The $170B Creative Wasteland of Retail Media Networks

0:00Brad Keeling: This episode is brought to you by Ipsos. When you think retail media networks, you don't immediately think it's the place for creative agencies to play. So why is Ipsos Creative Excellence digging into this space? Because spend in retail media has surged past the spend behind TV and connected TV combined. mind. It's a whopping$170 billion spend, and it's a creative wasteland. As the leader in ad effectiveness, Ipsos Creative Excellence can demonstrate how every dollar in this space can not only drive conversion, but also build brand. Check out Ipsos' Creativity Overclicks, reclaiming retail media for brand building.

0:44Brad Keeling: You'll learn why quality brand building creative matters just as much at the point of purchase as it does during the Super Bowl. Check the show notes or this episode's page on our website at onstrategyshowcase.com for a link to the free report. Now back to the show. Okay, so we are planning a couple of live shows that I wanted to briefly mention before we get into this episode. We are going to be at GSD &M in Austin, Texas on September 10th. It's a Thursday starting at five o 'clock. We are taking on the spot on the road. And those of you who are familiar with the show will recognize that planners, it's basically planners talking about brands they love, but never worked on planners come on the show.

1:31Brad Keeling: They pitch campaigns. They love. We talk about them. We debate them. We have cocktails. We have a ton of fun. We're taking it live now on the road as part of the live tour. The first stop will be at GSDNM in Austin. The second stop will be in New York City at Johannes Leonardo. And that show is taking place September 23rd at 6 p.m. You can learn more about both of these shows on our website at onstrategyshowcase.com. It's under the live tour tab, and you can get your tickets to both of those shows. There'll be more details coming out on this later. But in each of those shows, three strategists from each market will each come on with a campaign they love but never worked on.

2:14Brad Keeling: We'll pepper them with questions. We'll have some drinks. We'll have some food and some great conversation. And then, of course, at the end of it all, one of those brands will be selected as the distinctive winner and get the coveted on-the-spot trophy on the night. It's something everybody wants but not everybody can have. So excited about that. So let's talk about today's episode. We're talking about this report that just came out from Ipsos that is called Creativity Over Clicks, Reclaiming Retail Media for Brand Building. It amazed me when I looked at this that the spend on retail media networks, which includes in-store as well as on-site and online content, is$170 billion in the U.S.

3:04Brad Keeling: I think it's in the U.S. only, I believe. And it's in essence a creative wasteland as a lot of that point of purchase stuff has been in the past. Now, there's a lot of good creative work that's out there. We're not saying that all of it is bad. We're just saying that most of it is bad and could be improved. But there's a lot of politics involved in this. There's a lot of people who believe in a very pure performance-oriented message and that it isn't a place for branding or that branding of messages at a performance level might dilute to their performance. So there's a lot of points of view on this that are interesting.

3:41Brad Keeling: But I think what is fair to say is that most people believe and would agree that there's ways to improve upon it. And when you're talking about a$170 billion spend, it is definitely worth paying attention to. And as Peter Hauer talks about in this episode, craft and attention should be paid to the type of messages that we're putting out in these channels, particularly online and how important that is. So this is my conversation with Petter Howard, President of Advertising Research for Ipsos in the U.S. And Brad Keeling is EVP Precision and Performance at Infinite Roar, a publicist media agency.

4:26Brad Keeling: Enjoy. So, Petter, I think the place to start is to talk about, in talking about retail media networks, it's not assumed that everybody knows what they are or the scope of them. Can you tell us what they are and what are the various environments they appear in?

4:43Pedr Howard: Sure. So, I mean, at a basic level, it's about brands buying ad space from the retailer. So the biggest two in the U.S. would be Amazon and Walmart. But then all of the retail stores, grocery stores, banking, credit cards, everyone is coming up with different ways of selling this space. And ultimately, it's about they have access to the point of purchase and they control the transaction. So they're being able to sell people lower at the funnel, closer to closing that loop on transaction and really knowing who's in market at a time. So there's many different forms. The most basic form is kind of those sponsored search results.

5:22Pedr Howard: So you're in the grocery store, you search for snacks or potato chips, and certain brands will jump to the top of that feed. um you know click here buy now add to cart um but there's lots of different forms of advertising

5:35Brad Keeling: around that but are are they are they different in terms of one might be a sponsored product in your feed but it's not necessarily an ad-like object are they are they both considered the same

5:47Pedr Howard: in terms of the spend yes so when we some of the um the jumping off point for this report was that the total spend on retail media has now overtaken the spend on TV. So that is all of the money that's flowing in terms of media dollars to the retailers and commerce side. So that would include all of the different types, yes.

