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The CPG Guys
Retail Media Networks Investment Negotiations with Tree Line Strategy Group’s Joe Davis
00:41:37
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- [00:00]
Peter V. S Bond
Chain Drug Review's focus is on reaching the key decision makers across all retail channels, delivering comprehensive coverage of the latest shopping trends and in depth category analysis on health, beauty, over the counter products and wellness. Whether it's the latest trends, emerging technologies, or strategies for adapting to new consumer behaviors, Mass Market retailers deliver the critical information retailers need to navigate this dynamic environment. To subscribe to the newsletters of CDR and mmr, simply follow the hyperlinks in the digital liner notes of this episode. Chain Drug Review and Mass Market Retailers are published by Retail Media iq.
- [00:40]
Joe Davis
Hi, I'm Joe Davis with Treeline Strategy Group. You're listening to the CPG Guys Podcast.
- [00:48]
Peter V. S Bond
Welcome to the CPG Guys Podcast.
- [00:52]
Sree Rajagopalan
Your hosts, Sree Rajagopalan and Peter V. S Bond explore how brands and retailers engage consumers in an increasingly digitally driven world. And now, here are the CPG Guys. Hello and welcome to the CPG Guys Podcast. I'm your humble co host, pbsb. I also moonlight as the head of industry and client engagement at Flywheel, the commerce acceleration division of Omnicom. My co founder, Sri, he's the patriarch of the Raj family media empire and chief revenue officer at at Think Blue Consulting. He's probably got about 20 other gigs. He owns a bunch of rental houses in Dallas. He manages the finances for his daughter's business. He's an entrepreneur. We'll just say he's an entrepreneur. He can't join us today, but Sri and I are going to be at Wrigley Field next Wednesday. We're catching the Dodgers playing the Cubs and our dear friend Pat Burke from Line Leap will be joining us. We got seats right behind home plate, so if you're watching the game on Wednesday, take a little look. You see some rather boisterous, loud guys. That's probably us. We'll wave to you. But we're looking forward to catching a ball game. And then actually at the end of May, I'm going out to LA to join sri. We're going to see the Yankees in town as they as they get soundly defeated by the Dodgers. That's what we're thinking about before we get to our guest today. Just a very simple request from our audience today. I know we ask this every, every week, but if you haven't done it yet, because I know how many listeners we have and I know how many ratings we have and that there's a disconnect there. So here's all I'd ask you to do if you're on Apple or podcast. When I finish my little spiel here Just hit pause, go into the the the page for, for the CPG guys podcast in your app, scroll down to where they give, where they allow you to give a star rating and give us a star rating. Right? And you know, positive ratings really helps feed the algorithm that makes us more findable by people like you who want to be educated and entertained about the CPT retail industry. So real simple, just give us a rating and while you're there, write a review because we want to hear from you. What do you want us to talk about? What do you not want us to talk about? Because we want this podcast to be very audience driven. But it would mean the world to us if you could just give us a star rating and any number you like. My favorite number is five. You know, I hope it's yours too. And if you're so inclined, click that fifth star. That would mean a lot to us. So anyhow, all right, with that, let's get to our topic today. No surprise, we're going to talk about retail media again. Imagine on this podcast, right? Retail media is clearly increasing in its importance for budgetary considerations for brand advertisers. At the latest count, there are probably more than 100 retail media networks in the U.S. it's a little crazy when I start to hear about yet another retail media network has been launched. And the thing is, they're all asking, particularly from the endemic, those brand advertisers that sell through those omnichannel storefronts. You'll hear this term endemic versus non endemic. Non endemic is like a cruise ship selling on Amazon. They don't sell through Amazon, but they do advertise through Amazon. Right, but this is retail media. But there's a lot of ask coming to endemic brand manufacturers selling through these retail media platforms that hey, let's invest in, in, in, in what I have to offer, right? Most of the retail media investment is not being managed by a centralized business unit. There's not like some. While there are retail media groups at headquarters, generally speaking, when you hear that they're really only focused on a couple of big manufacturers, I mean, a couple of big retailers, the vast majority of activations that are happening in retail media occur at the customer team or shopper marketing team level. Right? That means it's highly decentralized. So developing skills to negotiate investment in retail media networks is clearly increasing importance. And this need to reside in decentralized entities. That skill set is something that brands should really be paying attention to. So the question is, how can brands educate their organizations to effectively negotiate in A world where the balance of power between retailers and brand advertisers is shifting. Right. 1950, when we started to see massive consolidation of retailers. Right. The deck was all stacked in favor of the retailer. That has fundamentally changed in an age where brand advertisers are writing checks for retail media. Right here to help us make sense of this is a very familiar voice to this audience. He joined us a few years ago when he was leading E Commerce in North America at a small little startup based out of Atlanta called the Coca Cola Company. We're hoping they're going to be able to make something big of themselves. He's ventured out on his own as a strategic consultant to CPG manufacturers, working hand in hand with them, leveraging his deep real world expertise and focusing not on process but more on outcomes. And I think that's really what is going to determine success. He's a CPT industry veteran. He's an active advisor to retailers, manufacturers and solution providers. He formed Treeline Strategy Group after 15 plus years at Coca Cola, Nielsen IQ and the Acosta Group where he now advises companies on business strategy, customer development, category management, digital commerce and insights based sales strategy. Please join me in welcoming back to the podcast. This is his second appearance. It's my dear friend Joe Davis. Joe, hey, how you doing?
