# S1 E3 History of Retail Media

S1 E3 History of Retail Media 

[00:00:00] Welcome to the middleman. This is episode three, and today I'm going to be the subject matter expert. So I'm gonna let Todd kick things off and start off the episode. Thank you, Tom. Hello everyone. So we touched on this last week in talking about, uh, identity as the root of the colossal misunderstanding. 

[00:00:23] Um, if you wanna go back and listen to our, our take on what's going on in identity and and SSP Lan and. One of the things that is really a big hot topic is the rise of retail media and its growth and, and its importance in the industry. And what we wanted to do is sort of of explain what is retail media, its roots, and where it's going over actually a couple of episodes. 

[00:00:49] And, you know, the, the, the rise retail media, as I mentioned, has its roots in identity. And with the rise of first party data as really the only [00:01:00] way you can target things. And the one thing that retailers have because you have to log in to buy something is first party data. And the other thing that they can do as part of that first party data, and they're actually the ones transacting, is they have really interesting attribution data as well. 

[00:01:12] So they know who the users are, they know what they bought. And they now have a lot of traffic. So they're really an interesting, uh, players now in, in the ad tech landscape and the online advertising landscape. And so identity and the rise of first party data targeting is really what's behind the rise of retail media and its growth, and it's gonna be an incredibly important. 

[00:01:34] Aspect, I think of online advertising now going forward, again, with the rise of first party data. So it's not necessarily a big technical thing that's driving the interest in retail media. It's the fact that they have identity you can target through them and they have traffic. Now, what's also interesting I think, for us to, to talk about is where did this come from? 

[00:01:53] Did it just happen now? Did it just show up that, you know, Eric Siford likes to talk about everything's an ad network, [00:02:00] and this is the idea of retailers as ad networks is actually not a new thing. Um, retailers have been in, in the ad game for a long time, and so they've thought of themselves as an ad network probably for about a hundred years. 

[00:02:14] Not necessarily an online ad network, but, but as, as ad sellers or, you know, and and so forth for a long time. And, you know, I think what we, we have this unique opportunity to talk with Tom today because Tom has been in, in the middle of, of the online retail media game for a long time, is his ab you know, if, if myself and some others are OG ad tech guys, Tom's an OG retail media guy. 

[00:02:39] And has worked on, in, on multiple sides of this landscape, and I think can really help us understand where did this come from and how, you know, what is the history of, of online retail media and, and how did we get here today? And, you know, I think, Tom, we can talk about really, I think it's the, the beginnings of your career really step into it almost on, on day one if, if I remember correctly.[00:03:00]  

[00:03:00] Yeah, no, I, I, uh, I got into this, you know, very early when I, I lived and worked in China. Um, I started to work for Unilever. And you know, I thought I sort of was missing Web 1.0 when you were doing it and uh, it was basically because there was next to zero tech, um, especially in China at the time, um, in the grocery world. 

[00:03:22] But I think where it's funny for me, and we'll, we'll go through some of the history of it. Um, I always hear about retail media talked about today and, you know, it's very narrowly focused on either sponsored search or, you know, just sort of like what's been happening in the last year or two. And I think the reason that we do this podcast is to try to slow things down. 

[00:03:43] So we are really gonna slow it down today. We're gonna go back a hundred years and then we're gonna fast forward, uh, and, and try to explain sort of the offline ad network or whatever it was that we were talking about, like the, literally what was happening on the shelves and in the aisles. I. Um, and then, you know, stitch [00:04:00] together the identity and show where it's going. 

[00:04:03] Um, so I think the way to do this is to go all the way back to when you think about the quaint classic first grocery stores in your neighborhood. You know, the, the friendly neighborhood grocer I. Um, those shop owners, you know, he would talk to you, you walk in, uh, his son would go and grab all the items for you. 

[00:04:22] You had a store tab, you would walk home with the groceries. Um, that model changed and there's a great book called The Secret Life of Groceries that everybody should read, at least the first third about. Um, they get into all sorts of really interesting things, but one in particular that I thought was really helpful to understand how. 

[00:04:42] Retail media or, and, you know, really had its origins is to think about, um, how when we move from this sort of neighborhood grocery store to a world where people start to have cars, they can carry more, uh, home, [00:05:00] they can go further. Um, there was a, a chain that still exists and it was called Paley Wiggly, and they moved the grocery store out of the city into the suburbs because they wanted lower taxes. 