6:05Brad Keeling: Yeah. Brad, what about your thoughts? How do you kind of think of them?

6:09Pedr Howard: Yeah, so definitely, as Petra was mentioning, the on-site placements are where brands have started. But what we're really starting to see is it's all about the data, the data that these retailers have that are opening up to brands to be able to target. And so I think what we're going to continue to see, you know, as spend continues to increase, we start seeing these ad places not only directly on their websites, but also off-site doing co-branded social ads, display ads that then drive back to the retailers.

6:41Brad Keeling: And so what's the advantage, Brad? With your clients, when you hear about it, what are they thinking of it? And is it any different than what they used to think of in terms of point of sale?

6:51Pedr Howard: So it's a little bit more of an immediate measurement. So we're seeing a lot of clients who are looking at retail media to win the digital shelf, to be able to measure ROAS, to be able to look at new to brand buyers, all of those metrics that the retailers are now providing as part of their data and measurement. But beyond that, they're also using this as a way to find relevant customers in other places. So as I was mentioning, if you think about the ecosystem of Amazon, for instance, being able to now use that same targeting for someone who's watching Prime Video and reaching that customer and then get that closed loop measurement as well.

7:34Pedr Howard: And so for a lot of our brands, it's not only a way for targeting, but it's also relating back to their joint business plans they might have with these retailers, their commitments they've made ultimately to almost get more shelf space. So these retailers are starting to look at, you're investing money with me and our retail media network. It also is counting towards some of your trade or shopper marketing dollars as well. And it's really shifted how brands are starting to think about how they have to work with these retailers.

8:06Brad Keeling: Is there a downside to it? I mean, it seems like it's a nirvana moment if you've got undecided shoppers.

8:13Pedr Howard: i mean yes except that most people aren't currently in market so i think we've learned that there's an element of this which completely goes against um i think the you know the industry somewhat aligned at this point um the long and short of it um how brands grow and mental availability and james herman's new book future demand there's many different pieces on here showing that we can't just target people in market and we have to be changing how people think about us when they get into market in the future. And therefore the concern here is that this is very much a performance channel as written.

8:48Pedr Howard: Um, and all you're doing is influencing those few percent of people who are currently in market. And a lot of this is digital as well. Remember, um, the vast majority of retail media spend is on digital. It's not count. The in-store stuff is a small fraction of it. And yet I don't buy most of my things online. I buy a lot of things in stores still. So even the digital environment there has to influence a future purchase when I go to the brick and mortar next week or next month. It's not all by now. So many sales are just going to be missed from that. If you think about yourself as a consumer, first and foremost, to Petr's point, there are so many times where there are certain things I only buy on Amazon, certain things I've never purchased on Amazon.

9:30Pedr Howard: I only buy in-store with a different retailer. And so that doesn't mean if I'm not in market, then that there's not an opportunity to also serve me an ad for that product. And again, using potential historical purchase behavior or other signals that show that I might be a relevant prospect in the future. And I think that is where retail media can really start to branch out. And especially as we think about cross-promotion, I've worked on a number of brands where they started using it as an area to promote some of their other products. Like people who purchase one type of product, marinara sauce, maybe they are also likely to purchase pesto sauce, but they don't actually even know we make it.

10:12Pedr Howard: So let's find those areas of opportunity for us to either think about the creative messaging or how we show up a little bit differently to start introducing other brands to help grow our portfolio. So I think there is really so much that can be done beyond just the sponsored search ad, getting your product, making sure your product is showing up at the top of the digital shelf. There's so many other opportunities to really capture that audience when there is a mental availability.

10:39Brad Keeling: Talk about Walmart's acquisition of Vizio, which is a maker and seller of display units, TV, smart TVs that come into our homes. They now own that company. How does that fit into their plan and why do they do it? Sure.

10:59Pedr Howard: So if you think about, I think Walmart and Amazon are on the race to win each other's share, right? So they are definitely the two biggest players, I would say, in this space. And Amazon, of course, has a very robust video. You think about Prime Video, their original series. And so Walmart also to play in that space needed to also have a video offering as well. So now, if the same logic of using Amazon data to target folks who are watching connected TV streaming through Prime Video and some of the other video networks, Walmart now also is offering that capability through their acquisition of Vizio.