- [07:02]
Joe Davis
Peter? Great. About four years onward, a little more gray, a few more wrinkles. We're still talking retail media but wanted to come back on because we need to hear more about the brand side in this retail media network saga and wanted to share some of the conversations that are happening on the zoom calls and conference rooms of manufacturers across the industry. And you know, last time I was here we talked a lot about what we were doing at Coca Cola. The discipline, you know, that was at the core of our success in the space, especially with retail media networks. And then since then, not shockingly, I found almost everybody is struggling with this on the manufacturer side and even on the agency side as well, I might mention. And you know, I've been coaching teams through negotiations or at least how to be a better partner in those negotiations and some common themes came out I'd like to share with you guys today and looking forward to the conversation.
- [07:55]
Sree Rajagopalan
Well, that's great Joe, and I'm really looking forward to speaking with you about this to our audience. I'm going to let you know if you look over in the digital liner notes to the podcast episode while you're going there to give us one of those five star ratings I so generously asked you to do. You're going to find a link to Joe's LinkedIn profile and his corporate website so you can learn more about what he's doing now as we're carrying on this conversation, how to reach out to him if you're so inclined to do so. So, Joe, with kind of my, my, my precursor to the conversation about what's going on. With that, with that in mind, retail media really continues to grow in importance for both the retailers who are, you know, transparently seeking to develop profitable revenue streams. When you've been a grocery retailer operating on a net 2% margin for 75 years and suddenly you, you're, you're. There's this shiny new carrot, it's called retail media. And the grosses are reported to be, you know, 75%. You're like, yes, sign me up for that. Right. Between that and for brand advertisers who are now looking to park their advertising dollars full funnel in mechanisms beyond where they had traditionally been placed, which is linear television, print media, which are waning in terms of their, their interest and reach. Right. What's your take on the level of challenge that this new world order is presenting to CPG brands that are really trying to navigate all of the retail media networks that are available to them?
- [09:32]
Joe Davis
Yeah, I mean, it's an immense and multifaceted challenge. Right. I mean, on top of it still being somewhat unfamiliar to a good number of sales or customer teams, you know, it's fraught with widely varying network capabilities. It's different budget centers being involved in the process than any of these teams are used to dealing with the profitability pressures of the manufacturers even, I would say, even more recently, so have added to the challenges of making sure that every dollar that's being spent is going to the right places and spaces. But, you know, perhaps the biggest challenge, Peter, is that you have suppliers and retailers now switching roles. And you mentioned this a little bit earlier, at least in theory, with brands being the buyers and now the retailers being the sellers. But neither of them are acting like it oftentimes still. And I think that's the root of a lot of the challenges that organizations are experiencing, is that they need to define the negotiation table more intentionally and think about their roles that they now play as it pertains to this space.
