← The CPG Guys
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- [00:01]
A
Hi, I'm Sarah Marzano, principal analyst covering retail and commerce media at eMarketer. And you're listening to the CPG Guys Podcast.
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B
Hello and welcome to the CPG Guys Podcast. Set at the intersection of commerce and tech. Your hosts Sree Rajagopalan and Peter V S Vaughn explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys. Hello and welcome to the CPG Guys podcast. I'm your bombastic co host, pvsb, who also moonlights as head of industry and client engagement at Flywheel, the commerce acceleration division of Omnicom, which oh my God, is now the world's largest advertising holding company. Go figure. Joining me today is my co founder of this growing enterprise. He's the chief revenue officer for Think Blue Consulting and as Papa Raj, he's the patriarch of the Raj family media empire. He's also the former president of sales at General Mills. Of course I'm talking about the man known as Sri. Sri. How's it been as a roadie on the tour of not one, but two pop star daughters, Ria and Lara? What's going on, man?
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C
First of all, you used a word in there. You reminded me of shaggy the artist, Mr. Bombastic, say fantastic. But all that said, we just got back from the five city tour. Last night was the culmination of Rhea Raj's tour at the Roxy in la. You came to the New York one. Jam packed, oversold. I'm exhausted, man. And then we get the great news. Over the moon as a family, Cat's eyes. TikTok artist of the year beating Taylor Swift, Bad Bunny, which is hard to in my head to even conceive. But Lara comes home tonight because they have two concerts here on Friday and Saturday in la. Then we go to Mexico City and the year is already over. Before you blink, going to India still got a lot going on. When I think of it, I get tired now. That's what's going on.
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B
Sheree, we I. I'm seriously thinking we need to reconsider a couple of the Lollapalooza stops in South America in. In the May time frame. I think you and I were meant to be in. In Santiago, Chile.
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C
In the house.
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B
I know Chile. In the house. Um, thanks Sree. As always, appreciate you being on this journey with me. Make sure you're subscribed to our podcast on your preferred listening platform, Apple, Spotify or wherever you get our latest episodes. And even go back and consume any of the 550 episodes we've already published. Make sure you're following us because if you follow us, then every time we publish a new episode, it automatically appears in your podcast app stream. Q1 is shaping up to be a very, very busy time for the CPG guys. In addition to some in addition to some corporate year beginning meetings, expect to see us at quite a number of industry events including Here we Go, sri. You ready for this? Let's tick them off. Ces, NRF Big show, fmi, Midwinter, Cagney, E Tail, Palm Springs, SOCOM Live, Commerce Media, Brand Summit and Shop Talk. And that's just through March. We'll be recording episodes. We're going to throw some parties, we're going to host some private dinners, all sorts of stuff going on. And if you do run into us, please introduce yourself as we love to speak with our community of industry thought leaders. It's important. We want to connect and we love talking to you. So you know, say hi, don't be shy, just come right on up. So in any event, let's get to introducing our guest for today's episode. SRI and I met her in a seaside restaurant just a few miles down the coast from Cannes. Wow, that sounds clandestine, doesn't it? It was during last summer's Cannes Lions International Festival of Creativity. She was moderating a pre dinner panel on In Store Retail Media featuring some great leaders at CVS Media Exchange, Epsilon and stratacash. SRI and I both remarked how thoughtful and engaging our guest was in leading the conversation. We come to find out that Sarah Marzano is the Principal Analyst for Retail and commerce media at eMarketer, the go to forecast, data and insights provider for marketing, advertising and commerce professionals. Her professional career spans incredibly relevant experiences. She was a buyer at Macy's. She worked at Lord and Taylor, May it rest in peace. She had analyst roles@retailmenot. Just loved all their coupons. So good. Such a good deal. She worked at Gartner. I used to live on the backside of Gartner's office in Dolphin Cove in Stanford. All these connections, all these touch points and even a few years working in retail strategy at Circana, a company that both Sree and I count in our history before she joined Emarketer last year. Sree knows that I am madly in love with Sarah's intellect and wit as I am often quoting her in my daily business activities. So without any further ado, please join us in welcoming her to her very first of what we will consider to be many appearances on the cpg. Guys, Sarah Marzano. Sarah, welcome.
