Retail Media's Next Phase: Relevance as the Growth Engine

Transcript

Welcome and Introductions

Nate Vogel: All right, let's begin. So, Jason, I think you're gonna tee this up by giving your perspective and Constructor’s perspective, and then we'll jump right into our great panelists. Courtney and Eli, welcome. We're super excited to hear your point of view and share your perspective on retail media, which is an exciting time and space for everyone. And then, Aang, I think you'll be having that discussion, be able to do quite a bit of rapid-fire questions to both Courtney and Eli, and then team will open it up for everyone at the end to go through Q&A. So again, if you're just joining, I'm Nate Vogel, your MC moderator, host. Here's our great panelists and speakers. Everyone's looking fantastic. So, Jason and Aang from the Constructor side. Eli and Courtney, we're super excited to have you here, and thanks for taking the time to share your perspective and your experience and wisdom. And again, I'm the MC, moderator, host. So, Jason, just to warm everyone up before we jump right into content.

First Amazon purchase, or potentially last purchase online, and then, I'll let you tee it up to everyone else.

Jason Zollan: Yeah, thanks, Nate. I'm Jason Zollan, calling in from Orange County. Actually, not sunny today, so it's sunny in Seattle and a little bit cloudy in Orange County, that's kind of interesting. My last purchase online is kind of boring, so I'm gonna go with my first Amazon purchase all the way back to 2006. I bought a t-shirt for The Who. One of my favorite bands, certainly my biggest inspiration as a drummer in Keith Moon. The worst part about that is for a t-shirt, I paid $6.99 in shipping, and that's total BS. Look how far we've come with Amazon. So, good times, good icebreaker. Aang, I'll kick it over to you.

Ang Chaudhuri: Sounds good, thanks, Jason. Hey everyone, Ang Chaudhuri here, Retail Media Strategy Lead, as Nate mentioned, at Constructor, calling in from Toronto, Canada. I'll say my last purchase was a little bit boring, to be honest, too. A phone charger, which I desperately needed while I was on vacation, so I had that shipped over ASAP. With that, I'll kick it over to Eli.

Eli Gurock: Hey guys, I'm Eli Gurock, based here in Denver. I'm a retail media consultant. I help both retailers and technology companies work with retailers a little bit better, build retail media opportunities. I actually took a look at my Amazon account. And I was able to scroll back to 2000, which is when my first purchase was. And I was still in college at the time, and so my first purchase was a bunch of books for a course I was taking. I'm gonna throw it over to… who hasn't gone yet? Courtney?

Courtney Rosebush: Yeah, for sure. Hi everyone, it's Courtney calling in from Toronto, Canada. I'm a Director of Retail Search, helping clients to build and execute on their retail strategies. And my last purchase from Amazon was actually a pair of Skechers, women's sneakers, to get ready for the summer.

Nate Vogel: All right, thanks everyone for going, and again, if you just joined us, we're just… just getting started here. I'm Nate Vogel, MC moderator, host. And we were gonna, so we've just been sharing a little perspective on… what, first Amazon purchase, or potentially last purchase, but Jason, I think we're gonna tee it up with you. And you'll share a little bit of your perspective from the retail media landscape, and then we'll turn it over to Aang and Courtney and Eli to jump into some questions. And for the audience members, we'll capture all your questions here at the end. So, Jason, I'll turn it over to you.

Retail Media at an Inflection Point

Jason Zollan: Yeah, thanks, Nate. I would also just… one more call-out, because I… I didn't… know of this before, but if you're gonna submit a question, there's a big Q&A button in the lower right. Hit that, it'll all float in, and I'll kind of cull through those. At the end, maybe answer some of those in real time, but that's where you would do it. So, for the retail media landscape here, I just want to quickly set the table, for the conversation that we're about to have. It's not a tour of the market, we've all seen the up and to the right e-marketer charts. What I want to do, is kind of highlight, sort of the inflection point that we're standing at right now, and if we can go to the next slide, I just… I think it changes how we should be thinking about what we're doing today and the roadmaps heading into 2027. Full disclosure, I'm obviously coming at this from a Constructor point of view, as Nate said. Constructor sits at the intersection of search, product discovery, and retail media for some of the largest retailers in the world, so I certainly have a unique vantage point, but, you know, the panel's got plenty of other vantage points to kind of fill in those gaps. So… Let's start with the obvious. So… We can go to the next slide, but retail media is one of the great business stories of the last decade by a ton of projections talking about those e-marketer charts. We're looking at $90 billion plus in the next 18 months, call it.

And the operating margins on that are gigantic. We're talking 70-80% in some cases versus, you know, normal retail margins, and it's on traffic that retailers have already paid to acquire, so there's literally never been a more profitable channel that retailers have owned outright, and yet. When you talk to some of the people who are running these retail media networks, and we talk to a lot of them, they're not sitting there saying, you know what, cool, we cracked the case, we're good to go, we figured it out. Brands are getting more sophisticated in terms of some of the things that they're looking for. Shoppers are getting a little bit louder in terms of ad fatigue and expectations across the site, and of course, the executive teams, especially now, are looking at profitability, EBITDA, and how they can drive more revenue, which begs the question, if retail media is winning, then why does it feel so fragile? And so, I think that the answer to that is, yeah, we've kind of reached the end of Phase 1, and the playbook that sort of got us to this point is not really the playbook that we're going to be able to use heading into Phase 2. So…

Phase 1: Proving the Retail Media Model

Let's talk a little bit about Phase 1 first, set the table there. So, Phase 1 of Retail Media, we can go to the next slide, but let's call that 2018-19 until about now, right? This was about proving the model, so you're kind of answering, or I'm sorry, asking these questions in terms of: can I stand up an ad business on top of an e-commerce site? Can I convince these brands to buy into it? And can I execute that revenue on the site? I think, check, check, check. We kind of checked all those boxes. And some of us will look at that kind of $90 billion number and just assume, well, that's just Amazon, right? But that's fair. Amazon is maybe 3 quarters of that. But what's happening underneath that, I think, is also incredibly interesting and important. We've got… over 100 retail media net… or, sorry, a number of retail media networks, 20-plus, let's call it, that are doing over $100 million in revenue from a retail media standpoint. You talk about, you know, Walmart, Target, Kroger, Instacart, some of the other big guys.