11:42Pedr Howard: So being able to open up connected TV and video inventory. And so as we are starting to see, as Petr kind of mentioned at the beginning, you know, at the on start of this, it was all about on-site ads, being able to win the digital shelf that way. It's now really getting into these other larger, call it a little bit more branding tactics.

12:05Brad Keeling: Let's talk about this report, Creativity Over Clicks, is this Ipsos report, Reclaiming Retail Media for Brand Building. Tell us about the report.

12:17Pedr Howard: Right. So starting from what we're talking about here, just the meteoric rise of retail media. And the most asked question we've had over the last 12 or 18 months from the big brands and advertisers we work with is, how do we think about retail media and what's going on there? um so what we did was we um inserted ads into mocked up retail environments of amazon and walmart and had people go through a dummy shopping experience where they would be exposed to static display or video ads around the the shopping experience and we'd look at the both the change in behavior within the website but also the performance of the ad across our usual um creative effectiveness metrics to kind of overlay the two of those.

12:58Pedr Howard: And so, I mean, we talked about it there. The number one point is if you target people who are in market right now, your ad effectiveness jumps. People are more likely to pick your brand. The brand's going to have a bigger, the ad is going to have a bigger impact on brand choice when people are in market. So the basic proposition of retail media does work. The issue, as we talked about, is how do you do this more long-term? And And so what we also wanted to get at is, can you use these retail media environments to build brand and potentially influence future purchases? And also, does creativity matter?

13:33Pedr Howard: So if you go to some of these websites, a lot of the ads you see are pretty basic, right? I think one of the lines where you're saying is, retail media has gone past TV, but it's a bit of a creative wasteland out there. And it really is.

13:47Brad Keeling: It's brutal. I mean, absolutely brutal. Not at all fit for channel.

13:52Pedr Howard: Right. And yet more money's going into that, right? You know, we talked about this at Cannes, and I made the joke that, you know, there's more money going into this than TV now. But when we're all in the theaters in the evening, they're not handing out many awards for the creativity of the retail media awards, right? We're all focusing in on the film and the TV and the big emotional brand campaigns.

14:11Brad Keeling: But are they working, Petter? As performance-oriented messages, are they working?

14:17Pedr Howard: Yes, they do, as performance metrics. and what we're seeing is more and more opportunity. And this is where I think the push for the retailers as well is important, is how can we use these platforms to enable more creativity? How can we think about this to the stuff Brad was talking? How can we let this, you know, when you think about offsite and you think about linking it to TV and getting away from just that add to cart buy now button, how can we use all of this great data about who people are and following that journey, but start to build future signals for the purchases when they will come?

14:49Brad Keeling: So give me an example of, because I'm trying to get my head around it too, is when we talk about doing brand building in order to appeal to people who will be in market later, what are we talking about here in terms of creative expression? Is it something that can do both immediate return and long term that it has a branded element to the message?

15:11Pedr Howard: Yeah. Yes, exactly. So, you know, some of the high-performance retail media really does also work as brand media. And we saw that within the experiments that we ran, where some of the ads, the video and the display ads that were running in these environments are already boosting long-term signals. Where that worked, that's where creativity and brand building comes to play. Because the ones that did that were often ones that leveraged established distinctive assets and they were a translation of a campaign that was running on other channels so m &ms was a big example that we we championed uh and we talked up in our presentation where you know bringing in the m &ms characters and using the distinctive colors and format of that is going to trigger all of those great memories from elsewhere and that's going to keep building that brand world for people um for future purchases so that versus some of the very uh copy and paste logo product sharp click here to buy now ads that you see there's a huge difference between taking your brand world into these new environments and just going for the sort of cookie cutter approach

16:18Brad Keeling: brad would you agree with that number one do your clients feel that they're working well

16:23Pedr Howard: they do i would say the clients that are actually doing it um are seeing success um i think part of the issue lies with sometimes just the silos or segmentation even within clients themselves. So the team that's working with the creative agency that are making the brand spots that are elsewhere, sometimes it's completely separate from the team that's creating the ad units for retail media. And in their mind, it's retail media equals the pack shots, how we're going to bundle it, making sure we have the promotions added to the piece of creative and producing that versus the brand is the whole look and feel over on the other side.