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C
How you doing?
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A
Hi. Hey. Thank you for having me. And you're right. I have the jacket in my sight. So this is the first.
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B
Oh, you got a 5. 5 to get the jacket. This is one down.
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A
This is one down.
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B
Yep, one down. It's, it's, it's a slog, but if you get there. Oh, the, the victory tastes so sweet. Just, it's so. I gotta tell you, I had my jacket on today. It was the cozy, warm leather and wool and I was like, ooh, perfect for the winter here in New England.
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A
Yeah, mentally I'm in the south of France, but we are not there.
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B
Yeah, I know. I can't wait to get to Cannes. All right, before we get to our questions, Sarah, why don't you give our audience a brief overview of the work that you're doing at eMarketer?
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A
Yeah, so I am a principal analyst here at eMarketer and I cover both retail and the broader commerce media landscape. So I take our proprietary forecasts on ad spend as well as using third party data sources to sort of bring together the trends that are influencing the landscape and help eMarketer clients understand their strategies, their investments, what needs to change and what to expect.
- [06:18]
B
Awesome. We're excited to get the conversation started. I want to mention to our audience, toggle over to the digital show notes of this episode. You're going to find a link to Sarah's LinkedIn page. You're going to find a link to the eMarketer site and specifically a link to a brand new thought leadership report that's Sarah authored. It's called Retail Media Networks, Trends, Benchmarks and leadership in 2025, which will be the foundation of our conversation today. So please do go over and click those links and you can multitask as you're listening to our melodic conversation, the dulcet tones of our appreciation for the industry. All right, I'm going to kick it off. Sarah, I guess let's go with the meet cute story. What led you to develop this new report on retail media networks? What were you hearing in industry that made you believe that this might resonate in terms of thought leadership?
- [07:13]
A
Yeah, so, you know, you mentioned it during my intro, but I grew up in retail. I was a buyer at Macy's and then at Lord and Taylor. And I think even though it's been more than a decade since I worked in house at a retailer, that experience has sort of inevitably informed my perspective and how I approach things as an analyst covering the retail space. And so as retail media, you know, has really bloomed into this major industry over the Past decade I've been fascinated by the specific challenge of how retailers are set, setting up organization media organizations right. Within their retail businesses. And then, you know, as an, as an analyst covering the retail media space really specifically, I pretty quickly noticed what I perceived to be a lack of really good quality data about how retailers were building their retail media teams. And then I was hearing things at conferences kind of between sessions. Right. The more anecdotal conversations that really kind of bolstered my conviction that this type of research would have utility because I was hearing from folks on retail media teams that they were struggling to educate their executive leadership about what retail media is and what it can do. They were running into friction with cross functional stakeholders within the retail business or struggling to get the investment that they needed to kind of take things to the next level. And thanks to a sort of fortuitous partnership with the folks at Bain & Co. Who we partnered with on this research effort, we were able to run a survey of leaders at retail media teams who are working in house at retailers. And we heard from a really nice sample size of leaders across a variety of industries. And I'm really happy with the resulting research. Right. I think it's yielded really solid insights that I like to think have utility for the retail media space really broadly. Whether you are on a retail media team and you're trying to build the case for investment or shifting your strategy or if you're a solution provider looking to better understand the space. We now have this sort of benchmarking that can be utilized. And I Retail media is not about to get less competitive. And I think what's really exciting about this survey is that it highlighted some and white space opportunities that retail media teams of all shapes and sizes can really focus on to think through how can we competitively differentiate our.
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C
Offerings? Awesome. Sarah, thank you so much. Welcome to the CPG guys. Of course. Pleasure to have you. This report that you refer to with Bain highlights strong strategic conviction but uneven operational maturity across the several retail media networks that did take the survey. What do you see as the biggest disconnect between the ambition of a retail media network and the enablement of what the outcomes, capabilities, execution is today? And what do you think is principally behind that gap? Is it media and retail have never been.