[00:05:12] But they want to be able to make the stores bigger. Because they had this crazy idea that, uh, instead of the grocer getting all the goods for you, the piggy little shopper that you are, you could wiggle your butt around the store on your own and get the goods yourself. And so, yeah. So I think what's interesting about that, um, and I went to college in, in North Carolina, so I've seen piggy Wigglys and had no idea that they were really the, the, the rise of the modern supermarket. 

[00:05:37] Yep. And you know, I think we all think of the supermarket as something that's been around forever. And has always been there. And, you know, we forget, it's almost like that, that the grocery world was like the little house of Prairie, you know, general store in the middle of town with the grocer who did everything for you and, and sort of gave you a basket of goods and you took it home or delivered it to you. 

[00:05:57] And versus this idea of the [00:06:00] modern supermarket as being this vast. Land of goods and, and aisles and just more skews than you can imagine. Yeah, and I think that actually that that innovation changed the way supermarkets were gonna be for the next 50 or so years, or maybe even 70 years. But it also created the need for marketers. 

[00:06:20] Um, to have, to get above, you know, get through the clutter. Um, so there was all this stuff happening where now there were categories, so it wasn't just a produce grocery store, it, there was a produce section and then there was a snack section and then, you know, and then it just kept getting bigger and bigger. 

[00:06:36] And the marketers had this challenge where they were like, I want more of my products on the shelf. I want to be able to have people notice me. And so you started to have this world where the merchant on the grocery side and the brand manager on the brand side were starting to have these fights. Um, where I. 

[00:06:55] The brand marketer wanted the grocer to buy more of their product [00:07:00] because that would mean there would be more space on the shelf for that brand. Um, and then the grocer wanted to lower the prices that their consumers would enjoy because that would mean they could win share away from the other grocers in their competitive set. 

[00:07:15] And so you started to see these, this world of trade marketing, uh, exist, which basically accounts for about half of the marketing spend, uh, that CPGs do to this day. So of a, of a 200. Billion dollar market in the US of, of, uh, of spend. But half of that is trade marketing. And so when it came to, um, you know, my world, um, you know, I came in after, you know, initially it was the retailers were actually charged literally directly charging for shelf space, so like listing fees. 

[00:07:46] So that was the initial world of like the. The retailer considering their, their shelves as, as rented real estate. Um, I jumped in, uh, a little bit later, obviously in the nineties you started to hear about category [00:08:00] management. I was in the, the early two thousands at Unilever Foods in Shanghai, so in China, and I was selling on the key accounts, and I was dropped into a world where in the nineties the Walmart had built out this model. 

[00:08:12] Where a retailer would corral the buyers into these tiny cubicles and try to beat them up and, and get the lowest price possible. Um, so they could provide everyday low prices. Um, and, you know, in that world, um, I. You know, the, the only thing that the brand had to sort of combat that was what's called category management. 

[00:08:34] So I would be out there as a trade marketer trying to sell the idea of we're gonna put a display in the aisle, um, or at the end cap. And those displays were a sort of good faith investment in, uh, in, in the store. Well, it's, it's, you know, you jumped on a term that I've heard before that the, uh, retailers. 

[00:08:55] Didn't call these bribes, they called it investment. Yes. And they weren't, it wasn't like, it wasn't [00:09:00] ad fees, but like I think every consumer would, would re would understand and people in the retail media or online ad space today totally understand that, that those end caps, those displays are really promotional and, and in effect a and an ad, right? 

[00:09:15] Like we think about a home ads and billboards, but it was like a billboard in the store effectively. And so, you know, to, to get those in the store as, as a brand, uh, manager, you would have to effectively pay for that placement as quote unquote, investment was really, you know, a form of marketing ad spend. 

[00:09:33] Right? Yeah. And I mean, to me, it's really funny because the retailer overstates, you know, the, the value of the real estate and they, they talk about it as an investment. And the brand overstates their category management goals. They're like, oh, we're creating a line extension. And, you know, instead of saying we're just, we're pushing into the snacks category, we're, you know, somebody would say, we have changed our product in from a fish shaped, uh, craveable, uh. 