- [10:47]
Sree Rajagopalan
You know, I think back to my time when I was at CVS Health Joe, and I was arguably in what could be referred to as Retail Media 1.0 or maybe 0.5, and I was selling those lovely register receipt coupons, and I remember going to my boss and saying, listen, I'm going to go out to, I'm going to go out to Cincinnati and meet with Procter and Gamble to pitch our solutions to them. And she looked at me and said, no, we don't go to them. They come to us. And I don't blame her, right? She was raised as a very traditional category P and Luddite. What I learned very quickly when I was there is that if I, if I said, I want you to come to me, the people that would come into the room, there'd be about five people. Four of them would be the same four people from the sales office down the street. And one of them, maybe one of them came from hq. And I always felt that since I'm the one selling now, right, and it's their budget dollars, I needed to have a very different attitude. Right? So to your point, the balance of power is shifting and everyone needs to understand in this ecosystem what's the best way to make things happen, how to collaborate, how to facilitate. And the old attitude of the world revolves around wherever that particular retailer's HQ is, and that's where everything happens is probably a little bit of old world thinking, wouldn't you say?
- [12:32]
Joe Davis
Yeah, totally. I think everybody will be more successful in the endeavor if they play the roles that they now find themselves in. If a retailer on the ad sales side is acting like the merchant team and is, you know, bullying the brands, you know, you're going to have less success rate, poorer outcomes. Similarly, if you're a brand organization, find yourselves on an account team as an example, and you go into a media buy, you know, bowing and scraping and saying, sure, what's the check number? What's the number on the check you need me to write? This is not going to go well for you, right? So I think in general, just everybody's got a reset and it's uncomfortable in some cases because you may be talking to literally the same person on the other side of the desk that in, you know, minutes before you were enrolled, reversal on, right. This is just the fluidity of the space that everybody needs to get comfortable with.
- [13:26]
Sree Rajagopalan
So, Joe, I looked at some recent stats that said for every dollar that's spent on retail Media in the U.S. 77 cents goes to Amazon, 7 cents goes to Walmart, and the other 16 cents basically go to the other hundred RMNs. So here's my question to you. Should brands just forget about the tail end and just focus on the big marketplaces like Amazon and Walmart? And if you're like a pet care manufacturer, it's probably chewy. And if you're a grocery manufacturer, it's instacart. Or do they really, do they really need to develop negotiation strategies for, for all the places where their products are appearing for sale? And if so, why?
- [14:06]
Joe Davis
I mean, I think certainly focus has to go where the majority of the budgets go. And ultimately, as an advertiser, you know, you want to go where not only the best capabilities are, but, you know, also where you can achieve the right scale and reach and negotiate intensely in those places, given, you know, you're leveraging your investments in larger pools. Right. But from what I've seen, a lot of the brands are getting into trouble with that long tail that you mentioned, that $0.16 of the dollar, if that, you know, if you want to go that direction, Right. Where, where some of the discipline may be lacking or the expertise is lacking, and you have teams setting investment precedents or making decisions that you would not see made on, on the larger or bigger networks. Right. And so those decisions and those investments can balloon over time and start to erode or negate all the good decisions that you were making on some of the bigger networks. And so when I say that discipline is a core enabler of success in this space, I do mean organizational discipline. All account teams, all the players that are interacting and engaging in this space, because you will, over time, just the realities of the dynamic right now in retail media, that long tail is, is still going to pull substantive dollars out of your account teams. It may not be intentional and you may not be aware of it if you're a headquarters person or your media team, but it's going to happen as those pressures from the retailers start to bear down on those teams if they're not prepared. Again, like I said, it will just erode all of the good things that you're doing in some of those bigger accounts.
- [15:45]
Sree Rajagopalan
Yeah, I think the thought of a customer team burying its head in the sand and saying, okay, I'm just not going to deal with this retail media aspect is unrealist. You have, you have relationships with them. You need to figure out how this is going to work. So to, to that point, my next questions, My next question is really around the situations that, that necessitate different types of negotiation strategies. Right. How should brands, what are some of the more common situations that brands find themselves in when it comes to investment in retail media? And what types of responses do they necessitate as you've seen this transpire across the clients you work with?
