# S2_E16 - Mediasmith - Marcus Pratt

S2:E16 - Mediasmith - Marcus Pratt 

[00:00:00] Marcus Pratt: That measurement doesn't work at all for connected tv, where generally speaking, you can't click. 

[00:00:06] Marcus Pratt: And it doesn't work nearly as well for something where there's a, a heavy in-store component as well. So you might, if you have good loyalty data, a retailer can still do. Some of that closed loop attribution, but it becomes Todd, to use a dirty word, I, I hope you don't have to put explicit on here if I say view through but it, it is gonna be a 

[00:00:27] Marcus Pratt: post view exposure. Yeah.  

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[00:00:51] Introduction and Guest Welcome 

[00:00:52] Tom: Today we're gonna be talking to Marcus Pratt, SVP at Media Smith. Somebody that, Todd, you've known for a long time, , super sophisticated [00:01:00] guy in the agency space. 

[00:01:02] Todd: Yeah, Marcus and I go back probably 15 years because he has always been very tech forward and as an independent agency. Media Smith is well known as an early adopter. I. As an aggressive user of tool. They were early on the programmatic trend, and he has been a customer of mine in, in the past from a a platform standpoint, and if there's someone who really you want to speak to, who really knows what they're talking about with regards to trends and things that are new, Marcus is a great person to get a good perspective on. 

[00:01:35] Todd: And what's great is he is actively buying 

[00:01:39] Tom: Yeah. 

[00:01:40] Todd: retail media. And so when we talk about. Our agency's gonna show up. Are they going to be behind the, the, this, I think seismic growth in retail media? I think Marcus kind of points to, yes, they're gonna be a factor. Now, is it roses today? No, [00:02:00] there's a lot of fragmentation. 

[00:02:02] Todd: It's still a challenge, but for those willing to invest. There's a lot of good and benefit, and Marcus really speak to that. We heard from Eleanor in terms of someone who's a few weeks ago got a great handle on the practical realities of a lot of these different platforms that the retailers using and putting in front of the buyers. 

[00:02:19] Todd: And Marcus is giving a, you know, a good perspective of how do agencies think about buying retail media and what's the reality of it today and, and what's the opportunity. 

[00:02:28] Tom: Yeah, I think a lot of people out there tangibly understand sort of Eleanor's, uh, role where she's using the self-service platforms. Um, for the onsite retail media part, what I was a little bit shocked about was hearing an agency like Media Smith being in charge of the offsite media for retail media, uh, networks as early as the Pandemic. 

[00:02:49] Tom: Because for me, at that point, there weren't, there wasn't a lot of competition. Even Good Way group wasn't in there yet. And so it was, it, it was interesting to hear that he was that early. Um, and because he is that early, [00:03:00] he's got a real perspective. On sort of how the, how the capabilities have changed, even CTV and other higher funnel channels. 

[00:03:07] Tom: So that part of it is, uh, I think is a great, chapter of this episode. 

[00:03:12] Todd: It's interesting is we talk to our colleagues in the space and they look at,  

[00:03:17] Todd: and we were discussing the Retail media forecast that eMarketer just produced. And you know, they were somewhat skeptical of the growth in, in terms of, oh, our agency's really going to want to work with retail media. 

[00:03:30] Todd: Are they gonna give up control? They like to have. Control over campaigns, the ability to manage and, and deliver them. And, you know, my point of view is, I, I don't see any contradiction there because as the tools evolve and as the platforms evolve, they're becoming more sophisticated and they speak again. 

[00:03:48] Todd: We, many episodes go, talked about neon from Horizon Media. I think there are others, the DSPs are getting in the space. There are SSPs who are merging, whether it's Kevel, who's, [00:04:00] who's pushing into programmatic. Koddi is pushing in that regard to retail media. The, the future is going to be cross retail, which really I think, speaks well to what agencies want to do in terms of buying it scale. 

[00:04:12] Todd: They love the audience and the first party data, the attribution data is great for what they wanna do, and you can really see what's how as agency shift into buying retail media. How that's a huge win at the sale to push retail media and, and really see the growth that eMarketer is, is talking about. I think so. 

[00:04:32] Todd: Marcus's perspective, I think is really ties some strength together in terms of where retail media is and, and where it's going, and how an agency looks at at the space. 

[00:04:42] Tom: Yeah. And I think agency perspectives enable, um, one level further in terms of where they want to see the measurement go. , We talk a lot about where MMM and other types of more sophisticated tactics I. , where they are today and where he thinks they might be going. So [00:05:00] again, just great, uh, great to talk to somebody , who knows the space from the media agency perspective. 

[00:05:05] Todd: Okay. Anyone who's in retail media who is looking to drive more dollars through the system and understand how agencies think, this is absolutely a, a must listen episode. 

[00:05:14] Todd: super psyched to be joined by Marcus from Media Smith, which is an agency. What's really interesting is Marcus and I, being in the ad tech and programmatic and media buying space for a long time, I've sold to Marcus in the past. Have had a a long relationship and my perspective Marcus on you is you are absolutely one of the most tech forward people in the agency space. 

[00:05:37] Todd: You are early to jump on. DSPs and programmatic. You've got strong opinions about the strengths, the weaknesses of all the things you you have to use and, and leverage. And I think and, and what was fascinating is as we bumped into each other at the architecture event in March, earlier this year in New York, was learning how media Smith and yourself are involved in the retail media space. 

[00:05:59] Todd: I [00:06:00] hadn't expected that. Right. One of the things that I think is interesting is, is what is the role of agencies in this space? And are they buyers? Are they service providers? Where do they fit? 

[00:06:10] Todd: And so welcome and, , looking forward to hearing Media Smith and your story and how you guys got into retail media. 

[00:06:16] Marcus Pratt: Yeah. Glad to be here. Thanks so much for having me. 

[00:06:18] Todd: Feel free to to describe Media Smith for the folks who aren't familiar in terms of your agency. Your founder Dave is really interesting background and perspective and you all being an independent agency in San Francisco. And I think that'll be helpful for giving context. 

[00:06:34] Agency Background and Early Adoption 

[00:06:34] Marcus Pratt: Yeah, absolutely. So the agency was founded in, uh, 1989, so I think that makes us the same age as Taylor Swift. I've been there a long time, thankfully not quite that long. But founded by a. Dave Smith and his, his wife Karen very early to digital. Based in San Francisco, in the Bay Area, you know, in the.com. 

