# S1 E10 - Xavier Facon - NielsenIQ

Episode 10 - Xavier Facon - NielsenIQ 

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[00:00:05] Elgato Wave Neo-24: welcome to the middlemen. I'm Tom Limongello, and I'm here with Todd Sawicki. We, as middlemen, live at the intersection of media and e commerce, and we would like for you to join us in our discussions where we turn that chaotic intersection into your comfort zone 

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[00:01:03] Tom: Thank you for joining the middlemen, Xavier Facon. You are now global SVP of Retail Products at Nielsen IQ. Before we get into what Nielsen IQ is, and what you're doing now I wanted to get something outta the way. You are originally from Belgium. What's it like being somebody, from that part of Europe who spent all their career in tech in the U S 

[00:01:26] xavier-facon: Yeah, I went to school in Belgium. I went to college. And after that, to get into the tech economy, there were fewer places than now to go to talking about the late nineties could go to New York or you could go to San Francisco Bay Area to get into what they call new media. 

[00:01:43] xavier-facon: And I took the closest spot and then start with entrepreneurship there. And obviously you can hear it on my accent, but that's the wonderful thing about the U S. All kinds of people with backgrounds come together, have funny ways of talking as it's [00:02:00] Australian or if it's, French or whatever, and we get we get accepted, right? 

[00:02:04] xavier-facon: And so I've been always very much accepted into that economy. And I had tons of fun, right? US is a creative, positive thinking country, regardless all the challenges it has. It really drives innovation that way. I love it. 

[00:02:21] Tom: Last episode, we were talking about how Europe has this sort of advantage on the consumer behavior specific to retail. So in a lot of other things, Europe's really behind, but. With Albert Heijn in Holland and they had the handheld machines for people to check out , why is it that Europe has been so far ahead on retail side of things? 

[00:02:42] xavier-facon: There's so many good reasons but let me start by saying that having that perspective that I did a lot of my shopping in Europe before I moved to this role at NIQ and retail in North America. It was very much welcomed, right? So the US is advanced in [00:03:00] other ways, but just understanding for instance as a very young person, I was already like almost an extreme couponer, right? 

[00:03:08] xavier-facon: Like getting the most out of your money in a grocery store and, doing that. And I think the economical side of things, as far as how shoppers behave. Trying to be as efficient as possible also is something that the retailers have. They want to be as efficient as possible in terms of staffing, human resources and technology drives that, right? 

[00:03:29] xavier-facon: Obviously you get through a store with your self scanner quicker than if you stand in line in a retailer in the U S. So it comes from that frugal, Efficient, cost saving mentality and the understanding that, you're not buying anything you and everything you want in the store in Europe. 

[00:03:48] xavier-facon: You buy what you can afford, right?  

[00:03:51] Tom: I don't think I ever put two and two together. We worked together at crisp and then we were acquired by what was coupons. com. So yeah, you were the guy to lead that [00:04:00] because you understood that I think probably better than any of us New Yorkers who were not using coupons. 

[00:04:06] xavier-facon: mentality that a retailer would say. I'm going to work with the shopper. I'm going to make it shopper centric and I'm going to try to make it in a way where they see the value, the benefit of me as a banner, as a retailer versus another. It drives a lot of, shopper centric behavior. What can we do to make them shop better, get more value and so forth. 

[00:04:29] xavier-facon: Then if you add that whole e com and, a media slash advertising space on top of it. Continuing to keep that in mind, it will drive a lot of innovation. And I see retailers in Europe doing that very well, right? They're focusing on understanding their shopper, using a loyalty program that, many shoppers use, 80%. 

[00:04:51] xavier-facon: Of the time, meaning that , the buy cycles of shoppers, they understand when they're going to need what and they can play into that when it comes to [00:05:00] introducing products to them or to giving them value or promos or things like that. It's less mass. It's more shopper centric. In Europe, there's a lot of fragmentation. 

[00:05:10] xavier-facon: So that's also where it comes from. But if you have the scale, Of north america where a retailer most of our retailers we typically talk about They're, 20 30 billion dollar retailers. At least they're huge They're more mass. There's volume. There's, their website has a lot of visitors. 

[00:05:27] xavier-facon: There's their scale there they don't need to do things in a very personalized way always because and they sometimes do sometimes they don't but , it often doesn't benefit them economically , to be too personalized. I think in in Europe and other countries like it other continents like it, they need to be more careful in that relationship with the shopper. 

[00:05:46] xavier-facon: They're more shopper centric. 

[00:05:49] Tom: Let's maybe take a step back on this because I think when we worked together, it was all about let's implement something like product, listing ads. You're actually now using data [00:06:00] to move the atoms in the store rather than the bits online, you're actually affecting the merchandising plans . So tell us a little bit about that. 

[00:06:09] xavier-facon: Yeah, it's whole store, right? It's online and in store, of course. So Nielsen IQ is the part of the old Nielsen company. AC Arthur, founder of Nielsen, became AC Nielsen. And then you had Nielsen being both a media business as well as a data company. About five years ago, they split. There was a, there's still a Nielsen media company, and then there is the Nielsen IQ, which is the data company. 

[00:06:35] xavier-facon: That's the bigger part of the company. That's about 35, 40, 000 people, having all the data in the world active in about 110 countries, collecting the shopper behavior, but also collecting the in-store prices collecting all the point of sale data in aggregated or even in granular forms. 

[00:06:53] xavier-facon: And out of that, they understand the shopper and they understand things like market share. And that data is [00:07:00] then used in hundreds of products that they sell. So they can sell the data itself, but what they're making their business of is putting analytics on that data and then selling those as analytics products. 

[00:07:12] xavier-facon: And there's a specific division around retail where retailers get. value back for the data that they give us, right? So they share important transaction data with us and shopper data, and they get back a lot of analytic services. And some of the things that they are even doing are they're paying in cash for like Activate, which is that platform that that my team recently introduced into the markets. 