- [16:37]
Joe Davis
Yeah, I mean, over the years, I hope the audience will relate to some of these. But you've probably seen almost every kind of potential stance from the retail media network, right? Initially, let's say back, you know, six years ago, five years ago, would come and say, hey, we'd love for you to test and learn with us, right? You know, we've got this thing, we want you to start playing around in it. We'd like it to be bigger, come into the sandbox, right? That's a, you know, if you think about from a negotiation perspective, that's a very like, friendly, collaborative kind of a situation you're going to be in. On the other side of that, you've had negotiation stances from the retail media network range from everything like, hey, your competitors are spending way, much, way more on this than you are. You're depositioned. We don't want to see you get hurt, you know, which is like one of those sly, you know, you better start spending or else. And some are just that blatant. You know, you need to spend X percent of your sales, this number insert here or else. And the damages start to, you know, be redirected towards your shelf space or, you know, we're going to deprioritize you for the promotional calendar, so on, so forth. You know, there's also just everything in between those two extremes in terms of the types of situations that I've seen teams find themselves in. And, you know, this all happens within one brand organization, the whole gamut. Some teams will be better off than others in terms of what they're dealing with. So, you know, if you think about that, no different than any other negotiation that you find yourself in as a business, you need to understand what's the overarching tone that I'm getting from the other side of the table. And that's going to drive how we respond, what we ask for, who we involve from our organization. And I think that that's a really key piece that sometimes gets looked past, is that, you know, process, especially process from the center, if you will, or from, you know, a headquarter team will often be kind of just one size fits all. You do these 16 steps and everything will be great. When in reality, you're going to really need to assess whether or not each of those 16 steps is actually going to address the negotiation tone that you're dealing with, you know, from the retail media network on the other side of the table.
- [18:59]
Sree Rajagopalan
So, Joe, brands clearly need to be prepared for these negotiations on retail media before they agree to do anything around investing in retail media planning or what are the essential questions that brands really need to ask their retailers so that they know exactly what they should be doing?
- [19:23]
Joe Davis
You know, this kind of builds on what we just talked about around the negotiation stance that is being taken. You then follow and say, okay, in a negotiation, you're always going to prepare yourself for, you know, what are the things that I have to know before I commit to anything in this negotiation? Right. And so for retail media negotiations, I, I would encourage everybody to say, first of all, ask the retail media network, is there going to be a media agency, a third party of any kind, involved in this that will make a huge difference in how you negotiate the level of expertise that you're going to find on the other side of the table? Also, who you should bring, you know, to the, to the negotiation. The second question I would ask is, you know, have you attempted to be objectively assessed and benchmarked for your capabilities versus other capabilities that we invest in? If that hasn't been done, can we do that? And so, you know, I know the industry has been pushing for standardization and whatnot, but this needs to be a recurring thing that happens as you seek to make investments with retail media networks. Benchmark their performance, benchmark their capabilities. The third thing I would say is, you know, is that retail media network committing to share sales data if they don't already, and if you don't already buy it, you know, you're going to need to measure the impact of this. It's not given that they're going to give you the data to do that. Right. And so I think that's something that needs to be a core element of the negotiation as well. The fourth thing I would say is, are you going to get credit with the merchants, you know, for this investment? You know, a lot of the times, the first person who's taking this request from the retail media network is the sales team, the account team, and the brand side. They're going to want to make sure that any investment ties into the broader, you know, total customer investment that's being made with that retailer. And then the last thing is, is who, who are we going to be working with? You know, they should be able to outline the support that they're giving you, the retailer and the brand, you know, in this investment. And, and also talk about, is the quality of that support going to set you up for success? You know, I've, I've been involved in a couple of negotiations where, you know, the retailer brought in the big guns, you know, to sell into the brands, the, the program and the investment ask. But when it actually came time to execute the program, there was one customer success manager on the retail media side that was managing all of this was supposed to be doing. Reporting was on the hook, you know, for optimization. That person's not set up for success and thus nor was the investment. So you do want to ask who's going to be supporting this program from the retail media network side of the equation as well. Those questions alone I think will keep a lot of brands out of trouble as they start to kind of kick the tires on whether or not the investment's worthwhile.
- [22:18]
Sree Rajagopalan
So then Joe, as you prepare to go into negotiation and you have the answers to those questions, how do brand advertisers staff up their teams and prepare them for an effective negotiation? The types of people that they want doing this and developing the skills, be it through experience or through training, what do they need to do to win at this?