[00:06:57] Marcus Pratt: Again, I didn't experience that, [00:07:00] but, you know, early banner buys and, and that sort of thing. I joined in I think 2007 right as programmatic was really about to take off and started our practice. There. And then in 2018, me and three other longtime employees did a management buyout and took over from Dave and Karen. 

[00:07:20] Marcus Pratt: So I'm now one of four operating partners owners at the agency. We have always been strictly on the paid media side. We don't do creative focused on media strategy, planning and buying across all forms of media, but with a heavy emphasis on. Digital and, and Todd, you know, me certainly on the ad tech space and my love of the complexities of, of programmatic, uh, so I think that sort of naturally took us 

[00:07:47] Marcus Pratt: into retail.  

[00:07:48] Todd: Love. Yeah. We could put the quotes 

[00:07:50] Marcus Pratt: Absolutely. Uh, love, hate, uh, you know, all things in, in the middle. But, um, you know, if everything just worked out of the gate, it, it would be so boring. We did not [00:08:00] have any plan to say, we gotta get into retail media and, and see what this is. But I, I think that naturally put us there as retail media is growing, right? 

[00:08:09] Marcus Pratt: As, as it takes up more and more of, of digital ad spend. You know, I think us and and every other agency are going to be intersecting there and, you know, it's something that we've kind of been tracking and seeing. You know, I think probably seven, eight years ago now, I'm not sure, you know, talking to. 

[00:08:25] Marcus Pratt: Round de and it's like you can do what with, you know, target data and, to talk about how that might work for CPG clients of ours and, and dipping our toe in the water. We've typically been separate from like shopper marketing in, in the traditional sense. So when we've worked with clients that do have a retail presence, they often have a shop marketing team. 

[00:08:44] Marcus Pratt: They have a separate budget. And we noticed there's a little more overlap, right? In terms of like, Hey, are we both thinking about programs with Ibotta or how can we use this data on retail purchasing? But certainly, those budgets and, and teams and measurement or historically [00:09:00] pretty siloed and we sit more on the, the brand side of things. 

[00:09:05] Marcus Pratt: But we're media planners and media buyers. So as retail media grows, it's okay. How does that fit into. Our plans, or even more broadly, you know, commerce media. So, you know, we're doing stuff with Kinective, which is United's network for B2B accounts of ours saying, Hey, we wanna target business travelers on their way to a, a conference. 

[00:09:25] Marcus Pratt: So I, I'm seeing that expand a little bit beyond retail and it, it doesn't have to be strictly endemic in, in that sense. We've also used, amazon leveraging their DSP and their proprietary data to target people who might wanna change car insurance providers, you know as one example. So we're very much on the buy side of that. 

[00:09:45] Marcus Pratt: Where things have gotten a little bit interesting and, and it's some fun peek behind the curtain is a little over four years ago we started working with PetSmart and we really pitched them for their. They're brand media business, but they said, well, hey, we have this [00:10:00] JBP program and we need to deliver media plans for our clients, which are CPG, you know, largely pet food suppliers, some other, you know, apparel and, and that sort of thing. 

[00:10:11] Marcus Pratt: And some of these companies are the largest CPG companies in the world. And they've got healthy budgets, ad advanced needs, and they're looking for, okay, how can. This particular retailer differentiate across everything else that, that we're doing with our own branded budgets. And then of course competing with Amazon, Walmart and other specialty retailers. 

[00:10:31] Marcus Pratt: So we've managed for the past four plus years, all of their offsite retail media. So we put together plans. Some of them are bespoke to a particular launch that's happening there and, and identifying that target. And then activating all of the first party data that, uh, PetSmart has from their very well subscribed rewards program across everything that's offsite. 

[00:10:58] Marcus Pratt: So their packages typically [00:11:00] include, onsite CRM, and, and they talk about, I. Store placement and all that. But we saw a lot of growth happening there in programmatic display. Lots of social some search and shopping activity as well. And then certainly CTV and, and the opportunity there to activate that data. 

[00:11:20] Marcus Pratt: So we've gotten to see what some of those companies are looking for some of the differences that the CPG advertisers have, uh, and how we can help provide those compelling programs. And go out and actually do the buying across the, the tech stack to deliver there. 

[00:11:36] Tom: So that's fascinating because that means in 2021, middle of the pandemic, you were actually an agency allowed to use retailer data. Go out there and be agnostic to some of the technology that you were using to implement. If that's if I'm hearing you correctly. 

[00:11:53] Marcus Pratt: Yeah, I mean, um, technology agnostic generally describes my philosophy. But we certainly do [00:12:00] have some preferences and then we work with our clients. We might be working we're agnostic, so we'll say, you know, our stack are yours. We've been customers of the trade desk since 2012, I think. But if a client says, here's my preferred DSP, or I'd like you to run out of our seat. 

[00:12:15] Marcus Pratt: You certainly can. So we have, you know for PetSmart we've worked with a variety of different tools there, but it's really about what's the best way to get their data into all the different endpoints where we can then go and buy that specific customer, right? Hey, somebody shops dog food but doesn't buy your brand. 

[00:12:34] Marcus Pratt: Can we find them across meta Google, the Open Web and maybe some certain CTV providers. So we've done some work on what's the best route there, but of course there are always gonna be commercial arrangements to that as well. How, how much does it cost is an important factor too. 

[00:12:52] Tom: Absolutely. I mean, I think, I, I think what's fascinating for me is, is hearing that as far back as 21, somebody wasn't just leading with a technology. 'cause I think, [00:13:00] my experience at Quotient, um, you have Epsilon others. It was a marriage, it was a one-to-one, and there wasn't, and you know, Todd and I have talked about this in other episodes offsite is no longer a winner. 

[00:13:10] Tom: Take all world. There are multiple DSPs. You know, we were talking to Costco and they're, they're working with multiple DSPs. But that wasn't really the case in 2021. So you have more learning than the average bear. In terms of. How the pathways work in terms of where to put the budget. But also you probably have some really interesting insights in sort of what's broken, how measurement works and shouldn't work. 

[00:13:33] Tom: And so would love to hear more about that. 