[00:07:37] xavier-facon: So we'll talk about that more, but again, I just want to make sure that you understand. Nielsen IQ is a company that retailers and their manufacturers, their suppliers absolutely need to be able to do business with each other. They're the operating system between how retailers figure out, things like assortment or things like optimized pricing or, what works, what [00:08:00] doesn't. 

[00:08:00] xavier-facon: And then, the suppliers feed a lot of strategy and new product information to the retailers through that, platform as well. So they understand how to truly coordinate and optimize. 

[00:08:12] Tom: you said something in there that made me shudder. We've been talking a lot about how retailers are basically publishers now, and they have to think like that. . And the idea of a retailer or a publisher paying for something it just sounds crazy to me. 

[00:08:24] Todd: So once you start selling ads in your publisher, in our world, coming from the publisher. Perspective and pub tech. and what you have with publisher margins and what they look like. At it versus retailers are rich. And so therefore you never have been able to spend on infrastructure, in publishing.  

[00:08:40] Todd: And that's the thing, is a lot of startups come knocking my door in for advice I'm always if you're going to charge a publisher you're dead on arrival, publishers get paid, they don't pay. So if you think. Almost all publishers. And the one thing that publishers paid for is ad serving. And there's nothing else that they pay for.  

[00:08:58] Todd: It's like the [00:09:00] ad serving, it's like a credit card, transaction fee. You want to accept credit cards, you have to pay for them. And so you pay the interchange fee, the visa or MasterCard clearing for your American express, in the U S. And that's ad serving for publishers. And beyond that,  

[00:09:13] Todd: They don't pay for anything. They get paid.  

[00:09:16] Todd: And I think that's one of the interesting things about retail and retail. Media is retail. Media is a high margin activity. Whereas for publishers, traditionally, everything they do is a low margin. And so I think that's one of the things that changes, I think a little bit for retailers versus traditional content publishers, they move and act like publishers. Is there gonna have advantage over traditional publishers in the race for ad dollars because they have margins around retail media that allow them to invest in products and data. Whereas publisher's never had that.  

[00:09:43] Todd: I think the other thing that's interesting here about retail media versus traditional content media and publishers is you two were talking about data. And it's really interesting data to an advertiser that the underlying transaction data and profile data and preference data that users or customers share with retailers, especially with loyalty [00:10:00] programs. Publishers don't have a lot of interesting data users are reading articles and I read something or I read something about what's going on in the election or it's something about the latest celebrity. What have you. And. That's not what sells products. And whereas retailers have the data that sells products. So the reason for third-party ecosystem of data is because that data doesn't. It wasn't valuable.  

[00:10:25] Todd: They needed to enhance it. And with retailers it's already there. And so maybe with deprecation of cookies, it's not such a big deal.  

[00:10:32] Todd: We're fundamentally shifting the whole, ecosystem. And you two are just talking about in terms of like category data and purchase data and profile data. And if you're a traditional publisher, you're not going to have any of that. And so getting back to the cookie third party cookie ecosystem, and that took off the first place. Third party ecosystem was all about data enhancement, which in retail media, you don't need, it's all there already. Really fascinating changes. 

[00:10:54] xavier-facon: . So companies like an NIQ are that place where you collaborate on data. So [00:11:00] retailer being in in a position of a data owner, right? And we put a ton of analytics on that. And that's the first kind of situation where brands pay retailers. 

[00:11:11] xavier-facon: In a scenario where the retailers have a bit of a forcing factor of asking the brands to really do that around topics like supply chain health, assortment optimization, around, customer insights also merchant analytics topics that they can use as point solutions internally at the retailer, but they can also then take the KPIs out of it. 

[00:11:31] xavier-facon: And share it back and say, look, how do we solve these challenges so you can easily see if there's all sorts of activation happening against that insight and data around price changes or promos that they run. It's a small leap to say now we should also do some retail media as an opportunity to reach a specific objective that, that retailer has in their business, for instance, to grow a category of products driven by specific brands. 

[00:11:59] xavier-facon: They think [00:12:00] would be the best brands to grow that category. So a lot of retail media spend or advertising dollars from brands is invited in to the retailer through these intelligence platforms. In order to reach the right objectives, which benefit both the retailer and the brands, not just the brands and that is truly collaboration and retail media has become a little bit part of that. 

[00:12:22] xavier-facon: So what I'm doing with my products, I'm guiding those retailers, those marketing departments of retailers on that journey of being initially a publisher into being something completely different, a retailer who happens to sell media, which is different, right? Because they need to think with that hat of; what are the right objectives to sell? How does this benefit me as a retailer in terms of growing my business and competing against another retailer? And how do I leverage marketing dollars that brands have? towards driving their sales up as well without hurting me in a category or hurting me in any other way. 

[00:12:59] xavier-facon: [00:13:00] There's a lot more intelligence to it than a brand just buying media so they can get exposure and sell more. The retailer doesn't want to do that in a way where it hurts their business overall. E commerce is a very important aspect of that, a part of that, but, I've identified a dozen additional media channels which are not necessarily online and are not necessarily CPC to, drive the retailers over your overall media portfolio, their media kit. 

[00:13:32] xavier-facon: And in the most extreme case, there was a retailer , in Turkey. Who does live shows in front of one of their hyper stores, so it drives shoppers in store through live music. That's media. There's banners up there, whatever. Then you have all the digital out of home screens around the stores. You have the screens in the stores. 

[00:13:52] xavier-facon: You have, on shelf digital engagement devices, which show the price but can do more than that. You have these [00:14:00] self scanners that you can put media on. You have, radio, I can go through all the different media channels you already know, but they are applicable to retail media and they fit somewhere into that, channel optimization, I would say to reach a specific objective from on one side, awareness all the way to quick conversion and so forth. 