- [22:45]
Joe Davis
Yeah, I think many of the manufacturers out there, specifically the teams that have worked with the Amazons and the Walmart media connects and and so on so forth, have learned that you really do want a multi functional team behind you as you're negotiating these investments with those types of retailers. Big investments obviously, so you bring more people to it. But that same thing should be replicated across any of the retail media network investments. And those key parties would be, you'd want to make sure you have a media expert on the team and that can be either from your organization or from your agency, but somebody who knows commerce media and is able to really assess and listen to the jargon coming across the table from the retail media network around whether or not this is actually making sense and the capabilities are there. That'd be one. I think the retail account team needs to be part of that conversation. And I say that intentionally that there are customer teams who I've seen attempt to just say, you know what, this is a media thing. I'm just going to go punt that over to the media organization and I'm not going to be involved until everything's done. Big mistake. Right. So you know, they need to stay involved throughout the process as this gets negotiated. Some other teams that aren't as obvious. Rgm. Does your organization have an RGM team? A would be one question. But if it does and it likely is there, bring them in because you know, this is a profitability, hopefully enhancer, but potentially not. And they need to be aware of this is just like running an in store promotional campaign. They should be aware of it. If nothing else, they should Also bring some expertise into, you know, how this might impact the overall business. To that point, I would say finance. You know, we had great success at Coca Cola keeping our finance team well involved in the process. It helped a lot in coordinating the spends across customer teams and across retail media, media networks. And over time, their expertise, you know, was an efficiency play for us. It helped us move faster, it helped us track the investments a lot easier. And then the last organization, I would say is your brand team. You know, there's too many times I've seen where the brand organization, which is supposed to be the steward of how your product is connecting with consumers, is unaware of all the various investments that are happening that are substantive in terms of driving conversion with shoppers and with consumers. You want them to at least be aware of what's going on. And for certainly the bigger ones, they should absolutely be involved because this is dipping into territories and investments that they're making that if you're on a customer team, you may not have line of sight of. And the worst thing you can do is start siloing your programs all within one media network or within one customer ecosystem. And so those are the kind of core parties I would make sure are always involved, part of your cast of characters, if you will. They can be behind the curtain if you want, but you definitely want them on your team.
- [25:47]
Sree Rajagopalan
I've got to imagine we'll talk about this in a little bit with red flags, but when those disconnects occur and all those teams are not in alignment, that's going to lead to inefficiencies and I'm sure we'll cover that. So, Joe, when I think of negotiating for retail media, there are transactional relationships and then there are long term relationships. I think retail media tends to fall into the latter camp. Like, I don't think of retail media as like buying a rare coin where I find out for sale at the local coin shop. I go down and I'm just negotiating on price. How do brands think about this in terms of I'm negotiating for something, but it's part of a longer term relationship. And so I need to bring other things to the table and that I can ask for. You know, like, I may not be happy with how a retailer is advanced, giving advantage to its own private brand on its own site. You want me to invest in retail media? Well, you know, if I'm. If, if, if the, if the advantage is causing the problem, why would I invest in retail media to solve that problem for a situation that the retailer itself has, has Intentionally created. So how, how should brands think about what they can include in negotiating as part of their conversations on retail media?
- [27:26]
Joe Davis
One of the advantages of retail media is that there is actually a lot of flexibility that sits with the retailer, which is unusual in terms of a brand working directly with a retailer on a marketing activation. So your aperture of things that you're thinking you can negotiate for should be much wider than it normally is. There's a lot of creativity that can happen in what you're asking for from them. So I mean, this can range from, I want exclusivity, I'd like preferential treatment, I want more time in terms of, you know, how long this program extends for, how much priority will this get versus other programs in the overarching calendar? I want data and you could even ask for labor. You know, I was part of a negotiation where we asked the retailers media network to optimize content and work on the digital shelf on our behalf. That was a big ad, you know, for us at the time, because we were just resource constrained, particularly with that retailer and being able to do that work. They said they would go do it and they did. Right. So, you know, there's lower cost. Yes. And future value and all the typical things you would think of in a negotiation. But there's a lot of other things that if you are creative about it and you think about, you know, what are just some of the things we would find value in, don't be afraid to ask. You know, I think anything is on the table. And because they have that margin cushion on their side, they do have a lot more flexibility in saying yes to things that might be less obvious. I mean, and I give some unique examples. I just mentioned the one on content optimization. We had another one where we were able to, you know, negotiate exclusive rights to advertise during key periods. We had another negotiation where we got first right of refusal for any of the second half of the year campaigns. That's for the organization at the time. That was when a lot of our budget windfalls started happening. Hey, we got money, we need to go spend it. So this helped us lock in some of that inventory in advance. So we knew we had some places and spaces, some homes, if you will, for that budget that would be good, that were vetted and ready to receive. So just think widely about the things that you would find value in. And you know, this is a really key piece because the more of those things you tack onto your list of I have to have, the more value you're extracting from that Investment beyond just the consumer conversion power and you know, the typical, you know, kind of things we get as we make investments, you know, with retailers.