[00:13:35] Marcus Pratt: Yeah, definitely. And just to stay on the, the tech side for a moment. I think, you know, Todd probably knows this, but I think there's a huge opportunity for tools to make this easier for. Brands on the buy side and, and retailers on the sell side. But I look at this from the media buyer perspective of what is the tool? 

[00:13:55] Marcus Pratt: How much does it cost, how much value is it adding and does it get [00:14:00] me what I need to get? So there are a lot of different ways that you can buy ads on meta, but they're generally run through the same API and you know, is it. Is it worth it? And, you know, if you wanna bring in TikTok is is the tool that you have integrated with them. 

[00:14:16] Marcus Pratt: And often the, the tools that are good for buying social are not necessarily so good for buying display or, or programmatic CTV. Uh, so we navigate that every day as media buyers. But we also working with PetSmart, we did, you know, just as an example, looking at. Growing on CTV trying to get the best match rates. 

[00:14:37] Marcus Pratt: So if you have first party data connected TV should be very good for that. It's a logged in environment for the most part. So if you've got an email address, you can match that. But at the time, you know, Google's DV 360 wasn't leveraging IP address. They didn't necessarily have the same granularity or robustness in targeting. 

[00:14:56] Marcus Pratt: So if we pushed an audience to them, the scale was lower. So we [00:15:00] said, Hey. Let's, we can look at that and test them against the trade desk and guess what? We can reach, you know, X percent more significantly more for households in that first party data set with a different tool. Um, so I'm, I'm in favor of anything that helps kind of streamline and organize that, but I do think the messy nature of the ecosystem means that there will be folks that have a, a strength in one area and maybe not in another. 

[00:15:26] Marcus Pratt: And you gotta be comfortable working with them and, and piecing 'em together. it a seamless solution for the, the brand who just wants to buy package and, and find their audience wherever it makes the most sense. 

[00:15:38] Todd: Well, I think that's interesting 'cause we have definitely talked to, you know, a couple other agency people or, or media buyers about buying retail media and the challenges you talk about in terms of. There is no perfect cross retailer solution. There's no perfect solution in terms of match rates and audience integration. 

[00:15:57] Retail Media Evolution and Agency Perspective 

[00:15:57] Todd: It's kinda like programmatic 2007 all over again, [00:16:00] right? Where there was no dominant platform. Different SSPs were integrated with different DSPs. It was a Wild West, and it's kind of that same thing. You even look at like Horizon trying to build a retailer buying platform in Neon. I don't know if you've tried that. 

[00:16:12] Todd: And there's some others that are emerging that we're talking about. So I think it's interesting to me, one of the things that's holding back the rise of retail media, truly taking over online media is the tooling. Like, it's not as seamless as it should be. It's not as easy, it really takes to your credit, you know, Marcus as as a sophisticated. 

[00:16:32] Todd: Buyer, a sophisticated tool user, you're having to really do a lot of that work to make this work. And, and I think that's an interesting stage of where we're at, which is if we wanna see more agencies, media agencies buying retail media, the tooling needs to improve and make your lives easier. 

[00:16:48] Todd: Otherwise it limits, I think some of the things you might do in other circumstances. 

[00:16:54] Marcus Pratt: Yeah. Well, and I, I think that's a double-edged sword 'cause agencies love complexity. Right. So, [00:17:00] um, if, if we can help su 

[00:17:02] Marcus Pratt: for some of that.  

[00:17:03] Todd: in your services. Yes. 

[00:17:04] Marcus Pratt: Yeah. I mean, I think I. I believe this is gonna get better. And there are some very smart people working on some tools to, to add things in. The retail media space has also changed and grown very quickly. 

[00:17:17] Marcus Pratt: So can the tools keep up with that growth and, and kind of what's required across the board, I think is the question. And if you look at something that is trying to be, you know, across a lot of retailers, there's a lot of difference in terms of how they operate, what they're doing, what they're willing to provide. 

[00:17:36] Marcus Pratt: You know, I, I think the complexity there is limited that there aren't necessarily standards that you can apply, right? If a lot of that is done through API and they're working with their own tech, it's not like building to an IEB spec or RTB. So I think there will always be a need to say, here's a tool and here's how we can maybe supplement that. 

[00:17:59] Marcus Pratt: And I think you're seeing [00:18:00] that with some of the larger players now where they're selling a tool, but there's also a managed service component. I. They might be putting a little bit more together on, on the backend. We're transparent with our clients in terms of what we're using, but many advertisers they just want it to work. 

[00:18:15] Marcus Pratt: I think, Todd, what, you know what you're saying? There's clearly a lot there, but an area that really interests me is the measurement and how that can be brought together or maybe is not being brought together. So you're seeing. Retail media is growing, you know, that growth might be slowing a little bit. 

[00:18:35] Marcus Pratt: It can't grow faster than digital advertising forever. If it eventually becomes the market, it's gonna have to grow at the same rate as the market. So, you know, e-marketer, I think is, is predicting that I think by 2029 they're forecasting still. A slightly higher pace of growth for retail media than, than digital media, but it's, I think it's something like 10% and seven as opposed to it's, it's been nearly like, double [00:19:00] the rate for the past few years. 

[00:19:01] Marcus Pratt: So as we get there, I think about like, where's that growth coming from? And we really focus on, on this area in terms of our expertise, but I think the opportunity is largely an offsite, right? If you've got, you know, Amazon or Walmart I. Don't have any internal data that anybody else doesn't, but I think they're doing a pretty good job of monetizing visitors to their properties. 

[00:19:24] Marcus Pratt: And I don't think there's that much that's going un monetized. I'm sure there's room for them to, to grow that, but at a certain point they either need to, that's the same thing as any media owner, right? Get more eyeballs or sell more ad slots. Right. And I, I think cramming more ad slots into your sponsored listings, it's not necessarily gonna be helpful in the long run. So I think you see that the growth opportunity is, is really gonna come from offsite and then for all of the smaller retailers that don't have Amazon or Walmart level web traffic but still have valuable data.[00:20:00]  

[00:20:00] Marcus Pratt: Uh, that's the growth and it's a much different beast in terms of how it gets bought, but also typically how it gets measured. Compared to, you know, things like a, an Instacart or a DoorDash or Amazon sponsored listings. Uh, so that's something that's really interesting to me. 