[00:14:21] Todd: What's interesting not having com. From retail. I come from publishing the contents out of the equation. is whenever Tom has a chance to talk with someone like yourself. And some other colleagues I've seen you guys get, start, jump right in to talking through the language of retail.  

[00:14:36] Todd: And it's just interesting how fundamentally different it is from ad tech from content publishing. When you guys talk about category and you talk about shelf space, you're talking about the vendor retail relationship and their understanding, and you can see why there's this quotient retail media ecosystem. Because you have to understand the language of retailers and how they work with brands in terms of, things like category assortment. And you're talking about shelf space and you're talking about all the things that are a [00:15:00] language.  

[00:15:00] Todd: It just. That. never comes up in the content world. I think something interesting is . Retail media sales. Takeoff is going to be through the lens of retail much so than the lens of content. And that's  

[00:15:08] Todd: to me fascinating.  

[00:15:09] Todd: When you think about. it. The language of data and the  

[00:15:12] Todd: brands than they're used to getting from the retail side is very different than what marketers might have been doing on the brand awareness side from the campaigns and content promotions. They're just not getting the same thing. So I think. That's an important lesson here into why we're seeing this Quotient sales mafia across the retail media, ecosystem is because the understand the language retail.  

[00:15:31] Todd: And it's not so much about the language of media. And it's about, can we pick up the language of retail?  

[00:15:36] xavier-facon: I always was in a position of CTO or technology leader, not even product for most of my career. It was involved in optimizing the bits and bytes and figuring out how to make, Ad tech more efficient and lower cost to operate and things like that. And about the time in Quotient, one of the things that I started realizing is that we're doing too much optimization on those sites. 

[00:15:58] xavier-facon: The bigger picture is being [00:16:00] lost, right? Ultimately, what is the value exchange? Why should brands pay the same to a retailer than they would pay to, say, a Facebook or Google? No, they should pay a lot more because they're not just buying the media, they're also buying the relationship plus the data and the intelligence. 

[00:16:17] xavier-facon: And they're getting a ton of valuable insights back. If you had to generate this alone after a campaign, it would cost a fortune. So the media rates can comfortably be a lot higher. When you're doing retail media and you need to justify that, you also need to work towards that. So , my conclusion now is, and especially now it's, Gen AI being more mature and so forth. 

[00:16:39] xavier-facon: I truly believe that everything that needs to be invented on the technical side, to be the most advanced or the most sophisticated retail media network is already invented. You don't, as a startup, don't need to build more technology at this point. What you do need to do is figure out how all these different inventions fit together into the [00:17:00] most innovative business. 

[00:17:01] xavier-facon: How do you optimize that as a business that can run specific plays out of a playbook that have a very reliable ROI that is easily demonstrated that has a good, win attitude between retailer and advertiser too much right now is about, the media buyer feeling that they're being overcharged or the retailer thinks they're taxing, and they, that's the way to do it and they're sending letters, and there's an ask, or the advertiser saying this is the wrong media rate, and so forth. 

[00:17:30] xavier-facon: That relationship doesn't sit right. Not because the technology doesn't exist and the products aren't great, it's because that innovation of how to actually work together isn't being explored quite sufficiently, right?  

[00:17:43] Tom: So that's an area where I'd really love to hear your perspective now, because back at quotient, Everything was about the joint business plan between the retailer and the brand. But the talk tracks from. the companies who've come after quotient. all seem to be. Moving in the direction [00:18:00] of opening it up to programmatic.  

[00:18:01] Tom: So whether it's the trade desk. or Critio, and especially Kevil  

[00:18:05] Tom: I wonder if the JBP.  

[00:18:07] Tom: were just. Those were just training wheels. Before we got to a programmatic world, or if the retailer really is in the driver's seat and retail media is the way forward. Does the JBP become even more important and we see that relationship between the retail and the brand basically dictating all the media planning. 

[00:18:28] xavier-facon: So it depends on the region, right? And it depends on which country, which retailer and what their position is in that space. There's certainly retailers that I can think of who we'll say. What's being discussed at the JBP and that model as far as high level strategic planning and so forth? 

[00:18:47] xavier-facon: We don't want it, we don't want to bring all the insights to that meeting because look, we are a market leader in our country. If we ask the advertisers to buy inventory of from us, like we are a publisher. They'll do it [00:19:00] and we can sell it all. And that's it. That's yeah. But there are about 635 retail media networks in the world that I've counted. 

[00:19:07] Todd: 635. Oh my goodness. I guess the problem is use the term. Hey network. It's one of my rants recently, which is they're not networks, they're single publishers. They're single sites. Th there, there are. So maybe they should be called something else. There has to be better label for them.  

[00:19:23] Todd: Something other than network would be better. 

[00:19:25] xavier-facon: They call it a network they often they're actually part of , a broader data monetization business that runs relatively independent from the owner, which is the retailer. So they can apply this big investment and technology to potential other retailers in their market, and then it can start becoming a network. 

[00:19:44] xavier-facon: But look, I've talked to about 120 retail media businesses of any kind. In the last few years partly selling our products, but also partly just being interested in how they're thinking about their business, what are they trying to [00:20:00] say to the market? And in many cases, it is first an insights business. 

[00:20:06] xavier-facon: It is data insights, which they can't monetize sufficiently. So what they're doing is they're going to operate media and sell media. And if you are spending enough money on media, you'll get the insights. Otherwise, you can't get access to it. So the culture of sharing insights by a retailer to the brands is different in every country. 

[00:20:27] xavier-facon: In some countries, it doesn't happen at all. Don't want to tell them what's going on. They will figure things out, and they will use it in competing with me at another retailer-- I don't want to share anything. That culture is definitely there. And then there are places where it got more sophisticated, where they're saying, I will share insights, but they need to make it worth it to me. 