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A
Together? I mean, I think that's a big part of it. Thank you for, for the question. It. I think this sort of goes back to the fact that here in the US the way retail media has sort of historically been built has been about setting up an advertising business. On retailers owned and operated digital channels. Right. There's fairly straightforward ad formats. You know, you're launching display and search ads and with that there's kind of a relatively straightforward playbook that makes it kind of easy to monetize consumer browsing behavior and tap into some pent up demand. And so when you're setting a team up that way with this sort of singular focus, I think it's really possible to do a lot with a little, especially when you're just getting started. Right. And I think that is really shifting as retail media hits this new sort of inflection point or maturity and retailers are sort of recognizing there's only so far we can take monetizing our website, especially for the retailers who are most of them, who do most of their business in physical stores. Right. And that poses a challenge for advertisers as well. We're saying we want to reach your customers and we're not necessarily reaching all of them by by activating ads on your website. And so I think that's sort of the background behind a lot of this. You specifically asked about this gap that we identified between ambition and enablement. We asked survey respondents to fill out self assessments across what we sort of set up as five critical domains in retail media. And so they assessed themselves across their own strategy, against their product and roadmap vision, against their capabilities within technology and innovation measurements and their operating structure. And what we found was that our respondents, who again were on the retail media teams feel really confident about their overall strategy as well as their vision and product roadmap. But then that confidence took this major dive when it came to some of the more executional levers and capabilities that sort of underpin their ability to execute on these things. Right. So things like their operating model and their team structure, their tech stack and their measurements and reporting. And I think SRI to your point, that brings me back to this theme of media business operating within retailers. And the fact that where we heard that retail media teams were struggling were in these arenas where retailers haven't historically had to operate or develop expertise. Right. So things like media measurement and that type of reporting or where legacy retail systems like their technology isn't necessarily transferable. Right. Which came up within the tech and innovation element. And then just going back to that basic complexity again of setting up this new team and making sure that you are folding it really cohesively into your broader operation. These are all sort of new skill sets and new muscles for retailers to build. And that's where the snags are really coming.
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C
Out. So to me, Sarah, and all of that, the number one reason and challenge that I personally felt while working in corporate America on the CPG side that this is still so difficult to execute is the operating model one that you referred to. You have media people sitting at a retailer, retailers operationally very store oriented, store mentality. And these media people are selling to salespeople at CPG companies or partnering with them who are also very operational in nature, not media oriented. Like impressions mean nothing to a salesperson, they mean a lot to a marketing person. When retail media was born, it almost feels like no energy was put in in the industry, period towards thinking about who the drivers of that operating model will be, like, who the stakeholders would be, who would actually call the shots, who's an influencer, who's a decision making person, who's consultative, who's execution and 10 years later still doesn't exist, which I think is an industry failure or industry convenience or.
- [13:50]
A
Opportunity. Right, But I think you're exactly right. I think a lot of retailers were reacting really quickly to the opportunity to set up retail media businesses. And the result was that we sort of figured out like, where can we set this up the quickest and start actioning on it the quickest? And then those teams again were able to do a lot with relatively a little. And it's only now that things are getting more complex and we're sort of recognizing they might not be sitting in the exact right spaces or maybe we've set things up inadvertently to where major teams within this retailer feel like they're at odds with each other, that the sort of major challenge is coming up around where does this sit. And then the other piece of it is that there's no playbook for this. Right. And a lot of times there's not a lot of transparency around what's actually working in terms of looking beneath the hood for the retailers where this is going maybe smoother than.
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B
Others. So Sarah, you note in the report that retail media network teams report into a wide range of functions. Sometimes the cmo, sometimes the Chief Digital Officer, sometimes merchandising, sometimes commercial. There was no clear dominant owner. And I start to think, okay, can it be driven by the fact that it just appeared wherever the person who had the most interest in owning it said, I'll do it. Is it because of the mix of the product portfolio? Is it because of the contribution that the retail customers that they work with dictated? And like, what is? If a company comes to you and says, I want to get into retail media, what's the best structure. What, what do you say to.
- [15:28]
A
Them? Yeah, and I think that's, you know, that's a tough one because I don't think there's a silver bullet answer to that. Right. I think all retailers are so different. They have different penetrations of E commerce business, they have different store strategies, they have different, let's say, mixes of private label versus national brands. I think it all has to do with what a retailer wants to see from their retail media business. Right. If the goal is to offset subpar E commerce margins. Right. By monetizing the website. Right. Then maybe it makes sense to set up the retail media organization, the E commerce team and say like that's what it's there to do and that's all we're trying to do here. Right. But if the goal is to become a core revenue driver for the retailer overall, then we need to think through like who are the decision makers that need to be involved and how can we structure this to where the retail media team has the right level of autonomy and influence to get those things done quickly. And that's probably going to look different at different retailers. But I think that's the sort of lens that this needs to be approached.