The list keeps growing, and you've got hundreds of mid-market, retailers below that that are also growing, so… Phase 1 didn't just prove the model only for Amazon, it proved that with any sort of meaningful scale, and across virtually any vertical, retail media can work, and it's proven, and that's why everybody in this room, this virtual room, is kind of thinking about standing one up. We're here to learn more about it and talk about it. But again, that playbook for Phase 1, has created some hidden debt, some taxes. You've got ads that are ignoring shopper intent, you've got the ad load creeping up. I think Amazon is showing 20-plus ads per page these days.

And you've got two different systems that are making competing decisions about every page. You've got a search engine that's populating your organic, and you've got an ad server sitting on top of that. So…

Phase 2: Maximizing Revenue per Page

Phase 2 is kind of being shaped by three forces colliding at the same time. And that's brands getting smarter, or at least demanding more from where their ad dollars are going, things like incrementality and accountability. Again, you've got the shoppers being pretty loud about their customer experience, and plenty of options in terms of where they can go to shop and leveraging those options, and you've got this race towards profitability and EBITDA, so… the retailers who are gonna win in Phase 2 aren't the ones that are just gonna show the most amount of ads, they'll be the ones that have figured out how to truly maximize the revenue per page, as it were.

And so for me, that comes down to an architecture discussion. So the next slide here is… talking about that architecture a bit, I think that… A lot of decisions… Retailers are built on decisions coming from two competing products, two competing pieces of technology, and so, again, there's this sort of combative nature of an ad server versus a search engine making competing decisions on that same page. And they're… they're not looking at the same data sets. And so, you've got one optimizing for the highest bid. Leveraging little to no context, very keyword-based, and you've got a search engine that's hopefully kind of optimizing towards purchase intent, customer clickstream data relevance, and things like that.

And they're owned by two different teams, and so they're looking at different KPIs, they are sharing, you know, no data with each other, and to the extent that they are, it's not really in real time. The ad server has no idea what the organic engine is serving, and likewise, the search engine has no idea what the ad server is about to put on the page. So, unfortunately, the shopper is the one that suffers from that. They're the one that's kind of seen those distractions every day. They do a search for whole milk, and they get an ad for yogurt just because someone was willing to pay for it. That's not a great experience. The page load time increases, you've got latency from a third-party piece of ad tech. So, all that is just, like, this quiet tax that's coming on that profitability that's so important right now, especially when it comes to media, software margins, right? 70-80%.

And at Constructor, the way that we've come to think of it is.

Why Retail Media Needs a Unified Decision Engine

You can't fix Phase 2 by instituting a better ad server. The fix here is a unified decision engine, and one that's going to be able to see both sides of the house and make that decision on what goes on the page in each slot based on the real-time intent clickstream data and the user. So.

Three Shifts for Success: Measurement, Organization, and Architecture

All that said, what needs to happen in order to make Phase 2 successful? The next slide, we're just gonna talk about 3 quick shifts here that need to happen, in my opinion at least. The first one is measurement, right? Return on ad spend is still a viable metric. It's an important metric. It should live inside of every single platform. It lives inside of ours. But it's not the only thing that we should be determining, and again, brands are starting to ask more here. Brands and agencies are not walking away from return on ad spend, but they are starting to ask deeper questions in terms of incrementality: are we just robbing Peter to pay Paul? Can we measure what happens on the impact of the organic side when we put ads on the page, and how we put ads on the page, and how can we measure that impact and talk about it in an educated way? The second thing is org structure. This has to change. The most successful RMNs that we see are the ones where, you know, merchandising and the media team are working as one. They are sharing the same dashboards, the same KPIs, and they're looking, to make decisions in a unified way together as a team.

And then the last thing is the architecture, right? This probably isn't the sexiest one, but, it's the one that kind of… determines all of the other things. Without a piece of technology that can talk to both sides on the media and the organic side, you can't have unified measurement and a clean way to measure incrementality. You can't unify teams across the org. And you certainly can't, drive towards the ultimate profitability lever that I think we all want.

Retail Media in Agentic Shopping

So all that said, the only other thing that I wanted to kind of throw out there was just more of a fun one. The next slide speaks to kind of this agentic conversation, so everything I've kind of alluded to up to this point is kind of assuming that this shopper journey is going to sort of stay the same in the future. Right? Someone comes to a site, that someone is an actual human, they're performing a query, they're clicking on something, adding it to their cart, and purchasing it, and that sort of model is already being tested, as I think all of us sort of know, right? With things like Rufus and Sparky and some of the ChatGPT integrations that are happening. You've got Visa and MasterCard and all these sort of… agentic checkouts that are coming, is really starting to make you kind of think, what happens if maybe this search bar sort of went away, right? Maybe it doesn't get to that extent, but it's certainly a question worth asking.