[00:20:45] xavier-facon: It needs to add to my alternative profit, right? There's like a rule of thumb for every 1 billion in annual sales at the retailer, you can monetize your data at a certain level. And it can make actually a [00:21:00] significant difference in your profit margin. 

[00:21:02] xavier-facon: So that's where it starts. And then they add media to it to make the whole deal even better. And also a bit as a gatekeeper to not give the insights to too many brands that shouldn't get it in their mind. So if you think about it, what kind of media is the most interesting to give them? As part of those insights, monetization and data monetization, it is very shopper centric media. It is media that says, I'm going to treat a very specific audience with these channels of media to accomplish this specific sales goal. Yeah, very performance oriented, but also very personalized to specific audience segments in which they don't perform that well, right? 

[00:21:42] Tom: So yeah, that was the thing that got dropped. And I think that's a big part of what you're doing. Tell us more about where you think personalization is today, because I think, when you don't have enough scale on your retailer. com, if you want to call it that it's hard to do personalization. 

[00:21:57] Tom: It doesn't make sense. Doing personalization offsite, it's a little more [00:22:00] challenging, but it can be done. Tell us a little bit about where that is today. 

[00:22:04] xavier-facon: The primary touch point between the shopper and the retailer where personalization makes a huge difference is when in the mobile app or via email or in some kind of very personalized way, they share an offer bank, a limited bank of very specific offers today, just for you. This is a way to, achieve a whole bunch of specific objectives that can clearly show ROI. 

[00:22:30] xavier-facon: It is less used in a scenario where you're saying, I'm just going to personalize the entire user experience of everything you're doing on the website or on the app. There the costs are higher and the ROI is lower. It's a very targeted way and personalizing emails is huge. 

[00:22:46] xavier-facon: Because that's, showing that you truly understand that shopper, and you can put things in there that definitely going to drive a trip or something else. 

[00:22:53] Tom: It's how people actually use their devices. Email is a big part of their day and, offsite media may [00:23:00] not be as big. 

[00:23:01] xavier-facon: let me step back for that, because I know sometimes you guys like to take, get into a little bit more of the technical side of things. What essentially is happening is that all data the retailer has, all feeds from events, from promos, from their loyalty program, from their point of sale, both online and in store, it all gets processed daily. 

[00:23:20] xavier-facon: Attributes are generated using predictive analytics, right? Machine learning. It creates, thousands of attributes for each shopper that gets stored in an in-memory database. And then that's available via API or via, the internal infrastructure of the platform to any type of analytic application, but also any type of activation function. 

[00:23:41] xavier-facon: You want to know, how loyal a certain shopper is on a very specific product category. And if that shopper is loyal for a certain amount of time or for longer, and have they shifted from this or that, those are very specific insights. Just to give one example. That gets recorded at the very [00:24:00] granular level and it's saved and it's updated every night. 

[00:24:02] xavier-facon: So the moment you have kids or the moment it's back to school, these parameters start changing significantly in real time. And then that is, the basis for advanced analytics. All of that is driven by it, but personalization requires as well. If you look at the retailer's approach, they'll completely decompose all the sales drivers in the business. 

[00:24:27] xavier-facon: So what changed in the shopper's behavior based on price or based on marketing messages on based on, promo events or based on a stock availability or based on regional differences that have shifted or whatever it can be, or macroeconomic things as well. It all gets decomposed, is then used to create a personalized model of how is this person expected to behave in the future.  

[00:24:53] Todd: I think that's interesting in terms of something different from traditional publishing versus retail media. To your point about the data [00:25:00] and its depth. And that is something that is not all what you traditionally see in the publishing side. And the publishing side. It's funny. If you look at any profile. That has been created of you and for some advertised system, and it's often laughable how wrong it is or how dated it is.  

[00:25:13] Todd: Maybe the and as we look at that, maybe this is one of the areas where Google cannot be as good as retailer because of that data and that recency and systems like E Google can't touch. That at all. And, Google really lacks it, lacks specific purchase data, and it lacks the history there.  

[00:25:28] Todd: And retailers have this interesting opportunity in front of them around this data and using it to drive decisioning and add systems. And I think that's one of the things that's fascinating here is how it's coalescing around performance media, but in a very different and potentially more interesting. Way longterm, because of what you're talking about in terms of the richness and the systems behind the data and how it can be used up to the point of the transaction it's really fascinating to me how this data plays so different with retail versus with a traditional publishing.  

[00:25:56] xavier-facon: Yeah. And all in a way that it's that it benefits the [00:26:00] shopper, it benefits the retailer and it benefits the brands, the manufacturers. In many scenarios, the algorithm has written in a way where it benefits one party because that's the view of that product. It's a demand side product wants to optimize for the brand, but having it optimized for all makes it sustainable and grow over time. 

[00:26:19] xavier-facon: You don't have the, crazy kind of, cycles that you can see sometimes with big brands doing something with someone and pulling back dollars when they think it doesn't work and put it back in when they feel their competitor is doing more than they do and so forth. To have this be always on sustainable and beneficial to the shopper, you gotta have algorithms that keep all parties in mind, right? 

[00:26:43] xavier-facon: And that's something that I don't see Google doing, unfortunately, right? But the retailer, knowing that it's the long game they're playing, they will try to benefit all these parties. 

[00:26:54] Tom: Yeah, one last question I had for you is, as you start to talk about all parties, being [00:27:00] involved and it's a sustainable model I definitely have seen the case where, midsize brands big brands, that, , have billions in sales can't really invest at the level they can't put up the table stakes that the P&Gs and Unilever's of the world can do. 