17:05Pedr Howard: And sometimes those things don't connect. But when they do connect, and there's no reason they shouldn't, if you're seeing a TV spot and then you go to someone's Amazon brand store, they should look and feel the same way. They should have the same font, themes, colors, all of that good stuff that should trickle down to really help drive that brand connection. And I think when we have seen clients start to be more deliberate of bringing that creative into the work that they're doing for retail media we're seeing more success higher click-throughs higher conversions all of all of that great stuff what

17:39Brad Keeling: you do is you you really as a as somebody at infinite roar you're involved in precision marketing you're involved in performance marketing um is there some is there a point of view that um i don't want brand oriented messaging to interfere with my performance that's already working well, is that a resistance that we've got to overcome within the performance-oriented community? It is a little bit.

18:05Pedr Howard: I think the teams that have really started to see ROAS driving up and are really being held to those short-term metrics are a little hesitant to say, let's not change it when we've had the buy now, when we've had the promotion. That's what's really driven performance before. And so I have seen some teams that are a little hesitant to bring in more, call it, branding-esque type of creative directly into the platforms. And there is, you know, with some of these retailers, there are some rules around if you're driving off-site and you're using, you know, the retailer data, it needs to drive back to your retailer environment or potentially your website that it can't drive elsewhere.

18:49Pedr Howard: and so in a lot of cases it is co-branded with that retailer but just because it has the retailer logo on it doesn't mean that everything else can't still be the same look and feel as your overarching brand creative and brand voice and i it arguably it really should be pattern does it

19:08Brad Keeling: involve um buying a different type of unit in order to have a better branded performance oriented ad if that's the right way to label it?

19:17Pedr Howard: I think so, yes. We talked about the impact of sponsored search, and then we talked about the display and video in the environments, and we saw much greater performance with the video than display, as you would expect, probably, because of the richness of that format. But yes, and I think that there are also placements. And again, I think we're only scratching the surface of this. I think often the inventory is supplied, supplied and it's a little bit of let's fill it with the work that we've already got put it out there um see what's happening we're not really thinking about this for me uh that's what the opportunities are and i think that's where the the maturity of the channel is starting to come now and with more opportunities both on-site and off-site and to use richer formats

20:03Brad Keeling: so patter tell us make the case for the report because it's a focus on creativity and creative expression and creative leverage. Give us a couple of minutes on what you want to make sure people get out of the report.

20:19Pedr Howard: Yeah, so I think the most important thing I would say from our report is that the creative that you're running on retail media really matters. This should not be an afterthought of following the retailer guidelines or shipping generic assets from other things and just dropping them on retail media. So firstly, the same asset doesn't perform the same on retail media as it does off site. So if you take a regular display and then you put that on retail media, it might perform better. It might perform worse. So you have to think about being fit for platform. Secondly, um, when people aren't directly, you know, the further people are from being in market, the further people are sort of out of market and still considering the more difference there is between a good and bad ad on creative quality.

21:02Pedr Howard: So creative quality really matters when people are further away from purchase. And so think about what we're running there. But the creative spread, so one of the stats that we looked at recently is if you look at the top performers and the low performers within these retail media environments, the spread of that from top to bottom is the same range as you see between a year's worth of Super Bowl ads. so if you think about the great creative in super bowl and you think about the ones that you forgot the day after and never remember that they ran that difference in recall of the ad remembering what brand it's for and influencing on your behavior there's as big a difference in these retail media ads as there are in super bowl spots and you wouldn't just make any old ad and just throw it on the super bowl and not care about it right you would obviously do the work to try and make it as good as possible because you see the returns from it.

21:56Pedr Howard: But a lot of times these retail media spend isn't having anywhere near that sort of craft and care going into it.

22:02Brad Keeling: So Brad, what do these networks look like three to five years from now? I mean, and what's going to be the definition of a network? Yeah, I mean, it is definitely evolving.

22:14Pedr Howard: So we've spent primarily today's conversation so far talking about really endemic partners. So tomato sauce, you can buy it directly from the retailer. But I think the future really is the monetization of this first-party data and its use cases that can be used across a number of different channels. So being able, to Petter's point, to target someone who's been a historical category shopper of, we'll keep on the pasta sauce example, right? So being able to reach them then with a TV spot streaming, I mean, even though they're not in market, we know they're a heavy buyer of that. So imagine taking that sort of concept for other brands that are non-endemic, that maybe don't sell a physical product.