[00:20:14] Tom: Was that, are you saying that's more of like a still last click problem versus a multi-touch, or what would tell us what sort of, what your thinking 

[00:20:23] Marcus Pratt: Yeah, I think the attribution really gets to be part of it. And I, I listened to a great session. Eleanor Hayden you guys had her on recently, and, and she touched on this from the, the other perspective really in the the closed loop attribution of like, Hey, can we see somebody clicks on our sponsor listing, adds it to the cart. 

[00:20:44] Marcus Pratt: Checks out. That is, you know, a lot closer to traditional performance marketing, you know, direct response media. We put that kind of in line with like a, a paid search or, or shopping of what are we driving [00:21:00] from a, a click to purchase standpoint. That measurement doesn't work at all for connected tv, where generally speaking, you can't click. 

[00:21:09] Marcus Pratt: And it doesn't work nearly as well for something where there's a, a heavy in-store component as well. So you might, if you have good loyalty data, a retailer can still do. Some of that closed loop attribution, but it becomes Todd, to use a dirty word, I, I hope you don't have to put explicit on here if I say view through but it, it is gonna be a 

[00:21:30] Marcus Pratt: post view exposure. Yeah. If I see an ad on Hulu for Doritos and then I go to the local grocery store and buy Doritos, and that can be tracked together because I keyed in my phone number. You know, that's attribution is it that much different  

[00:21:46] Tom: Yeah,  

[00:21:46] Marcus Pratt: if I see an ad on Instacart and add them there? 

[00:21:49] Marcus Pratt: Incrementality is, is the real question, I think in, in both of those cases. But it, it takes a, a little  

[00:21:56] Tom: well.  

[00:21:56] Marcus Pratt: a different mindset. 

[00:21:58] Tom: I think the problem right now is that [00:22:00] the people who are pushing CTV hard are trying to like get people to buy it with their remote or QR codes and things like that. I love, I love all that tech, but we need to get to a place where we're forcing the measurement to deal with the multiple channels that, that really, drive the business and just , pushing Shoppable media isn't gonna get us there. 

[00:22:20] Marcus Pratt: Yeah, I, I agree. And so, you know, Tom, I think I, I love that stuff. It can be fun to play around with and we've seen some cool executions and some decent, , results depending on what you're looking at. I think you know what Amazon's doing with Prime. Makes a lot of sense to have that, you know, add to your cart, one click on the remote. 

[00:22:39] Marcus Pratt: 'cause they've really got the control there. But I've seen results for a lot of QR code type campaigns or engagement rate campaigns, and it's if you like click through rates on programmatic display, you'll love the response rates for these things. People are sitting there watching content, they're not in a lead forward shoppable mindset, right? 

[00:22:57] Marcus Pratt: So part of me [00:23:00] says. Television for, I think for a long time has arguably been the most effective form of advertising and it's never been clickable. But, uh, you know, ask any serious CPG marketer, right? Does TV work, right? And do you have the data? Like they pretty much built the advertising measurement industry as we know it today. 

[00:23:20] Marcus Pratt: So saying, Hey, what if we could make that as effective as a 300 X 250 with a 0.04% click through rate? It feels like the wrong answer to me. Can we play with fun areas of engagement? Is inviting the consumer to, to do something or, you know, giving them an offer that they can respond to Smart? In some cases, yes. 

[00:23:39] Marcus Pratt: But is that gonna solve the, the measurement problem? I think absolutely not. And when you talk about maybe less highly considered purchases and things that you buy at, you know, grocery, fast moving consumer goods, do I really wanna mess around with all that? I mean, yeah, I keep a shopping list sometimes. 

[00:23:58] Marcus Pratt: I know some people are [00:24:00] fanatic about that, but I think a lot of people go to the grocery store and they buy the stuff that they always buy the grocery store and a couple other things for a recipe. And maybe they're swayed when they're there in the chip aisle to try out a new product and. 

[00:24:17] Marcus Pratt: Maybe they were influenced by, by marketing to do that. But I just think that most people, if they're buying something that's like $5, they're not doing that level of consideration. Let me research it online beforehand and, and add it to my, my app and all that. So you're not gonna have. That full connection of, you know, engagement. 

[00:24:40] Marcus Pratt: I, I clicked on the CTV ad, et cetera. So it brings you back to a, a little bit of, back to basics of how have we measured linear television? How do you measure the success of CTV or, or offline or upper funnel channels? So I think a lot of that is, is falling more to [00:25:00] the brand budgets. It's also, if you're gonna spend. 

[00:25:03] Marcus Pratt: A lot of money then we're seeing, you know, CPG companies are saying, okay, well this is coming out of our brand budget. We need to evaluate it the same way that we do that our brand media agency might do. And it needs to perform in, in that fashion 'cause it's not going to on a, on a last click basis. 

[00:25:22] Marcus Pratt: Uh, but I think you've got this little bit of a, a loggerhead situation where some of the same companies are selling. Hey, I can give you a, you know, eight to one ROAS on sponsored search results, and you can see closed loop attribution in our system the same day. And now they're trying to say, oh, and also come and buy our CTV offering, leveraging the data when the measurement should really be a lot different, and maybe it should come out of a, a different budget that probably isn't expecting to see the results. 

[00:25:52] Marcus Pratt: As immediately. I think that can be highly effective, but you've got a much longer time horizon to that impacts [00:26:00] de depending on the variety of factors, the, the products being one of them. And also the way that you measure it. I'm a believer in above the line, brand, media, whatever you wanna call it. 

[00:26:11] Marcus Pratt: We say, you know, full funnel, but. CTV can be highly effective, but how you actually measure that and whether you can track to the incrementality, I would argue in some cases it's just as effective as some other digital touchpoints where they're getting over attributed today. So it's the same problem as, you know, google.com branded keyword you know  

[00:26:36] Todd: Yes.  

[00:26:37] Marcus Pratt: type  

[00:26:37] Todd: lie in the industry is Google stealing the attribution for that  

[00:26:41] Marcus Pratt: right. Same thing as is happening on Amazon, right? If I go and  

[00:26:45] Todd: Right.  