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C
From. See the other one now is our favorite topic metrics. It appears half of Those surveyed, the RMNs don't have cross functional key performance indicators. Fewer than a third are actually tying incentives to merchandising teams, which is the lower funnel portion of this. What do you think is the roadblock here that's really preventing holding back incentive alignment. And then what would good look like in this space from a KPI perspective? Like the industry still struggles with what is the right set of measurements for KPIs and many have tried. IAB is interjected, Nobody has yet to figure out something that's acceptable to the industry on what a right set of benchmark is for measurement on metrics for retail media. It strives me.
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A
Crazy. Yeah, it's tough and I think I know we'll get more into measurements. But talking about the sort of incentives and the cross functional cases KPIs, I think that kind of goes back to what I call retail media's worst kept secret, which is that the fact is that a lot of the revenue that funds retail media, especially at the beginning, isn't actually new money. Right. It's, it's repurposed money that used to sit and trade in shopper budgets that merchants have historically relied on to hit their goals. I mean they get a really high level. There's not as much understanding from the media side of the business as there could be around the fact that merchants are. We incentivize to move product and protect margin. And these budget sources are crucial levers for being able to do that. And so when those dollars shift into retail media without kind of rethinking the incentives, you can end up in this sort of zero sum dynamic where retail media success feels like it's coming at the merchant team's expense. Right. And I think that's only exacerbated when the retail media teams are only gold on ad revenue, which is something that came out within our survey that was the most sort of unique commonality that our survey respondents had across the way. Their merchant, their retail media teams are in incentivized, right. And so when that happens, the media team is going to be maybe making decisions that aren't always supporting the core business of retail. And what's interesting about that to me is what makes retail media so appealing is the strength that retailers have built right around being able to have really well curated assortments, being able to deliver what their customers are looking for. And when you have a media strategy that again operates sort of counter to your retailer strategy, that undermines the strength. There's. And so I think the key sort of what needs to happen sort of internally at retailers is connecting kind of the dots across all of those sort of historical levers and that we used to kind of know as trade and shopper and retail media and kind of really measure where brand spend performs the best. And then we can get away from treating that reallocation like it's taboo. Right. It's money that's flowing into the retailer with the goal of moving more product. And so if we can get towards working toward that same goal, right. That's going to be sort of the crucial thing if retailers want to then increase and unlock the incremental spends that everyone's chasing. So when we think about good KPIs, I think retail media needs to support company goals, right. And I think merchants need real ownership in retail media performance. Right. And I think we're seeing some of that, you know, play out, right? We've seen major grocery retailers like Kroger restructure their businesses to bring more of the key stakeholders in line and reporting to the same business leader. And I just published my sort of commerce Media Trends and predictions report going into 2026. And one of my key predictions is that we're going to see more retailers kind of reorganize to bring retail media closer to their core operations and make sure that they're kind of treating this really holistically. But that doesn't get necessarily into the external sort of KPIs and the measurement piece, which I know we want to talk about as.
- [20:05]
B
Well. Well, let's, let's click into that. I just read today that the IAB released a new viable framework for measuring what they consider to be a verifiable in store impression. So that was kind of like the next, the next evolution of trying to more accurately measure what is not necessarily as personalized as what you get to expect on programmatic or owned and operated product search listings. But measurement and reporting ranked as, quote, the most pressing Challenge unquote for RMNs, according to your report, Especially proving incrementality. What innovations or methodological shifts do you expect will actually move the industry forward and, and finally get us out of, you know, still relying a little too heavily on more traditional mechanisms like linear.