- [30:08]
Sree Rajagopalan
I love this, Joe. It's says that retail media is still to some degree a little bit of a wild wild west and there is opportunity. Don't, don't leave something off the table without asking because what's the worst they're going to do, say no. But you know, in this case, when you start to understand that the margin that to your point, the margin flexibility that retailers have on retail media and their own customer data asset which fuels the audience creation for this, that's all very high margin for them and it's very accretive. So for them to be able to get some incremental dollars and give up a little margin to do that, that's all found money to them. So don't be afraid to ask because very often you'll get a yes or maybe see how we can work that out.
- [30:59]
Joe Davis
Peter, you said something really important which is know where they're making their money, right. So you know, there's certain things you can ask for that cost them nothing. You know, you know that, but is nonetheless valuable to you. So, you know, that's a big key piece of this is understand the thing that's really going to move the needle for them is your investment in their ad units. For a variety of reasons, not just margin, but it also, if you're a big enough brand, it gets credence and credibility to the solution to others. But there's other stuff that they can do for you that they could do very cost effectively and it's better to put it on the table as a negotiation chip than it is to just forget about it.
- [31:37]
Sree Rajagopalan
So let's move to red flags. What are things that brand advertisers should be keenly paying attention to and concerning that say to them, wait a minute, I got to step back and reevaluate because this, this may not be a winning scenario for us.
- [31:54]
Joe Davis
There's a few of them and this is all uncomfortable because it goes back to that role reversal, you know, dynamic. Right. There's still a lot of brands out there and customer teams that don't to say no. Right. And you know, when these red flags show up, no may be the answer. Right. So those could be no data sharing. Hard to believe, but it happens, you know, where there's some that are like, we're not going to share the data that you need to actually measure this or that, the measurement cost, you know, of that investment are Going to cost you extra. Right. That would be a red flag that feels like they're starting to squeeze you and also just doesn't really speak highly to their measurement capabilities, quite frankly. If they're charging you extra, they're probably trying to use you to fund the build out of those capabilities, quite frankly. So that'd be another red flag. Another one is something we mentioned before. Who's on their side that's going to help you execute this? If they're understaffed or if they're an incapable group of associates, not to be blunt, you're going to expect the outcome that you see. So you want to make sure that you've got the right caliber, the right quantity of support on the other side of the desk because you're going to need it, you know, to be. To be effective. Another red flag would be no agreement to benchmark themselves versus other places that you can invest your money. They don't want to participate in a benchmarking effort. It means that they really don't care what the other capabilities are in the market. They just want your money and they're not going to play ball with you when it comes time to proving out the valuation of that investment. That's going to set you up for all kinds of trouble, you know, down the road. I'd say a lot more retail media networks have gotten more open about this. I think the work that the IAB has helped tremendously in that space. But nonetheless, you have to keep pushing that. You may have your own, you know, process around benchmarking capabilities that you want them to participate in, to be objective, to make sure everybody's making the best decisions. Right. And then the last one is if you're constantly getting threats and an unwillingness to negotiate, it's better to walk back from the table than try to work with that, to work with the precedent that will set. And ultimately, you know, just. It's something that needs to cool off. We had this, you know, with a couple of partners at Coca Cola when I was there, where we just had to stop negotiations until things got better and it was okay. The world didn't end. You know, brand manufacturers need to understand that in some cases, no is not the end of the world when it comes to this space. Your brands will still sell, you know, but it is a. It's an uncomfortable task, no doubt. Right.
- [34:34]
Sree Rajagopalan
I've got to imagine a derivative of that is when the ad salesperson and the category manager, the buyer, are not singing from the same hymnal. In fact, they're telling you two different things. The real red flag that you're like, wait a minute, if you're saying one thing and you're saying something different, I need to step back and you two need to connect with each other before you come to me with a retail media ask, because that's only going to lead to disappointment, frustration and confusion.
- [35:07]
Joe Davis
Absolutely.
- [35:08]
Sree Rajagopalan
Yep. All right, so you shared a lot with us. I'll close out my last question. What else beyond what you've already shared, do you think brand advertisers should be looking to address and helping deliver back to their organization success? Because I mean that with this myriad of different networks, all different capabilities, some have full funnels, some have mostly lower funnels, some have reach, some don't have scale. Like what, what else should they really be thinking about if they want to be successful in their organization broadly being able to invest in retail media?