I don't think any of us know the answer to this today, which is why it's a little bit more fun to discuss and kind of experiment, but what I can tell you is that… we're seeing a lot of the smartest retailers just kind of go down that path, ask those questions, and kind of explore. They're thinking about, can sponsored placements be shown in an agentic kind of flow, and be done in a thoughtful way that doesn't break the user experience? Can we monetize and structure, ad product data in the same way that we monetize impression volume, and can we surface ads to agents in a meaningful way? That's… those are all good questions to have. And connect… to connect all of that, you obviously need to be built on something that's more suitable for Phase 2 versus Phase 1, and I think that's where these conversations get really fun and really experimental, and hopefully we'll have time for some of those with the panel.

So let's get to that panel. Last slide for me, I promise, but that's the table I wanted to set, and what we'll cover here today as we get to the panel and the questions there, is just kind of what keeps brand budgets in, what causes brands to pull those budgets out, and how you can encourage more in terms of, you know, taking that measurement to the next level, unifying your own teams to drive more budget. That's what we're all kind of after here. Who actually owns retail media inside of the retailer. Today, what does that look like? What should that ownership look like heading into the future? And then maybe the most fun one here is, where is retail media going from here? What's the next phase? How can we talk about that? So, with that, table set, I will pass it over to the panel and get into the questions. Appreciate it all.

Nate Vogel: Jason, well done, by the way. Thanks for sharing your perspective and point of view, and tease up the panel discussion really well. So, Aang, I think we're gonna turn it over to you, where you have lots of questions, and… can get Eli and Courtney, our experts, to share some of their thoughts.

Panel Discussion: What Keeps Brand Budgets Invested

Ang Chaudhuri: Perfect, yes, lots to dig into today. For the next phase of this discussion, we'd like to hear from our retailer and brand experts, of course, who are here with us on where retail media is heading next. We're going to be discussing 10 questions over the next 30 minutes, so, we're going to be hearing, what our customers are actually, and partners are actually saying. And our entire discussion is all around the industry news as well. So with that, Eli and Courtney, let's dig in.

Early Signals That Brands Will Pull Spend

So, Courtney, what's the earliest signal that tells you a brand is about to pull a spend from a retailer? And is ROAS softening, or is it something more structural?

Courtney Rosebush: Yeah, that's a great question. I would definitely say performance of any kind is key for brands. If they see that their ROAS is softening, or any kind of key KPI that they are using to justify their media spend. If they're not seeing the best return on their investment in the retail media network that they are investing in, that definitely opens their questions and consider… considerations into whether or not they're going to look elsewhere in terms of finding that best return. And as a result of that, that kind of lends itself to something more structural in terms of changes in their media planning or in their strategy planning. For instance, they might start to reduce their inventory commitments with a specific retail media network. They may not launch new SKUs. If they're launching new products into market, they may no longer decide to prioritize that particular retail media network.

They may not stock high-value inventory over time, and they may indicate that they're moving away from the partnership. Additionally, they may turn to their agency partners or their advertiser partners and say that, you know, we no longer want to spend on high investment initiatives such as upper funnel display advertisements or search conquesting for a particular brand or product SKU. They really want to become more lean in terms of their product investment. So in terms of performance kind of leading the way in terms of structural changes on the platform, that's definitely something that we see from an agency side as a key priority, which really intensifies, like, our desire to track and monitor performance on a relatively consistent basis to ensure that we're not seeing that softening happen, or find ways to implement barriers to prevent it. And then I would say another component that is not related to performance would be a perceived lack of innovation or tools, offered by the Retail Media Network, given there is so much competition and so many new retail networks coming very quickly, quarter by quarter. If a retail network is not perceived to, like, being on the cutting edge of, like, new innovations, like AI or LLMs, that really does lend itself to clients wondering if it's the best investment for them going forward.

Ang Chaudhuri: Got it. So, early signals are showing up in spend behavior well before the brands actually pull back. Super interesting.

Beyond ROAS: Incrementality and Relevance

As a follow-up, are your clients asking for incrementality and relevance quality alongside ROAS? And what does that actually look like in an RFP today?

Courtney Rosebush: Oh, absolutely. Incrementality is definitely playing a strong role. It's definitely one of the buzzwords clients use with us when they're pitching for new business, or when they're even looking for new investments for the… to grow their brand. From experience, this is translated into a couple of, different avenues. One is, you know, the need for more bespoke, calculated metrics. Like iROAS, applied to, traditional ROAS, so incrementality, the ability to really measure that, has become incredibly, important for a lot of brands to ensure that the investment that they are, implementing into these networks is bearing fruit either in the short term, but more likely in the long term.

There's definitely been a language shift, on RFPs, when clients are requesting proposals or drafting up briefs, around requiring net new clients or finding ways to reduce, wasted ad spend. There's really a need to tighten the purse strings, so to speak, in terms of ensuring that the dollars being invested into a retail network are working for the brand themselves. Clients are really highlighting in their briefs that they want the most out of their investment. Like, if they're not seeing performance in their key metrics, then it can potentially be a non-starter or a conversation around reallocating investment in other areas. And then there's also a push for agencies or even advertiser partners to design and test based on the investment. So they really want to see innovation, and they really want to see, more bespoke experiment frameworks or measurement frameworks, baking in things like conversion lift or geolift into specific product activations, so that they can really see how far their brand dollars are going.

Ang Chaudhuri: Really interesting to hear how, those metrics you just mentioned are actually coming up in RFPs today. It sounds like brands are factoring in the cost of incrementality, the cost of visibility. Which actually feels like a great segue into evaluating our discussion on relevance and revenue together.