[00:09:58] Snack [00:10:00] into a, a cracker, into a fish steak shaped craveable snack so that we can now make potato chips out of, you know, what was a goldfish or something like that. And so like those, those, uh, you know, sort of positions or, or you know, like the, the either side of the, of the war that was going on for, for money, um, did have its own little ecosystem. 

[00:10:21] To your point about everything being an ad network for such a long time. They had the shelf space and that shelf space was determined by how much, uh, you know, if the, if the brand gave good prices to the retailer, the retailer maybe bought more. So they had larger shelf space. Um, there were retailers had their own, uh. 

[00:10:40] Uh, temporary price reductions. If they weren't like a Walmart EDLP provider, they would have weekly price reductions. Um, and so those promotions at the shelf would also be replicated in what's called the circular. So the newspaper, uh, insert that the retailers would pay the newspaper, the local newspaper for, and then also [00:11:00] direct mail to everybody in the zip code. 

[00:11:02] That was sort of the way to do offsite. So you had onsite at the shelf, uh, where there were promotions used, and then there were offsite promotions that were used to get people to come into the store. And so, you know, there was this whole, you know, complete ecosystem there all before there was any digital, uh, capabilities. 

[00:11:21] No websites, no identity and any of that stuff. Um, and, and I think that's, you know, and bringing it forward to, you know, digital comes along and e-commerce comes along, and, uh, how did the retailers start to look at that from a, if I have this trade marketing business, and, and another term I've heard is co-op, right? 

[00:11:42] I had cooperative advertising. Yeah. And, and I've always had to give rebates, um, to rebates or ad spend or what have you. This is a pretty common concept in a lot of industries where I have to. Invest in marketing programs, you know, with my, uh, partners, my channel partners, my retailers, et cetera. And I've heard this number thrown [00:12:00] around. 

[00:12:00] You know, most, uh, retailers are asking for 1% of their, of their buy back is, you know, trade marketing, coop, advertising, what have you. And I think. That might be something. Is that a term or an amount that you're familiar with? Yeah. Marketing, shopper market, marketing co-op. All of those things are, are basically getting at the same thing, but from different sides of it. 

[00:12:18] And, uh, yeah, the, the retailer is looking to get an investment in how many, a percentage of the sales that's coming from the brand for that retailer. So. A lot of the, the ask was always something like, can we get 1% of your sales, uh, invested back in, uh, as, uh, a way to, you know, sort of keep that brand top of mind. 

[00:12:44] Um, and I think that there is a sort of belief on both sides that there is a value in doing that to some extent. Um, but I think that, you know, that's where the fight comes in about how much, and, you know, and as we get into, uh, more of this or whatever, did we actually [00:13:00] get to 1%? Hell no. But, uh, there is definitely, uh, you know, there's, there's, there are lofty goals, uh, from the retailers today on, on where retail media should be. 

[00:13:11] Um, but to get to your point. Um, how did we get into digital? Um, I think there were two paths. There was the first path you see with like Walmart, where they worked with a company called Triad. And Triad basically was the, the winner of the super 1.0 version of retail media, which was basically a digital display ad network, uh, where, you know, display ads would show up on the retailer site. 

[00:13:37] And I think that it, it took off in the sense that Walmart had a lot of traffic. Um, but there wasn't a lot of e-commerce going on at that time. So, you know, generally, you know, the, the, the weird part and the timeline here is triad emerges like in late s right? That's when it sort of, yeah. Late s like maybe 2000, 10, 12, they start to take off. 

[00:13:57] And you know, the, the challenge that the [00:14:00] retailers had, uh, you know, with, with that model was you had to click to somewhere. And so, you know, generally an ad has a click through and does that click through, go to a Kellogg's website or you know, like where is that going? Um, the retailers didn't like the idea of losing that traffic to a third party site. 

[00:14:18] So they didn't want them to go to the brand. They wanted them to stay in their system. Which, uh, was the, the other big path toward retail media came from Amazon. And Amazon starting in around 2012, 2014, they started to break out. I. Uh, how much money they were making on sponsored search or sponsored product listings. 

[00:14:38] Um, and they all of a sudden they came out of nowhere going from zero to like 14 billion a year. I think they're now up to almost 50 billion a year. And that was around the time when some of the other retailers out there started to really. Like really turn their head and say, whoa, this is an incredible amount of money that we could [00:15:00] be making. 