[00:27:15] Tom: Where do you see that going? Who's going to be the best at bringing those smaller brands into this game? 

[00:27:21] xavier-facon: Yeah, the convergence of budgets is a topic we also talked about that at Quotient a lot, right? Which is there's the trade dollars and then there's specific e commerce budget and maybe there's, shopper marketing budget. And, this is like the world of where the retailer gets its media budget from when he talks about retail media. 

[00:27:39] xavier-facon: That is challenging because that is a zero operation at the end of the game. These are Shifting around between different tactics that the retailer offers. The key thing to do is to bring true, new budget, new created budget from the agencies, media budget into that retail media network. 

[00:27:56] xavier-facon: And for that, there's one thing that [00:28:00] these midsize brands, Are waiting on which is a reliable way to tell does it work or not a reliable way. They might already get a accurate read from a retailer that does a good job looking at closing the loop between the shopper's activity via the loyalty program and then what they were exposed to but does a brand think that's completely reliable given it 's the retailer that gives you that signal, right? 

[00:28:28] xavier-facon: That R. O. A. S. If you want to call it that. I think those brands will ultimately spend a lot more and true media budget. If there's more independent measurement happening off all media including retail media and commerce media and measurement that is always on that doesn't come eight weeks after the campaign is done like some retailers had to do because it's manual or, do it with the methodology that, can cover any size campaign can cover, situations [00:29:00] where the campaign is fragmented across channels or not. 

[00:29:03] xavier-facon: It's very hard problem to solve. Because from a technical perspective, understanding who's exposed to a campaign will happen differently based on what kind of media format you use, it's already different between things within the trade desk, but the trade desk is only a little piece of a lot of it. 

[00:29:20] xavier-facon: So that has to be solved. And I wanted to, take the opportunity, of course, to say that I'm thinking about this, right? So I have a lot of those features. I need to build it together in one product that can be offered to the manufacturer side to the industry side. So it's not the retailer only having a read on it, but it's , an independent company that can say, here's the gold standard of measuring media. 

[00:29:44] xavier-facon: And then those dollars will come because at that point, you've done better than Google and meta at that point, you've done it with, higher quality data and, more rigor. And that has to happen for all those manufacturers and brands to say it works better. So I'm going to put [00:30:00] actual dollars there. 

[00:30:00] xavier-facon: Not just the dollars I already was going to spend with the retailer anyway. 

[00:30:04] Todd: I think that's interesting point about the dollars getting spent, because one of the things that has come up with our conversation with people, other brands and so forth, Feeling that they're getting pressured by the retails to spend more on retail media. And part is the retailers have sold their investors, their boards. And we can get 1% of sales.  

[00:30:18] Todd: And they're struggling at this 0.5% to 0.25%. And they haven't gotten to the 1% of GMV other than let's say Amazon Walmart. And I think it's interesting because you're touching on these challenges. Which is they need to get more of their vendors into this pipeline. They need to convince them to move dollars out of traditional advertising budgets into retail, media budgets, and they haven't necessarily been as good at that.  

[00:30:41] Todd: I think. Th that gets the selling the flip side of that, which is they do need some traditional ad sellers who understand how to sell those other budgets. If they want to get that extra half percent or extra three quarters of a percent of GMV and to retail me. And I think it's interesting point that you're bringing up.  

[00:30:57] Todd: That's helping it. That's helping us figure [00:31:00] out the answer. And I think the question of why retail media is not, is as explosive or it's. It's certainly exploded in a lot of ways, right? There's 600 plus retail media networks. What have you, as you said, every retailer thinks this is something they should be doing great, but when they get into it, in terms of catching those dollars, there's still a lot of work to do. 

[00:31:17] xavier-facon: I would say most of them only get the dollars that they would have gotten anyway . There's one thing that would help retailers get more dollars as well. And that is if the brands thought that the media often co branded that they do with that retailer has a strong halo effect. 

[00:31:33] xavier-facon: In the market itself so that they can say, Yeah, it's a retailer, but it's a very large retailer. And with the halo, it's almost I should almost read it like a national campaign. That is ultimately what, larger retailers like Amazon are already able to do. But that's also something you can only do if you have market share data and Nielsen IQ is there. 

[00:31:53] xavier-facon: We're playing that space already, right? So large media companies actually contract Nielsen to measure the media [00:32:00] and Nielsen IQ as well. In order to give a read, not just on the retailer's own data, but on the market as a whole, very important aspects to start spending that non retailer specific dollars. 

[00:32:13] Todd: I think that's going to be interesting to watch and you look at Walmart. Walmart. Acquiring Vizio and Roku getting mentioned as somebody who might be getting acquired by a large retailer because of. How do I get that halo? That you were talking about, and they'll look at video and video channels as part of what people look at and you look at Amazon's investment in prime video, as part of what's driving the video formats and that's they work well.  

[00:32:37] Todd: And they work well, obviously for that hailo, I think that's part of how do you make an impact?  

[00:32:41] Todd: I think what are the hidden opportunities and going back to why Europe is different and Europe is more interesting and other regions have done more in store with digital display type opportunities. I wonder you can start seeing something like we look, sorry. Look at Costco's announcement. And are we, and what they're starting to roll out. And Walmart is starting to put a digital displays in [00:33:00] aisles in the us and what we see these sort of environments that help drive innovation and help push some of that innovation.  

[00:33:05] Todd: So I think. , Tom has talked about this interest in moving into in-store and creating media opportunities in store and how maybe that's one of the levers that helps capture. , dollars  

[00:33:16] xavier-facon: If you want to build a successful retail media business, Hire people with retail and analytics knowledge hire true media people, some from agencies, some from the supplier side and cross train them. So they understand from each other how to look at things out of their little box, they'll build better products. 