How Relevance Protects Revenue

I'll pivot to Eli. Eli, how do you make the case internally that relevance protects revenue, not just experience?

Eli Gurock: Yeah, it's a critical question, and it does, add a little bit of flavor to what Courtney was talking about, because I think when you talk to, advertisers around what does the spend look like, what do we need to do to get more spend, the conversation that, you know, Courtney has is all about incrementality and direct response, which is sort of the flip side of the coin to talking about product revenue, right? Because ultimately, the goal here is not ad performance in a vacuum, but ad performance that contributes to overall product sales increases, right? And there's a direct line between product revenue in customer experience, and in the middle of that line, there is relevancy, right? I think, Jason, you mentioned this earlier in your presentation, that the ideal scenario for, you know, the customer is… you put a… product that's in their head into the search bar, and they… the retailer returns just a single product. And that single product is the perfect example of what they're looking for. It's the right price, it's gonna arrive on time, it's the right size, the right color, and fulfills all the requirements that the customer has.

The reality is that it's unlikely to happen this year, or next year, or with the tools that are currently out there in the market. Hopefully there's a technology provider out there who can you know, dig into someone's head and get that really perfect product out there. But without that, you know, relevancy is the connecting tissue between product revenue and, you know, improved ad experience. Every retailer knows that, and every retailer is trying to solve for this a little bit differently. But internally, what you need to do is really make the case that if we improve relevancy and add relevancy at the same time, yes, it'll improve experience, but it'll improve experience in the way that we'll see more products being sold.

Right? And I think that's the key piece here that everybody's trying to get to. How do we prove that that's the case? Right? As Courtney was mentioning, iROAS is one of the ways you can do that. You know, campaign testing is another way that you can do that. And I think that's where the industry as a whole is heading to. Is, you know, in the last couple years, advertisers have said, hey, I've got this pool of money, I'm happy to use it for advertising through retail media networks, right? We're now in the place where it says, okay, how is this working? Is this working? And how do we prove that it's working in the way that we want it to? And relevancy is one of those back-of-the-envelope numbers that can tell you, are we doing this or not?

But it's… it's the goal, it's not the testing mechanism. And to Courtney's point, I think the way that you get there is through testing. And I think one of the other ways that you can get there is through real campaignization of the product set. Right? Making sure that you understand these are the… this is the subset of products that I want to advertise against. I'm going to measure against it based on my initial goals. Relevancy is really going to tell us, are we headed in the right direction? Are we doing right by our products? But ultimately, it's gonna be product revenue that's going to be the answer to the question.

Ang Chaudhuri: Excellent point. Centering the discussion around product. Relevancy is extremely important.

What Good Looks Like for Brands in 2026

So what does good look like for a brand in 2026, in your opinion? What numbers have to hold for brands to keep leaning in?

Courtney Rosebush: Yeah, that's a great question. Performance and key KPIs definitely have to hold water, either year over year or quarter over quarter for good to be considered by a brand. Performance, as I mentioned, is so key with all brands. Like, if they don't perceive performance to be good, they begin to ask questions. I would say, too, there's also a greater focus on infrastructure. A lot of brands perceive that the more invested they are across different retail media networks, the better it is, especially if they are advertising on products that can be sold across multiple retail media networks. That does open itself up sometimes to issues whereby brands will try to benchmark performance from different retailers against each other, like, you know, comparing performance from Amazon to Walmart to Loblaws, and it… It can sometimes be very tricky from an advertiser or agency perspective to kind of set an educational standard whereby we are educating clients to say we cannot benchmark against retail media networks, because each one is basically its own ecosystem, its own methodology in terms of recording performance. So that in and of itself is something that we've seen as a trend among brands, but we kind of have to educate them not to really think along those lines.

Additionally, if platforms are introducing new tools, I spoke about innovation a little bit earlier, just with the ever-changing nature of retail media, if a brand or a retail media network can show that they're being basically, up-to-date with everything that's going on, if they're coming to brands with, like, you know, new ideas, new formats, or new tests that they can do, brands are more likely to lean in and perceive that the network is really working towards their goals, and really showing a strong return on investment. And finally, I would say operational logistics has become a really key priority. Some of the retail media networks are a little shaky in terms of being able to deliver, real-time data, or just ensuring that they're working correctly on the day-to-day, and a lot of them have, like, more of a managed-service approach to retail media, so that can sometimes lend itself to a few more hurdles in terms of ensuring that we are coming together, and we are ensuring that performance is correct, and we can make decisions based on what we are seeing from a performance perspective. So anything in regards to, like, you know, out-of-stock hurdles or paid traffic landing on dead product detail pages, leads to wasted ad spend, so that is something that, you know, brands are really keen about, and a good experience is essentially ensuring that, you know, we have seamless integration, and ensuring that, the retail media network is consistently on, consistently, working towards the brand's objectives.

Ang Chaudhuri: Thank you, Courtney. Great discussion so far.

Who Should Own Retail Media?

Let's now shift gears into a discussion around the actual ownership of retail media. Eli, would love to hear from you on this one. Help us solve this issue, that we've seen often in the industry. Who should own retail media across marketing, e-commerce, and merchandising? And who ends up actually owning it in practice?

Eli Gurock: Yeah, that's a… that's… I hate the word should in that question, because the word should implies that there's an ideal way of doing things that works for everybody, and the reality is that's just not the case. I think the downside of our industry is retailers are absolutely massive organizations. Right? Even the small retailers are absolutely massive organizations. And so I think when you look at the should. There's usually an easy answer there. But when you think about it from, well, you know, who are the leaders who have the knowledge that are going to drive this program? Which are the departments that are focused on innovation that are required?