[00:15:00] How do we do this? Um, and that's where, and not necessarily, it wasn't necessarily how do we do this in terms of retail media? It was, was it, it's more specific to search and sponsored search. Correct. Well, I think the idea was we want some of that money. I see. You know, we want that. It's a, it was a money grab. 

[00:15:18] Um, but some of the retailers could do this, like the Walmarts and Targets, 'cause they had a lot of traffic to their.com. I. Some of the other retailers couldn't. And that's sort of where I got involved in the second phase of retail media. Um, so I was in a mobile ad company. We were starting to see some product market fit. 

[00:15:39] When location targeting was, was super easy to do from a privacy perspective. It wasn't really right. We talked, we talked about this last week in terms of the, uh, the where, where these location providers being. Yeah, super honest about. There in the beginning there was tons of GPS data floating around, and then even if there wasn't GPS, people were pretending like they had it. 

[00:15:59] Right. [00:16:00] And um, basically, you know, uh, agencies like Havas were saying to us, Hey, home Depot would like to do conquesting and get the people in the Lowes and target parking lots to come to their store. And coupons.com got wind of that saying we can do one better and add a promotion on top of that. And give people a coupon to go to that store. 

[00:16:20] And so that was around the time when CRISP got acquired. And uh, you know, we had a CEO at the time who came from Albertson, Safeway, and those retailers like Albertsons and Aha del Hayes, which owned Stop and Shop, um. Some of the dollar guys like Dollar General, uh, drug stores like Rite Aid, we started to build up retail media businesses based on the idea that coupons.com had the manufacturer's coupon business for a hundred brands. 

[00:16:51] And those CPG brands were, were basically running through their trade marketing budgets, uh, promotions to juice sales at certain [00:17:00] parts of the year. So, you know, back to school or whatever the event was. They were running coupons, but to understand the lift of sales for those coupons. Um, and this was kind of funny 'cause coupons.com was a digital company, but it was printed home coupons. 

[00:17:13] And so literally people would print out a piece of paper, bring it to the retailer, and they would scan it at the, uh, the register. So we actually had to have, uh, access to the point of sale data and we would get it batched every evening. Um, and that was great for doing measurement for these, uh, coupon campaigns. 

[00:17:31] When Chris got acquired, we were like, we can expand this to audience extension campaigns. So instead of just knowing, uh, the transactions, we would join that to the registration data from the loyalty program. So all of a sudden you now have the ability to have first party data addresses, phone numbers, emails, all that kinda stuff. 

[00:17:52] Um, and you could take two years worth of that data and try to join that up into, uh, an identity resolution partner like a [00:18:00] LiveRamp who we used. To look at people over the last, say, 90 days on the open web on publisher sites, you know, news, whatever, you know, magazines, things like that. And so we basically created, and, you know, the, the businesses, um. 

[00:18:16] Uh, you know, took off to the, to the tune of, you know, from zero to like 50, $70 million over a couple years, um, which was almost pure profit, um, uh, in audience extension minus the traffic acquisition cost of, of paying the publishers. Um, and then around that time was when the pandemic hit and those smaller retailers started to see e-commerce traffic. 

[00:18:41] Build up and that's when we started to bring, uh, sponsored search, listing revenue in, and, you know, act more like what Amazon was doing in, in that world. So to, uh, jump into the, um, the sponsored search? Yeah, because I think this, you know, as you and I have talked about this, one of the fascinating things [00:19:00] to me that kind of happen, call it in the household goods grocery space, especially with e-commerce. 

[00:19:05] And, you know, one of the things that, that, um, coming from. For, for those who aren't aware, Tom and I worked at a company called Fantastic, which is the Shopify app ecosystem. And you know, one of the things that, and it was a roll up of, of various Shopify apps and one of the areas that we were really interested in was search. 

[00:19:21] And you know, in our conversations and you know, we're saying what are the, some of the key P pieces of technology that every retailer has in searches is one of them. And you know what's interesting? As we started talking about the importance of search, you know, I was like, oh, the, these retailers, these grocers, these household good guys, they care about search from a ux, from a great. 

