot of the advanced measurement we'll see will be machine learning. I think we're seeing a lot of it now. You know, I, you know, if I always recommend someone talk to like a data scientist at a Walmart or a Kroger, first of all they're really nice. And then you can just like get, you know, you can definitely have really great, awesome conversations to really deep dive in how these retailers are doing advanced measurement and capabilities. But yeah, I think, you know, with machine learning and advanced measurement, you can start with a true regression model or, you know, chain level analysis. You can start understanding not just saying like, this is the incremental value, these are the metrics. You can say like, well, these metrics had the highest correlational value to this outcome. And that's probably more telling because like, what are you gonna do with 20 metrics? It's not gonna tell you. But if I as a retailer can tell you these four metrics have the highest impact to your ROAS or your iroas, then you know what you can optimize. You know how you can improve your creative, you know how you can do all these other optimizations and then over time to what Peter said, that can be automated, you know, using a lot of these AI tools.
- [40:53]
Sri Rajagopalan
Flywheel founder Patrick Miller. If you heard Jeffrey say that determin data isn't all that it cracked up to be, please calm down, take an ambient. Everything's okay. We're doing just fine here. We're just shooting the shit. Don't pay it no mind. So let me close this out. Jeffrey. Talking about where retail media is going. What's got you most excited? Is it about the growth of in store? Is it streaming television, publishers making their content available to multiple platforms? Is it about connection to social commerce? Like, what should we be paying attention to going into the new year around retail media?
- [41:39]
Jeffrey Aragon Bustos
When I think about 2025, I think it's a global aspect of retail media and the fact that it's growing rapidly in different parts of the globe. We're seeing live shopping take off in Asia and a lot of these retailers do really awesome, innovative things within a retail media environment. We're seeing Walmart and Amazon really lean into the creator economy from an in store perspective. We're seeing Walmart, Mexico and Sodium Mac and Colombia and Tesco in the UK leading best practices and standards of what insore really should be. And then we're seeing retailers within the US innovating in terms of off site partnerships with CCTV and social commerce and really optimizing sponsored products placement and optimization. So I think it's this really exciting environment and we're seeing innovation happen differently in different parts of the world. It was in Turkey a few weeks ago with Migros and they're seeing 50% of their retail media investment is in store and then from an on site perspective 70% is display ads and 30% sponsored products. Within the US and ecosystem it's kind of the opposite. So I think it's really interesting to see that a lot of these retailers innovations are happening by consumers, how consumers are engaging with them. So I think we're going to start seeing innovation. I think next year a lot of retailers can do cross global collaboration and kind of start learning from each other. So I think that's kind of where I'm most excited to see how each retail media continues to evolve differently around the globe and just kind of learning from each of the different ecosystems and just regions.
- [43:16]
Sri Rajagopalan
Let me remind our audience you can find all of our content by simply going to a web browser and typing cpguys.com and if you think you or your company has thought leadership to contribute to our community discussion, drop us an email@contactpguys.com maybe you can join us on the podcast. Don't forget to drop us a reading@cpguys.com with the navigation bar at top. It tells us how we're doing, whether we're having the right speakers. LinkedIn we can't. Thank you for the 35,000 plus followers. Jeff, thank you for joining us on the CPG guys.
- [43:46]
Jeffrey Aragon Bustos
Thanks for having me. It's been an honor to be here twice and hope to be back next year. Happy 2024 everyone. Happy 2025. Happy New Year.
- [43:53]
Sri Rajagopalan
Peter, any quick one or two things you picked up here that you wanted to just quickly address?
- [43:58]
Yeah, I'll just say that, you know, Jeffrey kind of reiterated the fact that there's a massive amount of fragmentation and there's not a lot of consistency around measurement and there's still work to be done there that JBPs are not terribly consistent. Not surprising there. Incrementality is not the only measure you need to be thinking about new to brand. You need to be thinking about long term customer value and there's a lot of opportunity for growth. AI is going to be a critical component in our ability to scale out and make this a much bigger picture. And that IAB is working very diligently to collaborate globally and across different stakeholders to help build standards that are being adopted by some of the big players. And that's going to make it a lot easier for everybody to standardize around ad units, around measurement, and it's going to make it easier for everyone to invest and to achieve what Cara Pratt has said to us as emblazoned on the T shirts we created, which is retail media is media and we just need to get to the point where everybody understands that and can activate against it. That'd be my thought.
- [45:12]
Sree I actually think retail media is a movie or baseball game and we're the early innings, third inning.
- [45:17]
I like them. I like the baseball analogy.
- [45:20]
Which one do you prefer? Movie?
- [45:22]
You know, I'm always going to go with baseball.
- [45:24]
So we've always said this is a baseball podcast which also talks a little bit of retail media. So with that, that's a wrap of this episode. Peter Jeff, thanks for joining me. It was a pleasure as always. See you soon on another episode of the CPG Guys Foreign.
- [45:48]
Peter V. S Bond
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