[00:26:46] Marcus Pratt: bounty paper towels in and, and click on the first link, you know that's contributing to that blended really high ROAS number the buyer's seeing. Is it helpful? Yes. Is it incremental? I think it is. But is it a, you know, is it a 10 [00:27:00] X roas 

[00:27:00] Todd: not an eight or eight. Right. It's not eight x 10 x Exactly. Are you seeing to your point about measurement and, and to the CTV as a part of retail media as an example of are they are. The CPG guys or your clients, are they using, you know, media mix modeling like they would for linear tv? 

[00:27:17] Todd: Is it, 'cause that hasn't been used as much with digital, but maybe we need to start bringing that in to your point of it's, we gotta bring in the media mix modeling guys who live and die, you know, with this, with linear tv. And if we're not doing that, maybe that's the mistake 

[00:27:30] Marcus Pratt: yeah, definitely. I think we're seeing just an, an increase in that kind of demand coming from the, the larger CPG players. And I, I think that there's some nuance there in terms of what data do they need to power their models. You know, I, I think. Classic media mix modeling provides a lot of value, but you talk to people about it and they say, oh, is that the thing where I have to wait to get my results and, and all  

[00:27:55] Tom: Yeah, I was gonna say, I was like, say it ain't, so that's like the whole thing people are excited about with retail [00:28:00] media is you're getting results a lot faster.  

[00:28:02] Todd: But to the point, you know, I think it's interesting you talk about the time delay within store, right? There's a company that Tom and I work with that in store is a big component of their business online. In fact, 99% of orders done online are picked up in store, and so they're. They need a 28 day attribution window from order to completion. 

[00:28:21] Todd: And it kind of speaks to that. You know, there's this, maybe it's not a year, but there's a time delay factor, exactly what you're talking about. You see it on Hulu, and then it's your next store visit, which could be three days, seven days, 14 days away. And so we need to start thinking about how do we expand, I think these attribution windows where it's not 

[00:28:37] Todd: impression to click it's gonna be impression to store visit to whatever. And the old we're gonna start dealing in 28 day windows again not same session again. And it's a big change to where digital has been for the last 10 to 15 years, obviously. 

[00:28:51] Marcus Pratt: Yeah I think there's also a lag effect sometimes on the media, so we see like the. The half-life value of, you know, or, or [00:29:00] the ad stock effect of video tends to be a lot longer. So you're actually seeing the impact of, right if you run a heavy video campaign one month later, that's still creating influence. 

[00:29:11] Marcus Pratt: And then when you bring in the, the in-store element, right? Frequency, how often are you visiting, right? If, if it's grocery, that's maybe a little bit faster. But if you talk about specialty retail. There, there are some of those stores that people might only visit, , a few times a year, depending on, on their need or, you know, when they're running out of Staples. 

[00:29:29] Marcus Pratt: But to go back to the, yeah, Tom, you'll have to wait two years to get your data. Sorry. I, I think there are a lot of models that are being run within in brands now that . Are probably not called MMM. There's been a, a great rebranding, but I think also evolution of modeling results. But not necessarily, and it's built off of that traditional MMM, but not in the same very course way of just load in your, you know, impressions for last month. 

[00:29:57] Marcus Pratt: So we're seeing a lot of companies that are. [00:30:00] Doing something that is, is similar, but taking much more granular inputs on the digital side, taking into account any, you know, experiments that are running and are able to push out results much faster. You still do have a certain amount of constraints as you know. 

[00:30:14] Marcus Pratt: Did somebody have time to go into the store yet, for example? But we've, we've seen cases where we can get data refreshed on a weekly basis, but it is modeled based on the inputs of media and marketing activity. Not based on a click and a pixel fire, which I think has staying power 'cause it can work across different channels and it doesn't require matching of unique IDs across households, cookies, emails, and, and things that might not be that durable. 

[00:30:46] Tom: If you're looking for that type of change to happen in the industry, you were suggesting there might be sort of organizational changes that need to happen. I think we're seeing with like Unilever, they're talking about. We're, you know, 20 x-ing the creators that we work with, we're also [00:31:00] putting, different teams together to make sure we're sort of aligning better with the retailer's JBP processes. 

[00:31:06] Tom: What do you think on the measurement side needs to happen at the CPG side to, to really drive this change? 

[00:31:12] Marcus Pratt: Yeah, that's a really good question. And I, I've not been inside of, of a CPG organization, but from some of what I've seen there, there's a need, I think, to bring together the advertising effectiveness people. As, as I said, you know, especially the larger companies, they've got people who really understand how this stuff works. 

[00:31:33] Marcus Pratt: They've got a lot of data and they can tell if something's driving incremental. Value to them in terms of sales or, you know, net new households bringing them together with the shopper and increasingly the digital people. Um, so a lot of these brands are still relatively new to digital. Right. And I mean, we saw it during the pandemic. 

[00:31:57] Marcus Pratt: We were working with halo Top Ice Cream. [00:32:00] And they had not done a lot of online selling of ice cream. It's something you pretty much go to the freezer aisle and get. We were working like quickly standing up like they were working with MikMak and like, how can we drive, you know,  

[00:32:13] Tom: Yep.  

[00:32:14] Marcus Pratt: more delivery and, and you know, testing that out. 

[00:32:16] Marcus Pratt: And of course they saw a huge surge in their, you know, delivery business and, and buy online pickup in store through some of the, the marketplaces especially. But that, that wasn't that long ago. And this is, you know, a. A major company that knows what they're doing and just starting to get into looking at Google Analytics conversion events, um, and, and things like that. 

[00:32:39] Marcus Pratt: So I think that's come a long way. And you have folks who are very digitally savvy and understand that like direct response ecosystem, but they don't necessarily have the same experience that the full kind of advertising suite. At effectiveness people do on incrementality, uh, you know, [00:33:00] would this have happened anyways? 

[00:33:02] Marcus Pratt: Right? If a product is, is bought on Amazon, was it, 'cause you had a sponsored listing there. So trying to, to marry those two together and get some more of the old school traditional media and the digitally savvy people talking, what you'll find is they might say, look it, we have all this data and all that you're taking into your model is. 

[00:33:23] Marcus Pratt: What do we spend on next channel last week, and how many impressions did we get? The model could be a lot better. That's looking at everything including not of home and linear TV and, and PR and all that if you have more granular digital feeding into it. And then on the flip side, the measurement folks might be able to say, well, let's look at, are there some experiments that we could run to help determine a little bit more of the incrementality of some of these things, even if the spend isn't as high. 