For an RMN to really produce what they need to produce. Which department has the media savvy, and the ad ops capabilities and martech, and data science, and all those things? You start pulling your hair, I mean, that's kind of why I don't have any hair, because I've pulled my hair out for years trying to answer that should part of your question. And so I think it's because of retail media… running a retail media network. Requires so many different and varied skill sets that you see the fragmentation in the industry that we do, right? I can tell you from my own personal experience, I've rolled up to brand marketing, integrated marketing, martech, handful of other departments and shift around all the time, because the should part of your question is really kind of squirrely. I think the better way that I like to answer this question is, how do we create aligned and shared goals Almost so that your question doesn't really matter.

Right? Ultimately, again, like I said before, product revenue should be your goal. Right? If you're not driving product sales, if you're not aligning with your merchant team and their priorities, then you're off in left field, and you're not going to get the collaboration you're going to want from your advertisers and your vendors. And so that's where I always default to, is the more you can cozy up to that merchant team. The better off your RMN is going to be. That being said, the closer you are to your merchant team, the further away you are from your Martech, your e-com, or your IT team, which is the necessary pieces to get this stuff moving. And so, I think that's why you do see a lot of RMNs shift internally within the retailer. They might start with you know, being in a subset of IT or digital or e-com, but then move further away from that as they mature, because once you've got those pieces in place, you don't need to be as close to those teams.

Right? You can then be close to your performance team who are running the media, or your MarTech team that's going to be running your ad tech, or even your merchant team whose priorities you should be taking into account and you should be driving. And so, it's a complicated question. And again, in my mind, there is no should. It's really a matter of how are you structured, what are your goals, what are your shared goals, how are you working with the other departments within your infrastructure to be able to drive it forward.

Ang Chaudhuri: Completely fair. I would say a thorough audit of your retail organization is definitely not to be underestimated. But then I would also love to link this back to unifying merchandising and media, too.

Aligning Merchandising and Media

And dig in a little bit further. So, Eli, how would you align the merchant who's actually protecting organic revenue, organic relevance, with the media lead who might be chasing CPM growth?

Eli Gurock: Yeah, I mean, to me, that's the opposite of a hard question, that's the easiest question possible. If you are running an RMN and you are chasing CPM growth. Then, you're chasing the wrong metric. Right? Again, the perspective should be that you are driving product sales. And along the way, these other KPIs are going to be super, super important. But if your goal, candidly, is how do I drive CPM growth, how do I get more funding through the network, but you're also not saying, well, how do I drive more product sales? Then your network is going to be topsy-turvy, and your advertisers are ultimately going to be unhappy. Right? And so… the goal shouldn't be organic relevance either, it should be overall relevance. The customer could care less about organic versus paid relevance, and, oh, this ad is here for X, Y, and Z reasons, but it doesn't make sense for what I'm looking to purchase, right?

Overall relevance has to be the centering of your network, and if it's not, again, you're gonna have a topsy-turvy network where people are unhappy. Right? And so, in short, the media lead, they need to align their perspective, how to add value for the advertisers through the concept of driving more product sales. That's gotta be, gotta be the way. And from a leadership perspective, the way that you do that is you need to make sure that everybody within your teams all have aligned goals, and everybody's headed in the same direction. Right? The way that I tend to do this is by a true campaignization of the ad sales products, where it starts with the merchant team before you even talk to the advertisers, to say, what's important to these advertisers or these brands? What are the new products that they're launching? What are the things that are super important? What does seasonality look like? What are they, you know, what are they doing in their own markets? You collect that information. You then work with the advertisers and brands to figure out, how do we make this stuff come alive? And then you engage your media lead to say, okay, here's what their goals are, here's what budgets they have to work with, here's, you know, the timeframe that we're gonna need to implement it. Build up to the right media plan overall that'll accomplish your goals as well as theirs.

And in my experience, that's a better way to do it, and that's the way that we make everybody happy. And once you make everybody happy, you do see the product sales, and you see that ad spend grow.

Ang Chaudhuri: Super interesting. Thanks, Eli. And especially for the framework, too. Courtney, would love for you to weigh in on this question as well. Are you seeing better long-term performance on networks where merchant media are unified, and does that change how brands are planning their annual budgets?

Courtney Rosebush: Absolutely. I would say that for specific verticals, they really do benefit from that unification. Grocery, for instance, definitely benefits from this approach, especially when, you know, they launch new products. Because we can basically time, like, you know, off-site, on-site social media activation, which can create a more unified, touchpoint for the consumer. Like, they basically start to see that project across multiple touchpoints, and that really kind of introduces them, to the brand's, new activations. It also really does create opportunities for better measurement frameworks. As I mentioned earlier, like, you know, more bespoke, more tailored measurement frameworks are really becoming important to clients. They're baking it into their RFPs, so the ability to create greater attribution through more touchpoints, both offline and online, through this unification of merchant media can help add to that analysis, and can really help brands gain more richer insights into how their brand is performing, or how a specific activation or product is performing.