- [20:57]
A
Television? Yeah, no, absolutely. And I think we've been hearing for so long from the buy side in retail media that measurement is a pain point. So it was no surprise to me to hear that retail media teams are kind of struggling with it too. And I think this shift over to the focus on incrementality is sort of inevitable as ad buyers feel more sort of scrutiny and pressure on their budgets. Right. They want to feel really confident in the proof of what their retail media spend is delivering. And again, you know, I can't shout out the IAB enough for the work that they're doing here. They did, they published that verifiable framework for in store today. It was within, I think, the past few weeks or months that they published new resources on incrementality that gives the industry kind of shared definitions for what this means and the different approaches and methodologies that can get us to providing incrementality measurements in a really helpful way. And I think, you know, they, they do this, I know that they work on this by getting industry buy in. Right. Their work is not happening in a silo. They've got folks sitting on their board who are kind of weighing in on this. So we can all feel like we have, have trust and, and that the structure and shared definition has credibility. And I think that's sort of key. Right. But that's not where the work ends, it's kind of where the work begins. Right. We need to build this foundation for shared definitions. But then the next step, and I think what's crucial to remember and the research really highlighted for me is that you can't fix measurement on its own. It kind of sits on top of everything else. Right. So in our research, the issues that were kind of right behind measurement were tech fragmentation, manual processes, and then we saw gaps in talent coming to. It was right after measurement as the key challenge. When we asked our survey respondents where they were experiencing the most difficulty to filling their talent gaps, measurement and analytics rose to the top. Right. So it's not only about getting those shared frameworks and those shared definitions. So we can all say yes, this is how we're going to measure this thing, but it's about making sure that the retail media teams themselves are armed with the right talent, the right expertise and the right technology to then be able to deliver on.
- [23:01]
B
This. Let me remind our audience that today Sri and I are speaking with Sarah Marzano from eMarketer. She's the author of the brand new report, Retail Media Networks Trend Trends, Benchmarks and leadership in 2025. Over to you.
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C
Sri. You know, any conversation in retail media is incomplete without talking about the newer formats of retail media. There's obviously the on site, but today there's so much buzz around in store and then there's the off site. Everything from streaming TV to you name it. I know personally that the in store one is a very tough one for retail media to climb because display feature in store pop ups, things of that nature have traditionally been owned by the merchant or the operators of the store. They're not going to yield that because it's their P and L. It's just not going to happen. But yet the industry's made such a big push in the last few years about in store retail media and off site. So, you know, survey respondents though from the retail media RMS think that scale is going to come from here and there's a lot of future growth. So if you were to assess that, Sara, what formats or surfaces do you see emerging as the next big accelerators of retail media revenue, whether merchandising wants to accept it or.
- [24:16]
A
Not? Yeah, and I think this isn't. I'm going to ramble a little bit, maybe frustrate your viewers that there's not a silver bullet answer for this either. Right. I think on site ads are the most mature when it comes to retail media. But we know thanks to folks over at companies like Pental who put out great reporting right around how well optimized retailers websites are from a retail media standpoint, that a lot of retailers have room to grow. Right. So Penn State puts out a sponsored search products report, I think twice a year. So you can compare things like the average number of sponsored products on, on a page across a set of retail media networks as well as the search coverage. And you can see really clearly there how far ahead players like Amazon and Walmart are and then how much room to grow other retailers have. So I think there's a good reason for retailers to continue focusing on optimizing their owned and operated digital properties. That's some of the most margin rich revenue you can kind of come by. But again, going back to my earlier point, most retailers do the majority of their business inside their physical stores. So monetizing your website is only going to get you so far. So I think you have to do kind of a few things at once and I think it has to kind of align back again to what your vision for retail media is. I think physical stores are a huge opportunity. I think it's the industry's favorite stat that more than 80% of sales still happen in physical stores. That number goes up to more than 90% in food and beverage. Right. So it's so crucial. But again, the way this is going to roll out is going to require those organizational restructures and rethinking about the way incentives happen and the way teams are gold in order to, to happen. Sree to your, to your point. One of the things when I think about In Store and sometimes I get met with really kind of incredulous looks when I say this, is that there's this vast variety of formats that in store digital media can take. And I think that not all formats are right for all environments, but I think some are also easier to accomplish than others. I'm really bullish on In Store audio. Right. I think that it is something that kind of fits in with a sort of hardware infrastructure that most retailers already have in place. I think customers are used to hearing audio while they shop, so it's not super disruptive. And I think it's a bit easier to get off the ground than some of what we might picture. I think we like picturing really sexy formats like in store video that are completely personalized and tailored, but I just don't think things are going to develop that way. The other thing that I'm keeping a really close eye on and I'm excited because we've been able to really fortify our ad spending forecast a lot in this arena is of course off site. Right. Because off site is an opportunity for retailers to use the breadth of their first party data without limiting it to, you know, only being seen by Customers who are browsing their websites. Right. And activate it where they are spending time across the open web. And I think social platforms are really sort of key element of that as an arena where we expect to see sort of continuing to grow. And I think it's a wonderful opportunity for retail media networks to deliver on incrementality that advertisers are looking for. Right. Because the further away you get from that digital point of purchase, the more likely it is that you're able to say this, this purchase that we ended up influencing wouldn't have happened otherwise. So lots of things. No, no.