[00:33:49] Marcus Pratt: As in, you know, our linear TV budget we can probably work with you to get a finer tune on what's really incremental and at at the very least, validate [00:34:00] what's coming back out of the, the platforms. But I think increasingly I. I don't wanna say discarding that, but the grading your own homework that you get out of a lot of these platforms telling you you're roas you can do a little incrementality testing and say Todd, to your point, great branded sponsored listings, they do provide value, but it's, it's a two to one instead of a  

[00:34:22] Marcus Pratt: 10 to one roas. 

[00:34:23] Marcus Pratt: Uh, you can basically get a multiplier to put in there. And kind of monitor your campaigns that way. In addition to incorporating that into a broader incrementality model. 

[00:34:34] Tom: But getting back to the, the organization, you're basically saying you can't get a Gen Xer from Dish Networks to merge with a Gen Z. goPuff person on the measurement side, you can't create this digital czar that's, you know, that's measuring things on both the sort of long term, look back and the short term that that's a, that's a unicorn that doesn't exist. 

[00:34:54] Tom: Right. 

[00:34:55] Marcus Pratt: I mean, I, as an aging dog myself, I, I like to think we can all [00:35:00] learn new tricks. So I, I don't think it's strictly that from a, a demographic standpoint. I think it's, yes, there are some people who carry all of that knowledge and have done it all, and they've bought television and, and Instacart. 

[00:35:14] Marcus Pratt: But there's only so many hours in a day. So I think  

[00:35:16] Tom: Yep.  

[00:35:17] Marcus Pratt: connecting people who have those specialties and bring  

[00:35:20] Tom: Right.  

[00:35:21] Marcus Pratt: in, in different  

[00:35:22] Tom: Well.  

[00:35:22] Marcus Pratt: is, is happening, but oftentimes there's still separate budgets, separate teams, separate agencies managing all that. So there's not much incentive for that brand measurement person to go and, and see what's going on with the shopper marketing people. 

[00:35:37] Tom: Yeah. Well, I mean, I feel like Amazon, yeah, I was gonna say, I've closed that one out. I feel like Amazon now is in a situation where they have that expertise internally, which is very much about,, that very short conversion window. But now they're pushing very hard on CTV. And there was a very, uh, there was a good Eric Ser post that we'll put in the show notes about how they're gonna be the CTV data engine going forward, but they're gonna have to deal with this [00:36:00] mismatch of measurement. 

[00:36:01] Tom: And I don't know where they're at with that. I know that. and Meta have their own mm m plus models or whatever that are sort of trying to hybrid the, the longer term and the shorter term. But, you know, do you think it's Amazon that drives this or is is there an agency that, that you 

[00:36:16] Tom: think  

[00:36:16] Todd: And, and actually, Tom, let me add to that. My, my comment was gonna be, is this an industry standards issue? Right? Which is, is it, does IEB need to get involved much like some of the other organizations did on linear tv? Are we, you know, like a and a and what have you? Are we gonna need to see something where. 

[00:36:34] Todd: There needs to be more standardization of terms and definitions and what does measurement mean from platform A versus provider B. And maybe that's a part of this too, which is, I don't think it's, you know, I think Tom, I'd be shocked if Amazon's it, because Amazon's only on Amazon, and I think that's there. 

[00:36:51] Todd: I don't feel, because the data is so siloed, because it has to be, 'cause it's first party that you're ever gonna have a winner takes all aspect on this. [00:37:00] But does standardization make it easier for a, a multi. , A tenant buyer like you, Marcus, easier. And is that something that we need to start seeing to make it the, this combination of data, this combination of different channels, this combination of different retailers, data start to to come together? 

[00:37:17] Todd: Is that standardization piece, and maybe does that come from IB or some other organization? 

[00:37:21] Technical Challenges and Measurement 

[00:37:21] Marcus Pratt: Yeah. So I, I think two interesting questions there. You know, first, Tom on the Amazon side, I think they're forcing the conversation. So you've got, a lot of people who are buying Amazon, they're seeing it effective on that kind of closed loop attribution side. And by just opening the floodgates of, of prime video, they've kind of changed the CTV landscape and then allowing you to bring that data there. 

[00:37:45] Marcus Pratt: I think you've got a lot of people who are maybe more on the Eleanor Hayden side of things who have been doing that really good response oriented work and now, you know, one of the biggest platforms they work with has this whole new channel, so they're gonna be. [00:38:00] At the very least, playing around with it and finding they need a, a little bit of a different measurement and now it, it depends, right? 

[00:38:06] Marcus Pratt: But like, do sponsor listings on Amazon Drive incremental actions off Amazon, potentially. Right. I might go and search for olive oil, see AZA listing and say, oh, you know what, I'll just, I'll buy it from them directly, or I'll get it at Costco. You know, when I'm there next week, uh, that hasn't really been a, a measurement challenge that people have been thinking about. 

[00:38:26] Marcus Pratt: It's more like if I sort the out on Amazon, do I get the conversion on Amazon? I think when you take that to Prime video, I. That really gets to be a problem that everybody's gonna have to solve, and they'll find it as soon as they see their first performance report is kind of what I'm thinking. So they're not gonna necessarily solve it, but I think they're gonna force the, the issue there of, okay, what where does this come from? 

[00:38:49] Marcus Pratt: For anybody who hasn't done that already, and I will say a lot of brands have started to establish, okay, here's how we go to market and, you know, here's what we're doing with retailers A, B, and C. [00:39:00] And the budgets might be combined. So like there's a certain amount that's really outta the shopper budget here and, and we're measuring it this way and then there's a certain amount that's out of the brand budget. 

[00:39:08] Marcus Pratt: And it all needs to fit into our model. We need to ensure that we can get data back in the format we need. You know, Todd, as, as far as whether standards will solve this I think there's room for improvement there. I think what I'd like to see more of maybe like on the IAB side of things is on the. 

[00:39:25] Marcus Pratt: The buying the specs, the definitions there, making that easier for companies like you mentioned earlier, to build tool sets that really work a across the spectrum. Some standards would, would help there the same way that an RTB spec enabled companies like the Trade Desk. On the measurement side, I think standardization will also help, but what we see is. 