It also provides, you know, more automated guardrails, so that we're preventing ad waste. In a more unified structure, we can kind of see, like, you know, where each piece is kind of playing its part. Because we can see where live inventory data is communicating directly with, the ad server. So, you know, if certain items go out of stock, if they're hero items or high-priority items to a specific brand, the retail media network can basically work in terms of pausing specific ad media, to ensure that we are not, you know, wasting dollars on a product that is temporarily out of stock. So, in a way, it really does provide, like, a more connected ecosystem where everyone is kind of communicating in tandem versus a more traditional siloed structure, where we may have to talk to, like, you know, 5 or 10 different counterparts, and everyone's getting information at different times, which can lead to lost time and wasted spend. So, it really does help kind of, like, have those unique touchpoints to ensure a more seamless activation and a more seamless method of communication. And I would say, finally, from a budgeting perspective, I know I talk a lot about, like, you know, ad spend, ensuring that we're seeing the most out of our investments, but we’ve seen budgets that exist in more of a legacy silo, where multiple stakeholders own certain pieces of the purse, move to a more integrated, fluid pacing model so that, you know, we can essentially follow… the money follows the performance if we're seeing things perform better, like, off-site in terms of… activation versus any kind of on-site, activation, we have that capability to kind of move the money along, to build on that performance that we're seeing versus in a traditionally more siloed structure. That might require, like, a lot of different phone calls and conversations in regards to how to split the investment, so I would definitely say that, you know, that unification piece has become more prominent with brands, and something that, you know, we're continuing to educate brands on as well, given that, you know, in the next 12 to 24 months, we're likely to start seeing more of that unification needed for greater brand activations.

Ang Chaudhuri: Got it. Really interesting to hear how unified networks are reshaping budget planning.

The Operational Friction Networks Underestimate

Last one for me on this topic, Courtney. Across the retailers or RMNs you work with, what's the one thing networks consistently underestimate, in your opinion, as they're trying to scale?

Courtney Rosebush: That's a great question. I would say operational friction is something that I think gets underestimated a lot, in terms of the day-to-day experience, either by advertisers, even brands that actively manage their own media. If a network is, like, you know, slow, painful to operate, requires a lot of manual intervention, it really does act as a deterrent for brands, as well as agency partners who are, like, you know, looking at, you know, a client's budget annually and trying to recommend where these dollars should be allocated per network. If there's any kind of perception around, like, you know, this platform is difficult to manage, or we can't really scale accordingly, it usually ends up in a lower investment or a lower priority, by the brand. So I think that's something that is coming along.

I would say that we've seen certain retail networks make leaps and bounds in terms of improving upon their operational performance and the way that people interact with their networks, but I also think that there is still work to be done for certain networks where they're still trying to catch up. I would say a secondary component to this as well is just reporting lags and attribution windows, given that most networks have, like, sometimes a 14-day or even a 28-day attribution window. It really can hamper scale, because clients are never quite sure exactly the final total of their revenue, or their ROAS, or even their new-to-brand sales, because it's consistently being refreshed. So, for high-velocity segments, like grocery, again, going back to that example, they really do require close, real-time data as much as possible, and given the fact that we're sometimes hampered by these limitations, it can sometimes lend itself to a bit of frustration and capability of scale, just because we're constantly refreshing and going back to the data, to ensure that we're seeing the most up-to-date, performance as possible.

Ang Chaudhuri: Great, thank you so much.

Where Retail Media Is Heading Next

So now we'll actually move into our last phase of our discussion, where we'll be chatting about where retail media is heading next. Eli, you can kick us off here. Where do you think retail media looks meaningfully different 12 months… 12 months from now? And what's the change that you think most retailers aren't planning for?

Eli Gurock: Yeah, you know… I've been asked this question, you know, whatever, dozens of times over my career, maybe hundreds. I only have gotten it right once. And so, the new answer to this question is I… honestly, I got no idea. Especially this market, it changes so fast that, I like to sit back and just watch. And I love to see what is happening and, you know, read tea leaves and talk to my friends around the industry to see what's happening. I do think that there's a really strong push right now. You know, focusing on the shopper, and by extension of that, the audience targeting, the development of those audiences, as well as, you know, being able to cultivate the right audience.

That's my kind of, that's always been the center of the campaigns that I've run, and so it's really fascinating for me to see the rest of the industry sort of catch up to that, because I think if you could service the customer Properly, and engage them in the way that they want to shop, everybody else is going to see success with those campaigns. Right? And so I think what we're seeing is that you can really make the audience the central aspect that you're building your entire campaign around. This is where you're going to, A, find the relevancy that's so vitally important, and you're going to truly, intentionally create campaigns who are serving ads, they're seeing proper impact, and you're going to have that relevancy drive the performance. And so, it's not, you know, the most… technology-savvy answer for your question around, like, oh, it's gonna be LLMs, or AI, or… or, you know, some of this fancy stuff. I think it's just the basics of who are we talking to, and why are we talking to these people?

And once we can answer those questions properly, we'll see that the ad performance is going along with it, and I think more and more retailers and brands are starting to understand how vitally important the audience piece of things is. Right? I also look to answer these questions with a view towards, you know, what's our post-blank scenario? Right? Like, a lot of these questions of where are we going is, okay, where are we right now, and what comes next? Right? And so I like to answer these questions with, well, where are we today, and what does this post-blank scenario look like? And so, in that way, I think a lot of the RMNs over the last year or two have been really pushing for national dollars.

And so, in my head, I'm framing your question as, you know, what does a post-national dollar pursuit look like? Right? Because for the last couple years, that's what we've been hearing tons. We need to hire salespeople who can focus on national dollars. We have to create reporting and technology tools that can target these national dollars, and these are… these national dollars are gonna unlock X, Y, and Z, and are gonna, you know, return us to the, hockey stick-like, sales trends that we, you know, saw in the beginning, and we want to get back to. And while that's not necessarily wrong to target those national dollars, I think it's a little bit of a misunderstanding of what's driving retail media, which is, again, product sales. That's what I've been saying this all time, right? And so I think the post-national dollar pursuit era is going to be a refocus on how are we driving real demand for these products, again, through that customer lens.