23:00Pedr Howard: We're working right now with an insurance company who is looking at some of this data to target new families. So people who have just started purchasing a lot of baby products, maybe they're purchasing formula and diapers, as this really very relevant signal that this person has an infant in the home. and being able to find audiences in that way using this retailer data. And so I think as this continues to evolve, we're going to start to see those types of partnerships and those types of brands who are starting to explore these very rich data sets and this very rich deterministic credit card purchase data to use as a very, very strong signal for an audience that they're trying to reach.

23:45Pedr Howard: And I think this continues to evolve across, you know, we've talked about video, we've talked about on-site placements, display, we're seeing, you know, creators, podcasts, all of this continue to expand within a retailer's ecosystem within their networks as well. I think the measurement and the accountability of these channels is coming up more and more under the scrutiny here. I think ROAS is very much based on last click attribution in many cases, and it's also often served to you by the retailer, right? So it's not really an independent measurement. It's coming as a result of your campaign.

24:23Pedr Howard: I think people are getting more and more skeptical of the worst parts of attribution and ROI and those sorts of chasing sales. is coming through in some of this. So I think measurement is going to move past that and start to really drive a lot more about incrementality. I think there's going to be awakening to a lot of people who are pouring millions, if not billions of dollars into channels that are just giving them the conversions they were going to get anyway. I know this person is going to buy this product. We'll serve them a few ads for the product. They bought the product. Great job, Ad.

24:55Pedr Howard: You delivered that. But that is still counted in a lot of ROAS. And I think passing that out has to happen. I think there's going to be a bit of a bubble that will burst in terms of how much incrementality we're claiming on these last lower funnel purchases. But that will then, you know, when these bubbles burst, it doesn't mean the end of something. It means it comes back stronger. And I think the stuff that Brad's talking about is where we'll go with much more, you know, connecting this across channels, closing the loop over much longer attribution windows and showing how we can really track those purchases and build future purchases, not just the ones that were going to happen today anyway.

25:32Brad Keeling: I mean, that's the gold in it, Brad, isn't it? It's something between ROAS and mixed market models. It's something that you can rely on a little bit more. I mean, mixed market modeling is great, but it takes time.

25:44Pedr Howard: Yeah, absolutely. I think ROAS is definitely a trap that we've seen some of our clients get in. They're seeing it as a quick return, but they're not necessarily when they look year over year saying, did we actually have more sales at Retailer X? And usually the answer is no, or it's kind of inconclusive. And so I think the more that we can start to look at a dual MMM or maybe an in-between medium-mixed model where you're able to start to look at sales on a quarterly or monthly basis to even directionally understand what your mix starts to look like is going to be super important. But looking at just pure ROAS, those folks are probably already going to buy it anyway, is not going to be the way that brands are going to continue to grow in this space.

26:34Pedr Howard: In talking to a lot of people in the brand and agency community in the buildup to this report, I heard a lot of people talking about things like the retail attacks, the cost of doing business. Some of them even jokingly calling it a bit of a shakedown that you have to give the money to these retailers in order to get the shelf space. And if we don't spend it, they'll sell people who are searching for our brand to our competitors or the smaller ones. So we almost have to play it as a defense. and I think that's a fair perspective for some of them but I think it's a that's like stage one of this and I think instead of bemoaning the fact that you have to pay it we have to think about how can we use it more creatively and how can we if we're going to have to spend those dollars on defense or to get the in-store placements how can we ensure that we're getting more for our money than just serving up the sort of generic cookie cutter ads in those environments right let's think about this as an opportunity let's get our agency strategists and creatives and point some of them towards this and say, how can we do this better?

27:34Pedr Howard: I think some of the best stuff hasn't even really been conceived yet. I think there are going to be new ways to use these channels that will come up in the next year or two where people will be like, oh, wow, okay, we linked it to that now and we sort of created this way. And that's what I mean, right? I think we're sort of, we're dealing, we're living inside the box at the moment. We need to think outside of the box in this channel a lot more.

27:55Brad Keeling: The report is Creativity Overclicks, Reclaiming Retail Media for Brand Building from Ipsos How can people get this, Petter? Is there a link there?

28:06Pedr Howard: Yeah, you can go to our website. If you search for creativity over clicks, you will get there, and you will find it very quickly. We can also put a link in some of the materials around this podcast for you.

28:16Brad Keeling: Great. And it's ipsos.com, or is that the one we're talking about? Okay. Great. Thank you guys for joining us. It's Petter Howard is president, Ipsos in the U.S., and Brad Keeling, EVP, Precision and Performance, Infinite Roar. Thanks again, guys. and we'll see everybody on the next episode.