[00:39:50] Marcus Pratt: Every company's different. Their media mix is different and you know, how they track success and, and what they're looking at. So we kind of have to conform [00:40:00] things to them. You know, I, I think an interesting example is just like, how do you define a, a channel, like what partner fits in, fits into a channel? 

[00:40:08] Marcus Pratt: That's often a measurement question. We can set standards until the cows come home. But if, if an advertiser says. Oh, no, no. Well we call this partner, CTV and this partner online video. It's like they don't care, right? You buy Hulu and most of the time you're getting it on whatever screen they're watching. 

[00:40:28] Marcus Pratt: That happens to be majority CTV, but you can't even necessarily parse that out. And unless you want to pay more to say, exclude people watching on their, their tablets. But we see those, those kind of situations of. Google. And as they're moving to Performance Max, how do we put that into a bucket of a channel if they're leveraging YouTube and search and, and shopping and display. 

[00:40:52] Marcus Pratt: So we have different taxonomies for different clients to conform to what they call a channel. And we're not gonna say that's, that's [00:41:00] wrong. That, you know,  

[00:41:01] Todd: Right.  

[00:41:02] Marcus Pratt: really social. So I think that's just a little bit of the work that every advertiser has to do to. Make the data work for them. And thankfully that's getting, you know, easier to pull things from different platforms and, you know, kind of standardize them. 

[00:41:17] Marcus Pratt: But that's probably gonna be more on a per basis than something that I'm counting on a, a white horse standards body to come in and solve for us. 

[00:41:25] Todd: Um, I think one of the things that comes across in this conversation is the realities of how technical media buying is online in all its fashions and forms. And as retailers, I. As second and third tier retailers start to get into this business and Right, they're now adopting retail media or trying to build this out, join the party, so to speak. 

[00:41:42] Todd: And I think your, your business of, of being a, like an in-house team to, to help to offer to their advertisers as they do this is an interesting one. 'cause I think they're not necessarily without the experience like you and I have been in the, the media buying space for digital for a long time and understand its, its technical [00:42:00] complexities and so I think it speaks to. 

[00:42:03] Todd: There is an expertise required, like if you're just a retailer getting into this, you have no idea. What you're getting into and what you're gonna need to really deliver results and service to your brands. And so I think that's interesting. You know, my, one of my takeaways from this conversation is that technical expertise is required, and I can see why you got into that business, right? 

[00:42:22] Todd: Working with PetSmart and are you looking to grow that business? Are you looking to bring in other retailers? You think this is something that would be appropriate for, you know, the type of agency you are and, and kind of a future? Or do you think you'll be more on the client direct side? Who's buying retail media and helping execute it, um, or maybe a mixture of, of both. 

[00:42:37] Marcus Pratt: Yeah, that, that's a great question. I mean, I think we're very much on the buy side. So I think in, in some of those cases we can be like, like you guys, a little bit of middlemen there. But if, if there's media buying to be done we're happy to help. And, and I think we can add a lot of value to an organization, whether they're a brand or a retailer. 

[00:42:57] Marcus Pratt: And there's some kind of advisory stuff that can come [00:43:00] into that in terms of how does this buying happen. So there's maybe a little bit of a, a nuance there in terms of like. Who's actually buying the media, right? If, if you go and, and purchase something from a retail media network, but it's, it's offsite, it's CTV, right? 

[00:43:15] Marcus Pratt: Like what's happening is that retailers buying that media and they're reselling it to the, the CPG. So I think we can certainly provide a lot of help in doing that activation, that media buying and, you know, at a certain amount of scale and efficiency, that is probably not worth doing in house. But also providing some customization that you might not get by going with a kind of peer plug and play provider. 

[00:43:42] Marcus Pratt: So, you know, we're happy to help there. I think on the, the technical side, Todd, there's, there certainly is some technical nuance and you know, we can advise on that, but I think a lot of it is more just bringing the experience and understanding what [00:44:00] media buyers are gonna be looking for. And how to set up an offering and a product suite that allows for that customization without going crazy and, and having bespoke plans for every single one of your CPG companies. 

[00:44:15] Marcus Pratt: If you're building a product and if there's a managed service element to that product, it makes it easier to handle some of this. But Brand X is gonna say, I don't want to advertise on Fox News. Brand Y is gonna say, I don't want advertise on M-S-N-B-C. How do you handle that? Right? Or somebody else might say, here's my brand safety playbook and I, I need you to be able to adhere to that and maybe it involves this other third party. 

[00:44:38] Marcus Pratt: So that's where we can, I think, navigate that pretty easily and say, here's what probably a lot of folks are gonna want. And maybe ask them these five questions in their onboarding so that they don't just see their ad on whatever website they. If they didn't wanna be on how are you handling MFA and, and filtering, how are you looking at where your [00:45:00] ads are serving programmatically and ensuring that your advertisers are aware of what they're kind of signing up for, or what tools they have to say block these domains or, or channels. 

[00:45:11] Marcus Pratt: So we can help with managing all that, but also asking the questions before they start to become. Problems with the ultimate goal of what's gonna provide incremental value ' cause these brands are buying other retailers, they're buying their own media. And just 'cause you can do it doesn't necessarily mean that it's gonna be a net benefit to them. 

[00:45:31] Marcus Pratt: Uh, so it's really finding that intersection of, when you're talking about offsite proprietary first party data, we've got information on shoppers that you can't get anywhere else and marrying that with the most effective. Best quality inventory. We have a lot of experience that for advertisers of all stripes. 

[00:45:51] Marcus Pratt: And then saying, and how can we scale that? And, you know, try and spend dollar almost as effectively as, as the last, as as we go up [00:46:00] and continue to drive incremental value as budgets increase. 

[00:46:03] Todd: Having looked over your shoulder and seeing the work you've done and your team has done, um, I can certainly say, and I've always felt this, you and your team really know what you're doing and you all are, are, uh, true experts at, at. Digital media buying. And so for anyone, I can easily endorse you from having seen your work and, and using some of the tools that, um, I've built and sold to you in the past and, and can speak to that. 

[00:46:27] Todd: So for anyone looking for a, someone who knows what he's talking about, if it wasn't apparent already, this conversation, I. Marcus and team really know what they're doing and talking about whether and you know, Eleanor before also is a good example, but I think you as well, and this expertise sort of shows up because I think as retailers now are stepping into the media business, they quickly realize there's a lot they don't know. 