And so I think that's what we're going to see a lot of next, is different ways where we can really focus on the audience and the product sales. Like I mentioned earlier as well, as you evolve your strategy and you mature in your strategy, it's going to become more of a unified campaignization of the campaign, right? Taking everything into account and really focused on those singular campaign goals. So I think that's where we're really headed from a more tactical perspective, is understanding not just, hey, how do we pull in more dollars, but how do we create more campaigns around these products so they can sell more, and then we'll get the more dollars.

Ang Chaudhuri: Thank you. Love that grounded approach.

Monetizing AI-Led Product Discovery

We do have to address, the AI-led discovery that we're seeing in the industry, though, naturally speaking, so… Courtney, I'll pose this one to you. As, of course, we're seeing this in the market, how do brands, in your opinion, want to tackle this or monetize to show up inside those experiences without it feeling forced?

Courtney Rosebush: Yeah, that's a great question. I think, given that AI is such the hot-button topic at the moment, a lot of brands are starting to consider it in more of a higher priority. I would say that, first and foremost, they really want to have hyper-personalized content. It's not… one ad for everybody anymore, it's multiple ads for different personas and potential customers. So, they're really looking to start shifting towards crafting a more unique experience. Whereby products are being seamlessly recommended, to potential consumers based on user prompts, like whether or not they're injecting a keyword into a specific retail network, or if they're chatting with, like, you know, AI, bots like Sparky or Rufus, it's really ensuring that the brand is front and fore… foremost based on what the user is looking for. There's such a large push because of this, for stronger SEO or even AEO optimization, so that brands are accounting for both the organic experience on the network.

As well as the brand's product detail page, and its eligibility to serve on these AI platforms. It's becoming that brands have to consider that, you know, their primary shopper or their main consumer is no longer just a person, you know, sitting at home on their computer looking for a product of their choice. It's these AI bots that are crawling and scraping their product detail pages for information to use within these LLMs. So that, you know, we really need to consider, like, you know, how that's going to kind of bake into the customer experience, because it's essentially, we're… serving the AI in some respects, rather than an individual customer.

There's also, I would argue, you know, a shift happening, from an advertising perspective between just, you know, strictly promotional content, like, you know, a brand launches a new product, they start their advertising campaigns, to get people interested and to hopefully, like, you know, lead to a purchase. With brands positioning themselves more as problem solvers. Like, you know, I mentioned at the start of the webinar that I had recently bought a pair of Skechers women's sneakers to start the summer. You know, weather's getting better here in Toronto, I spend a lot of time outside, but I was also looking for, like, you know, better, shoes to wear, that would really fit for, like, you know, long-distance walking, or even long-distance running, and going to use, like, you know, Rufus and Sparky to understand, like, you know, my product options.

Really helped to kind of position myself more as, like, you know, a problem-solver consumer versus just, I want to buy a new pair of shoes online. So, this kind of leads more to, like, you know, long-tail conversational nature of shopping versus just, you know, women's shoes. Good deals, for instance. So, you know, this idea that brands have to transition more towards a nuanced or a more contextually relevant user experience, is gonna help, you know, connect people more firmly with brands, but also show them as being more relevant to a consumer's needs, because when we need something, when we go to the internet to buy, we're going for a specific purpose, and I think brands are really starting to move towards that reality of them needing to position themselves as hyper-relevant and hyper-personalized as a result.

Ang Chaudhuri: Perfect. Thank you so much, really appreciate that perspective, and really thank you both for those valuable insights. That kind of brings us towards the end of our panel discussion. I'll now actually pass it on back to Nate, our moderator, to close.

Audience Q&A

Nate Vogel: Yeah, and thanks so much, and Courtney and Eli, thanks for sharing your wisdom and perspective and the future of retail media excellence, so… We have, just a few minutes, so we'll give everyone a chance. So, to the attendees, if you want to ask any questions, and Jason and I can kind of monitor it. And see if anyone wants to type in your questions in the Q&A pod. You go down to the bottom right of your screen, you'll be able to see that. In the meantime, Jason, as we wait for a question or two, we can think about summarizing and giving any recommendations or thoughts here? As we close things up.

Comparing Performance Across Retail Media Networks

Jason Zollan: Courtney, I mean, Eli, obviously, feel free to answer this, but Courtney, you… talked about, let me make sure I get this… you were speaking about, Trying to have brands avoid, comparing the performance across the different retail media networks. Can you just say a little bit more about this? Is… is there an ideal number of retail media networks to work with? And if one is drastically outperforming the other, would you still avoid sort of putting all… allocating all budget to a single one? Like, what are the thoughts there?

Courtney Rosebush: Yeah, that's a great question. I would say that when I mentioned about clients kind of benchmarking performance. If they're invested in, like, let's just say, 5 different retail networks, all kind of managing the same product, there could sometimes be comparison, for instance, if their Amazon ROAS is $15 versus their Walmart is $6, then it becomes a question of. Should we invest more money into Amazon, or is there something that Amazon is specifically doing that's better than Walmart, for instance, especially if we're comparing the same product details? I would say… on the whole, it's a very nuanced question in terms of how brands want to, like, you know, take that performance and move it forward. Sometimes we, as advertisers, we have to kind of understand what is driving that $15 ROAS, for instance, if it's just strictly on performance, or if it has something to do with, you know, the amount of volume or customers, like, coming to Amazon versus Walmart, the amount of offline activation that we might be doing with each brand as well, to kind of understand if anything is kind of artificially inflating, one ROAS over another. I would say that clients on the whole, usually have specific priorities in terms of which advertisers they want to show up in. Like, if they're saying that Amazon's kind of, like, their bread and butter, they want to be invested in that particular network more than any other, that can sometimes, like, lend itself to kind of that inflation. So, it kind of goes back to what I mentioned around clients kind of making the mistake of benchmarking their performance against the networks.