- [27:34]
B
Single. Yeah. I think the promise of in store media is just as people are cutting the cable and moving to streaming, they're still going to physical stores. So the audience is there. So if you can't get audience through linear television, you can still get it in store. So that's the promise. The challenge is to your point, how does it appear like the thought of investing to deploy digital screens all over the store? Somebody's got to come up with, with the capital cost historically it hadn't been the retailers. So then they have to partner. Well now if I've got a partner, does that mean they're sharing in the revenue now all of a sudden, if I'm taking money out of trade, where I was selling an end cap which I recouped myself and now I got to share it with the screen provider. Well, now, now it's. Is it economically viable? So there's there like there, there are some realities. I mean I tend to like what, what our friend Harvey Ma and the team at Sam's Club Map have done. Oh, I love it. It's a software investment. The hardware is updated by the consumer when they buy a new phone. And I like the in store radio too because there is some hardware involved in it, but it's a single deployment at a store and then once it's up and running it's just feeding into the audio system. It's not that again, it can be managed primarily by software. And so I think those are two mechanisms that give you the scale. And we know that listen radio works and in store radio is going to work. So it absolutely will have an influence. So Sarah, respondents to the survey believe that zero click search and agentic AI will be the most disruptive forces shaping retail media over the next three or so years. What's your recommendation on brands preparing for that shift? What do they need to start thinking about now so that they're ready as it really starts to scale.
- [29:24]
A
Out? Yeah, I Mean, I think it makes sense for both, you know, for brands, you need to monitor how monetization is getting introduced to what I would call like a platform AI, platform owned assistant, like a chat GPT or, or a Gemini. Right. What are those monetization opportunities that are appearing there? And then you also need to keep an eye on how retailers who are investing their own proprietary agents, how monetization is developing there inherently, like this is probably overly simplistic, but this is just another surface where consumers are spending time. Right. And discovering and considering their products. And we as a retail industry, broadly and as an advertising industry have adjusted for those changes historically. Right. And thought through, like which formats sort of make sense here. What is the best way to get in front of our customers? So I think this is something there actually is more precedent for than we might otherwise want to admit because this can kind of get whipped up into a very hyped up frenzy very.
- [30:18]
C
Easily. Hyped up frenzy, absolutely. Indeed. But next year the RMNs through this survey say that the top priorities will shift towards tech modernization. Aha. Surprise. We just talked about AI and software data infrastructure because one of the greatest assets the RMNs are building are indeed data sets. But of course they're only meaningful if you pull insights from those. And then off site media acceleration, to me, the off site one is more a play of inventory of on site is running out. So you have to go somewhere. What will separate the networks that are the superior ones and those that are also playing just because they have to kind of and actually.
- [31:03]
A
Deliver? Yeah, I think for retail media networks, it's really about getting the buy in of your executive team and stop, you know, sort of expecting to get a lot in exchange for a little. I recognize that that is easier said than done, but the fact is that without investing where it sort of needs to, needs to happen, in terms of bolstering your technology capabilities, in terms of making sure that you have the right expertise on your team, in terms of making sure that you're able to keep up with and act on these new measurement resources that brands are inevitably going to start expecting you to deliver on. Any failure to sort of take action in these arenas is going to cost you both in the short term, but I think specifically in the, in the long term as well. So I think retail retailers and their retail media teams need to start thinking about playing the long game. And again, do we want this to be a core part of our revenue and our business? And if so, what are the hard decisions that we need to make and Potentially the investments we need to make in order to make sure we're setting ourselves up for long term success.