[00:46:48] Todd: And there's a lot of expertise in the online media world that they can leverage. And I think your involvement in your team's involvement is a good example of that. The discussion around measurement, I think is true. The different channels and what these people are gonna be [00:47:00] looking for is important and. 

[00:47:03] Todd: Retail media has the potential to really solve a couple of important pain points for digital media. Like again, not having to rely on crappy third party data, real attribution and new offerings that are coming like in CTV and, and sort of this multi-channel or multi-format opportunity. And I'm pretty excited and bullish and where retail media is going to be. 

[00:47:22] Todd: I think there's some changes that occur, like how do we make it easier for agencies to buy, especially non-endemic buys. I think that every retailer we talked is like, oh, I want. I desperately wanna get non-endemic dollars and we're like, whoa, whoa, whoa. Hold on. You get your endemic stuff to work first, then we can start talking non-endemic and you know, the things you're talking about. 

[00:47:39] Todd: I think speak to that of the challenges around if you're non-endemic buyer buying into this, as cool as it might be. Um, I think that's a, you know, that where the future goes, so maybe a good way to, to. You know, as we're coming up on, on time here is where do you see the future of retail media in comparison to traditional gym media? 

[00:47:57] Todd: Obviously Tom and I are very bullish on it. And are you as [00:48:00] bullish, what do you think where is this business in three to five years? Um, do you see tighter relationships between retailers and publishers? The rise of some people have said, you know what, we're gonna go back to 20 2006, where we're gonna basically recreate the old ad networks, is these partners even said offsite won't be programmatic. 

[00:48:14] Todd: It'll be. True networks that emerge or or other examples is CTV become the true pinnacle of retail media? I'd love to get your perspective on where do you think this business goes in the next three to five years? 

[00:48:25] Future of Retail Media and Closing Thoughts 

[00:48:25] Marcus Pratt: Y Yeah. Well, thank you Todd. And it's an interesting question to ponder because for me, at a certain point, anything that has been growing like so quickly, I feel like is due for a, little bit of a, a stumble. So I feel like there are going to be. Some ups and downs. I expect we'll see that continued growth, but it's not a catchall solution to solve every problem. 

[00:48:52] Marcus Pratt: And I think you're gonna start to see where a lot of retailers have have kind of saturated or gotten close to a saturation point if they're [00:49:00] onsite media and then they're doing good work offsite, but looking at how can we grow that? So I think you're gonna start to see some cases where. It's, it doesn't make sense for the brands to keep growing at the rate that they have been when they look at the true incremental they're measuring it, their, their return. So you'll start to see a little bit of stumbling there. And, you know, I think this is obviously tied into and, and shelf space and you look at what Walmart was doing, just asking for a big increase. 

[00:49:32] Marcus Pratt: And they can do that. Most retailers probably can't, right? The. The Wawa retail media network probably can't say increase double your budgets or else. But to me that's a, 

[00:49:44] Marcus Pratt: it's a li  

[00:49:45] Tom: don't, yeah, don't, don't sell the goose short. I don't know. 

[00:49:48] Marcus Pratt: okay, so to me that's a little 

[00:49:50] Marcus Pratt: bit of a 

[00:49:51] Marcus Pratt: sign  

[00:49:52] Tom: I actually think you might have already said that the, uh, the stumbling is already happening with 'cause Walmart was definitely called out for having those large [00:50:00] increases. I think that  

[00:50:00] Marcus Pratt: I.  

[00:50:01] Tom: that's a, form of stumble I would 

[00:50:03] Marcus Pratt: If they're mandating it, that feels like it's a problem. Right? And so, you know, we haven't been in those conversations, but as a buyer, I wanna be increasing my budgets 25% because performance is great. And I'm saying, you know, can you take 40? What, what kind of inventory do you have? But when they say you've gotta do this to play ball, that's a sign that we're maybe starting to hit that point. 

[00:50:25] Marcus Pratt: And I think there's a lot more work to be done to. Say, what is the audience that we have, the value that we can bring for whatever unique data we have, and how can we make that reach as, as far and wide into effective channels as possible? So Todd, I think that's where you might start to see some of that, that network side of things of if we do a tighter partnership with Disney, can we, you know, if you can increase your match rates by 5% on tens of millions 

[00:50:54] Marcus Pratt: of households. Right then you, your budget can increase 5%, right? Whereas [00:51:00] otherwise, you're talking about are you increasing frequency against the same households or are you expanding out? Are you doing lookalikes? So I think we're starting to get to that point where you might start to see, wow, this performance has been so great. 

[00:51:10] Marcus Pratt: It's been so great. It's been so great. And then if you keep increasing your budgets, you're getting to like that diminishing returns curve for some advertisers. So you'll start to see. You know, it's forecasted some of that slowdown, but I think that's gonna force some more of that hard work to be done. 

[00:51:26] Marcus Pratt: Right. It doesn't make for as good of a case study to say we did all this work and, and tested different ways and, and now we have six different ways that we can onboard our data to Disney. And we got an 8% match rate increase. Sounds like a snoozefest, but like that's actually the hard work that maybe needs to be done to fulfill that growth. 

[00:51:46] Marcus Pratt: Right? And, you know, times everybody else find those good inventory providers. Make sure that you're as, as tight as you can get with them. And that they're working across each other as well. 'cause that's obviously another issue with the, some of the ad network models is, are [00:52:00] you providing incremental? 

[00:52:02] Marcus Pratt: Value with Disney, great, but not if somebody just was binging on, on Peacock and saw you there. So managing that holistically, I think is where technology can really at that household level of who do we really wanna reach? Who's eligible to be an incremental customer for us? And let's make sure, again, going a little back to basics that we're reaching as many of those people as we can. 

[00:52:27] Marcus Pratt: An optimal frequency that's neither too high or too low to drive impact. 

[00:52:32] Tom: Great. Thank you Marcus, for joining us on the Middleman. Really enjoyed the discussion would love to hear how things go over over time as you being one of the only agency people out there who. 

[00:52:44] Tom: Are, able and have the experience to tell brands, , I've done this on the retailer side, , I know this world. It would be great to hear more from you about your experience and your, and your thoughts, so keep in touch. 

[00:52:57] Marcus Pratt: Absolutely will do. Appreciate it guys. This has been [00:53:00] fun.  

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