What we have tried to educate clients to do is essentially, you know, have one ideal ROAS goal, like, let's say we have, like, a benchmark of we want to hit like, a $10 ROAS in a given… quarter, we then can work towards that across all networks versus trying to benchmark them against each other. That kind of lends itself to a little bit more of a streamlined performance, and then we can also see, if these… networks are able to kind of hit that specific goal, and if the answer is yes, and then some, like, if it's overperforming on that goal, maybe we look at investing more into that if it makes sense from a scale perspective. And on the other hand, if certain brands are, you know, falling short of that goal, then maybe we look at, you know, optimization pieces to see if there's a way to kind of improve upon that performance, or… potentially look at reinvestment elsewhere if it's really kind of not driving that need.

Jason Zollan: Yeah, that makes sense. Okay, and then maybe one more, what,

Lessons Learned When Launching a Retail Media Network

Courtney, you actually mentioned earlier, operational difficulty, but what's… what's the one thing you wish you'd known before launching a retail media network or investing in one that nobody told you? I would pose that to both of you.

Courtney Rosebush: Yeah, that's a great question. I would say, standardization of data can sometimes be incredibly difficult, like understanding, you know, if clients are using, like, first-party data audiences for their media, making sure that, you know, it's being optimized and ensuring that we can benchmark all of those levers that we are pulling from an advertiser perspective into actual tangible performance. There's so… there's so much requirement for data engineering now, especially in this area of, like, AI-led discovery. it really does require us to partner with people who are beyond, like, you know, just strict advertising, like people who are involved in data analytics and marketing science to really understand, the nature of the data and to ensure that it's working towards the goal that the client has requested.

I would also say, too, that some brands that really focus more on a managed service style platform, whereby, like, you know, we invest the money, but the management of the campaigns is done by the vendors themselves. That is difficult, because it does lend itself more to, like, you know, of a middleman strategy, whereby we are requesting, like, you know, performance data and requesting optimization insights from the vendor, versus being able to kind of get our hands dirty in the platform itself. So that really does lend itself to, you know, instances of limited scalability. We don't have enough, option or freedom to kind of turn around campaigns based on specific insights.

And it also does frustrate brands, and as a result, agencies as well, because we feel like we're a bit limited in terms of what we're able to do on a very quick basis, given the fast-paced nature of retail media. So that is one thing, based on where clients want to invest, that can be a big roadblock from an agency perspective.

Jason Zollan: Yeah, that makes sense. Eli, what about you?

Eli Gurock: There's a lot I can answer this question with, but I think, mostly it's around… and it's almost like the flip side of what Courtney just said. I think the difficult thing for a retailer is to be able to service so many different types of advertisers. All at the same time, and especially if you're a retailer building your network, you need to prioritize the campaign types and the data and the infrastructure in a way that services everybody, but not specifically anybody. And I think that's the real difficult part of standing up a network, is, okay, this subset of advertisers want A, B, and C, but this other subset of advertisers want D, E, and F, and our resources are tight, and which do we prioritize, and… you know, how do we make those decisions? And Courtney, to your point, it ends up becoming a really frustrating process for everybody.

And so I think the answer to my question is, you know, when you're starting to build a network, or if you're in the, you know, the early stages, let's say the years one through five even, of really strongly understanding your roadmap, communicating it properly, and setting really fair expectations with your advertisers. Because across the board, I've never had a conversation with an advertiser where I started out saying, hey. We know you're used to advertising in maybe Google and Walmart and Amazon. Those are real sophisticated systems that have spent 15 years and have hundreds of thousands of people working on them, you know, over that course of that time.

We are not that. Here is our roadmap, here's what we can promise, and here's what we can do. Again, I've never had an advertiser say, well, we're not going to spend with you because of that. Everybody's really understanding of where retailers are in their journey. And again, as a point that I keep harping on, if you can attribute advertisement to product sales, everybody will give you that pass, because ultimately, that's their goal.

Jason Zollan: Yeah.

Closing Thoughts

That's a good… that's a good spot to close. You know, there's a tremendous opportunity here. As I said before, whether you are a $100 million plus or something more mid-market, there's a lot of opportunity. But expectations are important, like Eli just said. You shouldn't think that you're gonna go from zero to Amazon overnight, but that also shouldn't stop you from implementing this in the first place. And guess what? Putting an ad business on top of an e-commerce site is difficult, but that's why you've got agencies to help in coordinating, you've got consultants to help with Eli, and everything in between. And also the technology partners are critical, and you know, Constructor, we think that we can help in that capacity as well. But, yeah.

Really appreciate the time. Nate, I'll leave it to you for final, final closing thoughts.

Nate Vogel: You bet. Yeah, let's close out. Thanks for, joining live. If you're watching this recording, thanks for watching the recording. Courtney and Eli, thank you so much for bringing your expertise and wisdom to share on the topic of retail media. Jason and Aang, of course, sharing your perspective from the Constructor side. Exciting time in this space now, right now, so we're really appreciative of you attending. We'll send you, as you can see, if you want more details around retail media for e-commerce, we have a good e-book. And then, of course, if everyone is interested to hear more about our specifics of retail media, we can surely set you up with a more detailed demo.

Great conversation. I'm sure we'll do this again. Thanks again for your time, and everyone have a good day. Thanks so much. Thanks, Cole. Bye.