[00:33:35] xavier-facon: They'll talk and communicate in a very different way and ultimately create that confidence that can start that sustainable growth because we have some big retail media Businesses in the US but their growth rate obviously has slowed significantly and it's all these issues that create that friction Which is easily solvable, I think 

[00:33:55] Todd: I think experience will solve a lot of these wounds. And what was like to ask this too, when [00:34:00] you look at the retail media landscape and they could be your customers, obviously, and who do you think is really doing a good job?  

[00:34:05] xavier-facon: So little biased because I talked a lot about Shopper centricity is very important as the red, thread through my entire career around personalization and support companies that have a highly adopted loyalty program, but also the clubs like Sam's club and so forth. They obviously have decided to go data driven. 

[00:34:26] xavier-facon: There are companies like  

[00:34:27] xavier-facon: Co-op in switzerland a big conglomerate that's in many european countries very sophisticated because they really invest in that loyalty program in that personalization and then they tie that to retail media in latin america you have like OXXO Which is second largest retailer there in in Korea, you have Lotte mart. 

[00:34:46] xavier-facon: It's a hyper mart. They have started investing in collaboration at the level that really easily extends into the retail media and through collaboration, they find opportunities to invest more.  

[00:34:58] xavier-facon: These are all [00:35:00] retailers with tremendous investment in AI in tech, but they're investing once and they're using it for all different activities within the retailer. 

[00:35:09] xavier-facon: So it's one of the things that is the biggest thing that I think consultants do wrong when they go into retailers to set it up. They start calling tech companies and the data that the retailer has to be copied in another environment. Maybe it's the Adobe Experience Cloud or it's something else from Salesforce or whatever. 

[00:35:28] xavier-facon: And ultimately the retailer ends up with four or five versions of their data and they don't even agree with each other anymore because they're cleaned up differently, they're filtered differently. No, there should be one consolidated way to manage technology. Do it with all those use cases in mind and then you can easily connect your collaboration with your personalization and with your Retail media. 

[00:35:51] xavier-facon: I think that's the way to do it. That culture is there then to say we have one source of truth and we're going to do what's right and that's sustainable. And then that [00:36:00] credibility takes you into higher media rates and more profit at the end of the day. 

[00:36:04] Tom: That's great. And, I'm happy that you got us out of our little U S box and starting to think about some of the retail experiences that exist elsewhere. So I want to thank you Xavier for taking the time to talk with us today.  

[00:36:17] xavier-facon: Thank you very much. Thank you for having me. 

[00:36:19]  

[00:36:25] Tom-Outro: Okay, we've had some time to think about it. I think that was a great chat with Xavier and as usual with Xavier, he's saying a lot more than you think he is  

[00:36:34] todd-sawicki_1_07-25-2024_162906: he was saying a lot the whole time.  

[00:36:36] Tom-Outro: Yeah, no, you have to read a lot into it because, at least for me, If you go back to our days at quotient, I think some of the things that are still a friction with the whole setup is that the business model back then was let's try to monetize the audience for the retailer and let's get as much money as we can for the retailer and it cut the [00:37:00] publishers out and it was all about, it was really very focused on the largest brands. 

[00:37:05] Tom-Outro: And I think what he was talking about today was more about you need to have an always on solution. You need to have a solution that is less connected to one specific channel. It has to be, yes, it's, something that's connected to digital channels, but a lot of what he's doing today Is about optimizing the assortment in store for some of the largest brands, for some of them, for any of the brands really. I think there's a lot of friction still in the system because at the end of the day, the business model is. A joint business plan between a brand and a retailer. And that hasn't really changed. 

[00:37:41] todd-sawicki_1_07-25-2024_162906: What's fascinating when I listen to you talk with other brands or retailers, and when we talk, we're talking about brands, we're talking to people from like the product side, selling and working with retail is how different the language and operating norms [00:38:00] Are for retailers and their suppliers. 

[00:38:04] todd-sawicki_1_07-25-2024_162906: It's just, it's not ad tech. It's not a media publishing world. And that every time I listen to you talk to someone you worked with, that just is reinforced. And I think that happened, again, in this conversation. And especially at the beginning where it's good for me to listen. And I think that's one of the things that comes out of these conversations is that there's, you mentioned joint business proposal, the JBP as you, the three other acronym that you'd like to throw around and others is, 

[00:38:37] Tom-Outro: Yeah. That says for the audience, the joint business plan is this time at the beginning of the year, and it's updated quarterly where an understanding of the budget that the brand is going to spend or the promotional budget that the brand is going to give away to the retailer to place the product in store in the merchandising [00:39:00] plans that they're going to make, that is the initial thing. 

[00:39:02] Tom-Outro: And I think retail media has become this sort of additional part of that because it provides measurement. And so that, that's what we're talking about. 

[00:39:12] todd-sawicki_1_07-25-2024_162906: and. The other thing along those lines that came up in the conversation was there are a lot more systems and there's a lot more infrastructure outside of ad tech. And I think one of the things, that when I talk with ad tech people, maybe it's a cockiness or whatever, it's we know everything. 

[00:39:31] todd-sawicki_1_07-25-2024_162906: What's clear is as much as we think we know best when it comes to retail and retail media, I'm not sure that's the case. And I think, it was surprising to talk about, systems and record system records of truth and our sources of truth, and so you're, what systems that represent sales and what systems represent those. 

[00:39:50] todd-sawicki_1_07-25-2024_162906: And, I think there's an interesting discussion that we had with talking about how. It's getting messed up now. As retailers are just bolting [00:40:00] on ad tech to their systems, and it's create, it's really starting to create some interesting challenges. I think looking ahead as retailers try to reconcile these different systems and products. 

[00:40:12] todd-sawicki_1_07-25-2024_162906: And so I think that to me was one of the more interesting things is I hadn't actually thought about when do they update their transactions and when do they update their systems? And is this something where do we really understand how they think about it? Merchandising and assortment. And so I think, you and he had some interesting conversations. 