- [31:58]
B
Here. Yeah, I think that the, the trade offs that they have to make is going to be, is not, it's not small. Right. A number of years ago, the big blue chip consultants, the McKinsey BCGS, walked into all these retailers and like, hey, you've been operating on like a 2% margin for years. Let me tell you about this, this great idea called retail media. And they had these dollar signs dancing in their heads that they're going to go after these budgets that here until now they had not been able to access. And it's really high margin and it really hasn't panned out that way. Like most of the, most of the teams that are buying retail media are the, are the account teams, the shopper marketing teams that call on these customers and it ends up coming out of their budget. And that's a trade fund. And that's not only a swap, it's actually bad for them because as I mentioned earlier, when they sell an end cap, they keep all that money. When they sell a programmatic ad, they got to share some money with the trade desk and they got to share some money with whatever.
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C
Company. Too many middle.
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B
Players. There are too many middlemen. There are too many middlemen. And so shout out to our friends the Middleman on the Middleman podcast, Todd and Tom. Tom, Todd, how you doing? But no offense to you guys, we love you guys, but this is a big deal, right? Because they're just, they've got to figure out how they can grow their business. And I don't think the industry is shaken out yet. There have got to be coalitions that have to be made. They may need to just go to alliances through third parties like Bridge to be able to say, listen, I'm just going to focus on my owned and operate and I'll sell that to the shopper marketing teams and I'll let someone else sell my audience as part of a Nash because as part of a national facsimile. Because at the end of the day, brands want scale. They want transparency and measurement, but they also want scale because it takes just as much effort to execute a campaign on schnooks as it does to execute a campaign on Amazon. And where are you going to get more bang for the buck? Get where I'm going to get on Amazon. So there's still a lot that's got to shake out right here, right.
- [34:13]
A
Sarah? Yeah. And I think anything that the retailer and their Retail media team does. It needs to be in service to reducing friction to the advertiser. Right. The easier you can make that process. Right. The better off you are going to be. And I think there is a multitude of ways that you can kind of go about that. But again, another thing I'm hearing more and more anecdotally from brands that I talk to is that they are encountering situations where, you know, the right hand doesn't seem to know what the left hand is doing. Right. And brands see a reason for distributing at hundreds of retailers. So I think that it's realistic to think that brands could see a reason for investing and driving more spend across a great number of retailers. But you can't make it so difficult because inevitably what's going to happen, they're going to consolidate their spend across the biggest.
- [34:58]
B
Players. Yeah. I think if we look on a spectrum of 1 to 10, in terms of the level of complexity that it takes for someone to buy retail media, we're probably a little closer to the one end than we are to the tenant at this point. And until it gets closer to 10, where every media buyer knows I know how to buy retail media just like I know how to buy billboards, like I know how to buy linear television, we're not going to have the kind of adoption that we would.
- [35:24]
A
Like. Yeah, I think you're absolutely.
- [35:25]
B
Right. All right, well, so we've obviously talked a lot about this report. We haven't shared everything because, hey, you want to know everything, you got to get the report. So there are a lot of people now that are probably piqued their interest. So, Sarah, how do interest rates professionals learn more about this research report? I know we said we're putting a link in the, in the digital notes. How about what, what, what are your thoughts on them then learning more about.
- [35:50]
A
This? Yep. Use the link on the show notes or go straight to eMarketer.com and you can learn more about getting access to our research and insights because there's plenty more where this came.
- [35:59]
B
From. And I can't wait to talk to you about your next report. I think this has been a fascinating conversation and Sheree and I, I are looking forward to doing this on a more frequent basis with you. To our audience. Thank you for joining us. It's now thrice each week for our podcast conversation. We greatly appreciate the now over 40,000 LinkedIn followers who like and share our content on a regular basis. We love you for that. Thank you. They're our version of the cat's eye icon, siri. We have to come up with a name that's catchy, like Icon. I like that one. It wasn't until I saw it spelled out, I'm like, oh, eyecon's icons. I was a little slow on the uptake there. Sri. You know me. It takes me a little while to do that. Please do follow us on your preferred listening platform. Give us a rating on Apple or Spotify. It helps make our podcast more findable by your industry contemporaries. And we want to see you at any of the spring events that we just mentioned at the at the opening. We're kicking off with CES. We'll close out Q3 or Q1 rather in March at at at Shop Talk. But we'd love to talk to you. So please do, please do come up and say hi to us. Sree this was just a power pack episode. A lot of jam packed full of knowledge. What's your. What's your big.