- [35:45]
Joe Davis
I'd say a few things maybe, Peter. One would be just a reinforcement of what we mentioned earlier, which everything is negotiable. You know, don't lose sight of that in, in this space. If it comes to a point where you no longer feel you're in a negotiation, you need to do a reset internally in your organization and take a different approach, which could be. No, like I said, so that would be one. Another area that I think maybe is helpful for people to keep in mind is you need to be an owner of your business. You should look skeptically at every dollar you spend and, and don't allow yourself to be robbed. To go back to our analogy of the shakedown or hold up, you know, there's a lot of customer teams, shopper marketing teams, even brand teams to some extent that are not looking as skeptically at their investments as they should. And really, if you put yourself as an owner of the company, you should really say, is this a good investment or not? If you can't pass that red face test where the CEO came and said, what did that do for us? You're not in a good position. Right. So that, that owner mindset, I think actually works really, really well in retail media because it can be very entrepreneurial. Everybody can build together. And as I said, there's a lot of negotiation around, you know, different things that can be traded. And if you have that owner mindset, you're going to be really successful in that, in that negotiation. And then the last thing I will say is this is one tool in the toolbox. It's a conversion tool more than it's a consideration tool. Retail media networks do not supplant the absolute essential marketing activities of building long term equity. And unfortunately the vast majority of them are just not quite there yet where they are truly an equity driving, you know, capability. They may get there, some are farther along and closer than others. But right now you have to realize you're fishing in ponds with retail media networks. They call themselves walled gardens, you know, in many cases for a reason. This is not the ocean. And so, you know, don't you know there are organizations and we were guilty of this too in past organizations I belong to where you start to rotate so heavily into the space that you do not want to find yourselves losing sight of what's the broad marketing ecosystem that's available to me and all the places where consumers are engaging. There's places where consumers engage a lot more meaningfully than retail media networks today. And you have to make sure that you're balancing how are you driving awareness and consideration, lifetime value with the great ability that retail media networks provide and converting those people and shifting them from your competitors and accessing data, that's very, very powerful. But it's a balance. And I bring that up because, you know, right now, particularly in the industry, we're five years, you know, four years on from our last conversation and as you said, Peter, more networks than ever, ballooning investment. I think brands all need to take a big deep breath too and just make sure they're investing appropriately, you know, across the different areas that they can.
- [38:52]
Sree Rajagopalan
Joe, you've got the classic Bob Seeger song shakedown running through my head, so I will, I will heed your advice. I think it's very important and thank you for that. To our audience, I just want to say, as I mentioned at the beginning, please, if you like what you hear and you want us to keep talking about it, just go on to Apple and Spotify, give us a rating, leave us a review. It's the best way for you to tell us if we're, we're doing a good job of having these conversations. I'll also ask you while you're.
- [39:26]
Joe Davis
While.
- [39:26]
Sree Rajagopalan
You'Re playing around with your mobile Device, go to LinkedIn, check out Joe Davis. It's the best way to find him. You can click him, connect with him, ask him more questions. I'm sure he'd love to talk to you about this. He's built a tremendous level of expertise in this area. Joe, thank you for taking time out of your day to reconnect. You're now only three episodes away from the coveted CPT Guys five Timer Varsity jacket. So something to aspire to.
- [39:58]
Joe Davis
Yeah, you know what? Let's aspire to it. It's always a pleasure. Thank you to you and SRI for building this the soapbox for me today. I'm so glad to be back with you.
- [40:10]
Sree Rajagopalan
That's great. To our audience, thanks for taking time out of your day. I hope you you found this both educating and entertaining and we look forward to speaking with you on the next episode of Wait for it. The CPG Guys Podcast Goodbye.
- [40:36]
Unknown
The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPGuys, LLC or the individual author, hosts, or.
- [40:50]
Sree Rajagopalan
Guests, nor is it intended to be.
- [40:52]
Unknown
A substitute for research on any subject matter. Reference to any specific product or entity does not constitute an endorsement or recommendation by CPG Guys, llc. The views expressed by Guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. The views expressed by CPT Guys, LLC do not represent the views of their.
- [41:15]
Sree Rajagopalan
Employers or the entity they represent.
- [41:18]
Unknown
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