[00:40:29] todd-sawicki_1_07-25-2024_162906: I think you've got some interesting perspective on that issue. 

[00:40:32] Tom-Outro: Yeah, he was basically pleading you need to cross train people. You need to allow these people to understand the other side of it because it 

[00:40:39] todd-sawicki_1_07-25-2024_162906: And by cross training, he means like the traditional retail, like business analysts and the new ad tech. 

[00:40:45] Tom-Outro: Yeah. 

[00:40:46] todd-sawicki_1_07-25-2024_162906: into retail to build 

[00:40:47] Tom-Outro: ad ops people that, all of those people need to cross train and understand how it impacts. And I think, we didn't get into real like case studies of like how a brand would really use this, but the idea when he talks about [00:41:00] assortment, it's talking about, a Coke or Pepsi or somebody like that, and the data that they have at Nielsen IQ is basically saying, what's your market share and why has it either increased or decreased over the last quarter and. 

[00:41:15] Tom-Outro: Do we need to change what's showing up on the shelf? And obviously that's something that's been going on for quite some time. That's basically what's been going on for, since AC Arthur was creating the company. But now that there is digital, there's a corollary in the digital side of things where similar promotional changes will happen. 

[00:41:36] Tom-Outro: So like the sponsored search that we were talking about last episode in Kevel, where, those sponsor placements are proliferating online. That's already been going on in the store for many years. And it's not whether or not to do it. It's how much do you do it and how, and when does a brand spend more on it versus less? 

[00:41:54] Tom-Outro: Like he's got this view that's very much omni- in store and [00:42:00] online. 

[00:42:02] todd-sawicki_1_07-25-2024_162906: I think the other thing that was interesting to me along those systems lines and the differences, he's talking about how, his comment talking, we were talking like Adobe cloud and all the things. And suddenly you've got four or five, every time we bolt on a new ad tech thing or a new MarTech thing, you're creating another copy of the data. 

[00:42:20] todd-sawicki_1_07-25-2024_162906: And suddenly it's not getting synced. And for people like Nielsen who are tracking, sales share inside of retail, it's critically important. And they're being. They're being forced to reconcile these different data sets. I think it's pretty fascinating, especially given attribution is supposedly one of the key reasons why retail media exists. 

[00:42:35] todd-sawicki_1_07-25-2024_162906: And suddenly we're basically saying maybe it's not quite as good as we thought. There's, we're creating new problems into this. And I think, this is, there's been this, Just mad rush into retail media over the last four or five years. And, Kevel kind of talks about the rise of the current modern retail media infrastructure, kind of 2019, 2018, just appearing out of nowhere. 

[00:42:58] todd-sawicki_1_07-25-2024_162906: And you have Xavi [00:43:00] pointing out there's now over what they tracks over 600 quote unquote, retail media networks. Again, I hate the term network. It should just retail media publishers or whatever, but there's 600 retailers offering a program. And that's just astonishing, right? In terms of how many there are. 

[00:43:15] todd-sawicki_1_07-25-2024_162906: And now if you think about the number of publishers, 600 is not that many. But in the retail world, that's a lot. And so you can see also how the brands are trying to, are struggling a little bit too to deal with this where they're getting 600 phone calls. What's, how much are you going to spend with me and retail media? 

[00:43:28] todd-sawicki_1_07-25-2024_162906: I think that's one of the fascinating things is. That's happening is we're introduced. We're bolting on a lot of stuff, and we're reconciling. It's all we're gonna 

[00:43:35] Tom-Outro: Yeah, I think he's basically saying, when I asked him the question, when are the smaller brands really going to play in this? And he said, you have to wait until the measurement is such where they know that it works. And I think today, in the absence of a third party measurement or some way of saying that it really works and it's not somebody grading their own homework, what happens is the guys who are big enough, the Amazons and the [00:44:00] targets and the Walmarts, That have a halo effect can get the national budget, but outside of that, it's very stuck in the performance shopper world. 

[00:44:09] Tom-Outro: And so there is a need to make it bigger, make it part of the whole marketing budget, but it's very hard to do unless you can really prove it's working. And it's not just proving that last click attribution. It's proving what's happening across the whole funnel. And that's not there. 

[00:44:27] todd-sawicki_1_07-25-2024_162906: Yeah. And I think another comment along that lines that, it brought to my attention was Xavi's point about, hey, What we really need to do with retail media is how do we start moving non shopper media spend? How do we move, what is traditional, like creative brand budgets into retail media? 

[00:44:49] todd-sawicki_1_07-25-2024_162906: And that hasn't necessarily happened yet in any meaningful way. And I think that's, obviously as from an ad tech perspective, that's the goal is how do you pull in some of those dollars when that's how you're going to get to that [00:45:00] 1 percent or beyond. In terms of capturing GMB is as retail media. 

[00:45:04] todd-sawicki_1_07-25-2024_162906: I think that's an important consideration here, which is we haven't. We're not there yet. There's still now that I guess that's the good news is there's tons of upside. If we can start capturing those retail media can capture those non call it shopper dollars, then it starts getting interesting. And I think that's another. 

[00:45:20] todd-sawicki_1_07-25-2024_162906: I think the other thing that's interesting, you as you and I were talking about this afterwards is, these programs are until media and how disjointed they are still. There's not this sort of annualized it's camp, very campaign driven, we're getting into BTS, not the boy band, back to school for those, my daughter would love it was actually BTS, the boy band, that's make it a lot more, this would be a lot more interesting podcast my teen daughter. And it's very campaign driven. It's very all right. Fine. I'll give you some money for as part of my back to school spend, right? Okay. And it's a one off. And I think we have to work towards this. How do we build into something? It's always on always running very systematic and very integrated across the [00:46:00] relationship and systems of the retailer and the brands. 