- [37:18]
C
Takeaway? You know, one thing that bothers me is 10 years later, we're still talking about the same topics in rmn. Do they have the measurement right? Should in is in store, really? Retail media scampering down, running the race to go to off site because that's the only place inventory is bountiful and abundant, and then talking about where the dollars will come from. These were the problems 10 years ago. But then what stood out to me is what we talked right at the beginning that Sarah kind of pointed out. If the industry had put time, attention and energy right up front on getting the operating model right, none of these problems would exist today. The right players would have been in the room. You know what I'm.
- [38:02]
B
Saying?
- [38:02]
C
Yep. To me, that is the single biggest challenge we have in this industry. And no matter what we do to solve other stuff, IAB could keep putting out report after reporter recommendations on measurement. Nobody's going to follow it if you can't solve the operating model with the right people sitting in the room. No.
- [38:21]
B
Chance. Yeah. It's going to take a bunch of big retailers and big manufacturers to kind of align around this. I mean, the IAB is doing yeoman's work in terms of trying to set the standards and make make retail media more standard in how it's bought and how it's, how it's performance measured. But it's still a bit of a wild West Sree and it's gonna. And I'll say this, you know, the pandemic didn't really help. Right. It it threw us into just trying to throw spaghetti at the wall and we Were trying to save our volume. And I think, I think we're finally past the pandemic era of uncertainty, not economics withstanding and tariffs. But I think it's time that the industry put our nose down to the grindstone and really just focus on how we make this. What Cara Pratt has always said, which is retail media is media. How do we make that as standard as possible to make it easier for people to buy it, easier for people to understand how to activate, how to measure it and how to build it into their overall plan? Until that happens, we're still going to be playing at the.
- [39:32]
C
Margins. I think, Peter, the challenge in the industry for as many people that come from the media world and would like to see this as media, because that's the metrics they're used to, is it, Is it really, Is retail media really media? Is it more? Is it media on steroids because it's got the lower funnel activation that media has historically never been able to connect to? It's been an attribution world. This is why you got to get the right stakeholders in the room and have the right owners in the room and go through that framework. Who decides, who informs, who consults, who executes, doesn't exist, by the.
- [40:08]
B
Way. To those brands out there who are looking to get their commerce media game up and running, having a really good creator and influencer is important. Papa Raj, I hear you now have over 150,000 TikTok followers, is that.
- [40:22]
C
Correct? There we go. That's where you should look for.
- [40:27]
B
Content. You need to start talking to Papa Raj here because he is the CPG industry's biggest professional influencer as far as I can.
- [40:36]
C
Tell. Don't forget the 119k on.
- [40:38]
B
Insurance. Well, there's also, you know, I don't know, maybe Gwyneth Paltrow is kind of big there too. She's got, she's got some clout in the CPG space. But in any event, Sarah, thank you for taking time out of your busy day to speak with us about your great new report. We're going to have a link to it. As I said, the digital show notes this episode along with links to Emarketer's site and your LinkedIn profile. We really appreciate it. We do hope you'll come back soon and talk with.
- [41:02]
A
Us. Yes, thank you both for having.
- [41:03]
B
Me. Cherie, as always, thank you for joining me on this journey to our audience. Thank you for choosing the CPG guys to educate and entertain you. We look forward to speaking with you on the next episode of Wait for it. The CPG Guys Podcast Goodbye. The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPG Guys LLC or the individual author, hosts or guests, nor is it intended to be a substitute for research on any subject matter. Reference to any specific product or entity does not constitute an endorsement or recommendation by CPGuys LLC. The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. The views expressed by CPTGuys LLC do not represent the views of their employers or the entity they represent. CPT Guys LLC expressly disclaims any and all liability or responsibility for any direct, indirect, incidental, special, consequential or other damages arising out of any individual's use of, reference to, or inability to use this podcast or the information we present in this.