[00:19:39] User experience from driving conversions and you were like, to you, like, that's not what they care about. They care about nothing like that. Think about it. Yeah. And I think Ben Thompson had a really good post, uh, uh, uh, podcast with, uh, the CEO of Walmart and he talked about how, you know, their initial e-commerce launch [00:20:00] was sort of a bust because they were very store focused. 

[00:20:02] And I think that the average retailer, grocery retailers especially, were also super store focused because it's true. You know, it, at that time it was 90%. Now maybe it's like 70% of the, of the, uh, of, of the transactions were happening in store. So it really was the, the merchants, uh, are really ruled the roost and the CDO or the ux, you know, product people were kind of the lower part of the totem pole in terms of the power within those organizations. 

[00:20:31] So, you know, it wasn't really until retail media sponsored search revenue became a hot topic. Where they started to focus on search at all because they were trying to soft pedal e-commerce fees. It was very expensive for them to fulfill. Yeah, I, I think that's a a a good point about, you know, if you look at a lot of retailers, and part of their interest is retail media is, it's not e-commerce first, it's retail media first. 

[00:20:58] Which I think might be surprising [00:21:00] to a lot of people in the ad tech space where I don't think they realized. How important retail media and those dollars and those margins are because I think people, you know, most people are where the grocers and, and household good retailers like targets more household goods than groceries, even though they do sell groceries and whatever. 

[00:21:15] But they're more household goods and the low margins they have in the, um, in terms of selling goods and retail media really is the escape valve margin. And even going back, way back into the day, that 1% that they were kicking back. From a retailer was like pure profit. And so what they figured out in digital is they could really capture that, those trade marketing co-op slash dollars, those circular dollars in a digital form, and suddenly like in, in addition to the fact that e-commerce was taking off, they could replicate that same sort of margin experience that they were getting. 

[00:21:47] Offline in the physical world. Now they could do it digitally. Yeah. And the sponsored search, you don't even have tax. So you, you have, you, you don't have to pay anybody except perhaps the vendor who runs your sponsored search, auction, uh, auction. [00:22:00] How did, so now that, you know, Amazon sort of helps pioneer and make all these re the retail landscape that, oh my gosh, sponsored. 

[00:22:09] Listings is really a big business. It really could potentially be the equivalent of what my offline trade slash co-op marketing dollars are. Um, how, you know, who are the players who are doing that, because I think most people are aware. Thater, you're not aware when you, when you add a search functionality to your site, to your online store, that usually does not come with sponsored listings. 

[00:22:33] Like search is a different product than sponsored listings and so, yeah. It's a separate offering. So who are the companies that were sort of involved in helping these retailers start to develop, launch and, and take and, and start participating in retail media? Yeah, so when, when we started working on this stuff, 2019 and we You mean coupons.com now? 

[00:22:51] Yeah. Quotient com. We acquired a company, um, in the UK that had, um, you know, some traction in the UK and their, with their retailers. [00:23:00] Really, what was the name of that company you guys acquired? Acquired? It was called Elevate. Yeah, it was called Elevate. And they were working with Morrisons. And this was another funny thing. 

[00:23:09] It was, there was a retailer in the UK called Iceland, and I didn't realize that it was a British thing, but Iceland, uh, is, is a British thing on an Icelandic thing. Um, but yeah, basically they, they had this great platform that was very sort of, um. It was able to sort of work really well with the existing search provider. 

[00:23:31] So like BloomReach or, you know, whoever, whoever the retailer was using, um, for search that was, you know, either a really basic search or somebody who could do semantic search. Um, generally the idea was in the beginning when we were just trying to prove out the model, we would ask for the first, the third, the fifth slot to be sponsored. 

[00:23:52] Um, and that was really just a JavaScript implementation where it was kind of fooling the user. We would push, [00:24:00] uh, you know, whatever the, the specific search result was, uh, to the side and have something that looked exactly like a normal product card, but it would have a little sponsored flag on it. And then over time, that became an API integration. 

[00:24:13] Um, but generally the idea was, uh, you know, yeah, we were, we were working well with the existing search provider to provide. Retail media, uh, bidded, CPC, uh, product listenings to show up in the grid of products that somebody would see when they search. And the, so w was that sold as SaaS? Was that sold as managed service? 