[00:46:03] Tom-Outro: Yeah. And I think, I think the silver lining is that in the U S we don't have a situation where the retailers are still holding back and being, I don't want my competitors to know, so I'm not going to share any data to anybody. I think it's changing in the U S where the retailers are starting to do data collaboration with brands, obviously clean rooms and things are part of the safety net to make that work, but generally, at least in the United States, it's moving forward. 

[00:46:30] Tom-Outro: But I don't know. To what extent, like what will the, how will the JBP change or how will the relationship between the money flows change in the next few years? And I think that's up in the air. 

[00:46:44] todd-sawicki_1_07-25-2024_162906: I think that I think you asked us before. Do we have a strong future of retail media? Yeah. And our understanding of what the future of retail media is. I think we'd say, yeah, it's reasonable. Maybe it probably goes more programmatic. It probably, you're going to start seeing smaller players, maybe start forming different [00:47:00] groups, almost like the return of the ad network, right? 

[00:47:01] todd-sawicki_1_07-25-2024_162906: They have to cobble together some scale because you can't work with six just like you can't work with 600 individual publishers or advertiser. You have to work with just a handful. You can't log into 600 dashboards.  

[00:47:12] Tom-Outro: There's a reckoning coming there. 

[00:47:14] todd-sawicki_1_07-25-2024_162906: Oh, completely. There's no way. Just again, you can't have 600 publishers selling direct. 

[00:47:18] todd-sawicki_1_07-25-2024_162906: It just isn't. Feasible really that direct sales is always a top 50 thing. And I think it in retail media might even be less we'll see. And so I think, that conversation today kind of points to, I think it's going to be a little murkier. I don't know. We know the systems. There's traditional players like Nielsen and, you can say like Dunhumby and others and what's their play? 

[00:47:41] todd-sawicki_1_07-25-2024_162906: We're seeing more, the first gen retail media companies, quotients long gone. Promote IQ is getting kicked to the curb. Who knows what happens with Epsilon. And, does that continue to shift? And so I, it's going to be, and product wise, I think the other thing that kind of comes out, which is, it's not that we're waiting for that, that Xavi [00:48:00] pointed out, it's not that we're waiting for new tech to be invented. 

[00:48:01] todd-sawicki_1_07-25-2024_162906: All the inventions exist. What I think this really is about, and we made this point, or I think you made this point in our earlier retail media discussions, which is, it's not about new tech, it's about applying existing ad tech, right? Kevel wasn't new. It was just people woke up and said, Oh, I can use this for. 

[00:48:19] todd-sawicki_1_07-25-2024_162906: Over here in retail media and someone, everyone, ah, great. You're exactly right. And I think that's another thing, which is we don't need to invent new things to make retail media successful. We have to, what we're really trying to figure out is, all right what's the right business model? 

[00:48:31] todd-sawicki_1_07-25-2024_162906: What's the right operating model? What's the SOP for retail media? Maybe how do you integrate these systems? Like apparently that's not fully happened, right? That's one is of Xavier's. I think key points is these traditional retail enterprise systems. And ad tech, they're still not fully integrated. And so maybe that's the 

[00:48:48] Tom-Outro: You need to stop moving the data. I think that's something that's come as a talking point recently the, Azure's the snowflakes or whatever I think they're getting the idea that like, you definitely have to stop [00:49:00] trying to move data and copy it and push it to other places. 

[00:49:03] Tom-Outro: Cause I think that was a few years ago where it was always about, Oh, we'll push the data here. We'll push the data there. And I think that's changing. But beyond that nobody really owns the whole story from the ad tech side of things. Will it be that the best point solutions win, or will it be somebody who has the end to end solution?  

[00:49:21] todd-sawicki_1_07-25-2024_162906: that is going to be an interesting debate. And 

[00:49:25] Tom-Outro: We will continue to cover that. 

[00:49:27] todd-sawicki_1_07-25-2024_162906: yes, we will continue to talk about it as it evolves. Yes. And it's, it is the most, I think, interesting thing happening in ad tech because it's new and it is, I think, given identity and needing to be first party or zero party, They're now calling logged in users zero party users. 

[00:49:45] todd-sawicki_1_07-25-2024_162906: I'm like, oh my I just, I can't believe we're having this 

[00:49:47] Tom-Outro: Yeah, I think that's already started almost 

[00:49:50] todd-sawicki_1_07-25-2024_162906: I know it's I lost that, but it's oh my God, it's all just first party. 

[00:49:52] Tom-Outro: Yeah. No, nobody likes hearing second party either. So I 

[00:49:55] todd-sawicki_1_07-25-2024_162906: I know it's just anyway, but I think it is where it's going to happen. 

[00:49:59] todd-sawicki_1_07-25-2024_162906: [00:50:00] And, but what's interesting is these other channels, right? The rise of CTV, the. In store, especially, you've brought that up a few times and it came up again in this conversation with Xavi. I'm really curious to see that as an environment. I think we've been talking about digital out of home for an ad tech for 10 years, but maybe it's fine. 

[00:50:17] todd-sawicki_1_07-25-2024_162906: It's not about billboards. It's about in store good stuff to look at and watch and see what happens. And I think there'll be, it'll be fun from our perspective that it's not like we were all just talking about programmatic and cookie. Deprecation for the longest time.  

[00:50:33] Tom-Outro: I think maybe the middlemen will be a show that does not cover cookies. 

[00:50:38] todd-sawicki_1_07-25-2024_162906: I don't know if that's possible. I think we're going to get stuck in and everything else, we'll see. 

[00:50:43] Tom-Outro: Cool. All right. That was a good one. I think we'll wrap here, but we'll see you next time. 

[00:50:47] ​