[00:24:37] Who were some of the other players, you know, in, in, at that time? So I think the, probably the search providers had a SaaS model. We had a media model. And so the idea was, and this was actual, was it, was it on a, a tech basis or a managed service basis? So all of our stuff was managed service. And that's actually, you know, a good sort of segue into who are the players now because, um, we were a managed service [00:25:00] business and we had, um, a CPC bidding business on the sponsored search side. 

[00:25:04] And we had a flat CPM on the audience extension side, which could include mobile, it could include social, it could include digital at home. Um, and so, you know, you have this situation where. We tried to make it an easy button for our own sellers. Our own sellers were basically representing the retailer, and so the, you know, the retailer had these shopper marketers who. 

[00:25:28] Generally had been working in, you know, the physical space, uh, with, and is a shopper marketer a term that refers to people at the brand or at retailers? What's sort of the, because I've heard that term, shopper marketer and Yeah. Where did that person live and what was it and, and what did it look like? 

[00:25:44] Yeah. So the, you had that title maybe at Unilever. Yeah, so the, the retailers would have shopper marketers. Uh, they, they basically were the, they were basically managing the, the category and they would work with the brand side on their shopper teams. And, [00:26:00] you know, that was sort of how all of the promotion for volume, you know, battles would go on. 

[00:26:06] But a lot of the, what they were working on were either promotions or, or physical displays and things like that. Um, we came in and we're like, okay, yeah, this is some complex stuff you're gonna have to work with. Mobile inventory, you know, brand safety rules. You're gonna have to talk about cookies, you're gonna have to talk about the end of cookies. 

[00:26:24] It, it was kind of nuts. Um, and so our sellers were out there to help that, help them do that. Now, that model, that managed service model, over time, it was so successful. There was so much profit coming in that the next phase was to in-house and make those, uh, you know, the shopper people at the retailer, um, equipped to sell all of it. 

[00:26:47] And, you know, work with the brands or the, and actually more so with agencies, um, because as it became a bigger business now agencies wanted to get involved on the brand side. So who are some of, and I know [00:27:00] Quotient wasn't the only company selling the, you know, this managed service where you end up being the ad sales team selling these sponsored listings to the brands because the retailers didn't have these, these people. 

[00:27:10] And I know there's some other players in the space who are some of the people that Quoin competed with in that full service model? Yeah. Um, well in the full service model, um, you know, there was, there were some competitors, but I think the real winners in the space. We're, we're pure play, uh, companies. So we did everything. 

[00:27:29] We were the full ad tech stack for the retailer, and I think you see that, uh, with Epsilon. So Publicis bought Conversant and Citrus A, which basically is kind of like Quotient 2.0, but they also have their own identity capabilities. So they even include the LiveRamp part of it in their, in their capabilities, but they're still a managed service. 

[00:27:46] But the real winners I've seen, um, who've turned this into more of a platform business, you have Criteo on the sponsored search side, who's winning. Tons of sponsored search business, um, for the retailers like Albertsons and, and, and others, and [00:28:00] effectively acting like a, an ad server type product or, yeah, I mean, I think that, you know, the ads, there's not really a publisher ad server at the, at the retailer. 

[00:28:09] Um, so they're, they're sort of running these auctions and then handing the data to the, to the retailer. Um, and so that, that's an interesting sort of. Different model. And you're also seeing, you know, the IAB get involved in, in this now and trying to sort of put programmatic rules together. Uh, and so there's some interesting stuff being done there, um, to try to change that model from a sort of 1.0 to 2.0 model. 

[00:28:33] And then on the audience extension side, the big winner obviously is the trade desk. Um, who, uh, has the ability to. Uh, partner up with the retailers to have the data, but then is, is really pushing the audience extension, not just in the sort of lower funnel stuff that we were doing with mobile, but this is sort of premium, uh, publishers on the display side any and bringing CTV into it. 

[00:28:59] But you can't, [00:29:00] you can't really do that in a managed service model. The CT CTV CPMs would just be insane. Yeah. So it's interesting and, and I think there's another player who's, uh, done well in terms of the, the, call it, the ad serving tech side of that. Um, you know, friends, uh, uh, friends of, of mine, you know, James Avery at Keble has certainly built that, right? 

[00:29:18] So I think we have Criteo and Keble, um, doing well on the, helping these retailers in-house. The, the right, the tech, uh. So that they can deliver these sponsor listings and, and other forms of retail media, which could, I think people, you know, there's display, there's sponsored listings, there's lots of things that, that start to, to happen there. 

[00:29:37] And so I think in terms of the history of retail media, we've gone from, it's been offline to, it's been online and, you know, it, it, Amazon is a pure play in terms of online helps pioneer a lot and, and really maybe the idea of sponsored listings and within store a, a. The store, e-commerce site side of things, and then you have [00:30:00] players like Quotient and Epsilon show up to help the sort of, the rest of, of the retailers figure out what this business is by, you know, sort of full service, full tech model. 

[00:30:09] And then as they got more proficient, started to bring this in-house with players like Trade Desk, Criteo, Keval, et cetera. Yep. And so I think we're seeing some interesting things start to emerge in terms of. What, you know, what is this and where this, where's this going? Um, and again, we'll get into the, where, where's the market today? 

[00:30:25] And, and where do we think it's going in, in the next couple of episodes. Um, this is sort of, you know, meant to be the story of how did we get here? And, you know, I think part of that, that story that's interesting, um, to me is the, the fact it's been around for a long time. And, you know, these retailers are now beginning to build out these, the, the tech stacks and bring it in house and, and, and the people, um, behind it, you know, what, what's your, uh, perspective on, do you feel like the market is [00:31:00] mature in terms of retail media, or is it, I should say online retail media? 

[00:31:04] Really, that's, I think, an important distinction we're making here today, which is, it's been around for a hundred. Yeah, maybe a hundred years in some form or fashion. And so retail media really at, its, when you think, look at it in terms of offline, the physical store has really been around for a long time. 

[00:31:16] And so how mature do you, you know, uh, how long, uh, are we in the first inning of retail media? Is it the ninth inning of retail media? And, you know, given the history of where we're at, where, where do you think we are in terms of the historical arc of, of retail media? Yeah, I mean, this is a tough one for me because I see so many different angles on this. 

[00:31:37] Um, and I think, we'll, we'll get a chance to talk more about this as we talk where it's going, but I, I think there's, you know, we didn't talk about Instacart and the fact that Instacart was sort of taking up, uh, a lot of the retailers that couldn't run retail media on their own, they were not big enough. 

[00:31:53] And they've brought a lot of tech in and they've partnered with PubMatic to be, you know, to have an SSP, like you mentioned [00:32:00] Keval. They're actually bringing in programmatic capabilities. I think that helps the smaller retailers. First, I. Um, you're also seeing like quotient sort of was vanquished and you know, it was sold off to and is now called Neptune. 

[00:32:13] They're focused more on in-store and there's a whole focus on in-store because now store meaning physical, in-store, physical instore, but also digital in-store, there's a, you know, uh, digital outta home was a big part of. Innovation when we were quotient, uh, they doubled down on that with a company that does the, the screens and the promotions and the, and the signs that are in store. 

[00:32:33] So there's a whole world of that. Um, and you know, guys like Andrew Lipman are talking about how the fact that like, don't invest in linear tv. I. Retail media has TVs in it and you get more attention there than you would on linear TV where people are on their phones and not paying attention. So there's a lot, there's a lot that's going on there. 

[00:32:50] Um, I would say rather than going to another rabbit hole, I will tell you sort of the sad story that I have, which is I now live in Philadelphia next to what I [00:33:00] consider the heavenly version of what grocery, uh, used to be. Uh, you know, there's a, there's a company that started out of a guy named Vincent Fanzo started at, uh, uh, whole Foods as a buyer and he created, I mean, he got all these relationships with produce, uh, you know, uh, growers in the region in like New Jersey and Pennsylvania. 

[00:33:22] And he has created this, you know, what I look at as a utopia of a tiny store with a lot of. Produce and then indie brands that are sort of quality focused. Um, and, you know, I walk in there, you know, and, and bring home a bag of goods. Um, there is no identity. Um, it, but it sounds to me like I'm almost going back to, you know, pre Piggly Wiggly and, you know, I'm, I love this store, uh, much more than I do the local Acme. 

[00:33:52] And, um, and so. It's a little bit like, is the future of retail media gonna work with, you know, [00:34:00] uh, a store that creates a footprint where it's super hyper-local, small versions, you know, you see the real estate crumbling and you know, there's not a lot of reason for retail banks or whatever. Are all those places gonna turn into grocery stores? 

[00:34:12] Um. I, I would say yes. But then where's the retail media part of it? All he uses is an Instagram account and he actually, li literally has like hand drawn promotions, which have no identity connected to it. So that's why it's sad. I, I don't know what the future yet holds, but I, uh, I love this little, you know, utopia that I get to shop at. 

[00:34:30] So, yeah, I think it's, you know, the a, a key aspect of this conversation, you know, people should, should take away. And it's probably a good way to sum up and, and lay the seeds for the next couple of weeks. You walk away with this knowing that retail media has been around for a long time in some form or fashion, that even in digital it's been around for a decade plus and that it would be, uh, it, it isn't this new, new, new thing. 

[00:34:55] It's, it's maturing. Especially if you look at Amazon and Walmart's numbers, the [00:35:00] sponsors listings, which is really the driver of this business to walk away knowing that sponsored search is probably the 80% of, of what this is, um, is generating billions of dollars revenue for the largest retailers. And, you know, the shoulder and midsection and tail of the retailers are starting to invest in this market and realize they need to play too. 

[00:35:16] What they're, we'll get into, I think, what they're doing or not doing, um, in, in the weeks ahead. And that, you know, we're gonna be seeing things even in the past as technology enabled business models that used to exist a hundred years ago before the rise of the supermarket. And so I think there's a lot of interesting, um, sort of business. 

[00:35:36] It, it impacts of what's happening and, and why and how. And then obviously the rise of privacy and what's really given a real nice wind to retail media in terms of how the fact that retailers have an incredible amount of first party data really makes it interesting in terms of, of players and opening up the space beyond, let's say, Amazon. 

[00:35:57] And Walmart for players to, to [00:36:00] offer services and advertising and things more like what the publisher landscape maybe looked 10, 15 years ago, where suddenly what I don't think we realized in the, in, like in the grocery space, especially when you look at regional grocers, there's dozens and dozens and dozens, a couple hundred, you know, retailers or grocers out there. 

[00:36:15] And so it starts to look more and more like open web publishers where there's gonna be this. S you know, large ones and medium sized ones and small ones. And we're gonna have to figure out how to probably work with all of them at some way, way, shape or form. You mentioned Instacart, 'cause it acts as kind of a, this delivery service for a lot of smaller retailers, um, especially, and so they offer pieces of this and, and potentially dollars in this space to some of the retailers. 

[00:36:39] So I think, you know, that sort of hopefully sums up the conversation. In terms of some of the takeaways here for, for the folks paying, uh, watching this and, and listening to this, and so stay tuned where we get into, where's the market now and, and who are some of the technology players. And one thing we mentioned, some of them like what, you know, what is Criteo's offering, what is Kell's offering? 

[00:36:56] What are some of the other offerings in the space? I. What is, you know, who are the [00:37:00] search tech players and what does that look like? You mentioned, um, uh, I think it was BloomReach or BloomReach, um, Tom is an example of, of one. And then we can get to where is this all going and, and what does this look like, you know, in five or or 10 years. 

[00:37:13] And I, I think there's some interesting conversations to have that. So I think that gives us a good, you know, stopping point for today. And, you know, let people know what we're gonna talk about in the future. Uh, it, I think retail media is one of the mo more interesting areas of, of online advertising 'cause it is a huge growth area. 

[00:37:29] And the technologies that we used on the publisher side, I. Really start to, to, to become technologies that retailers are gonna have to look at. And they're gonna have to look and talk more like publishers, which is again, we'll talk about. So I think that's, you know, kind of where this starts to go and, and starts to be interesting as well. 

[00:37:44] And so, you know, I think with that we can say, you know, till next week, uh, and hopefully we see everyone back. And thanks for listening. And Tom, any closing words from yourself? No, thanks for listening. I mean, we're, we're very excited to, to keep this discussion going. So, um, if you have [00:38:00] comments or you know, questions of things that we didn't cover about retail media, let us know. 

[00:38:04] But we've got a lot more to talk about. So we'll see you next week. Great. So to close it up, uh, as we said at the beginning, um, if you appreciate this, you know, like subscribe, uh, tune in and tune in next week for the next episodes. Thank you for listening. All right. See you later, Todd. See you later. Tom.