# S2 E28 T48 Bobby Watts AD Retail Media USA

S2 E28 T48 Bobby Watts AD Retail Media USA 

[00:00:00] Cold Open + "Two-in-a-box" joke 

[00:00:00] Bobby Watts: But like, let's just say we take one of our top laundry suppliers and we meet with them and we're gonna go through a, a, a business. 

[00:00:06] Tom: it still the same tiny cubicle because that's two in a boxes sweaty. I know. 

[00:00:09] Bobby Watts: No, it's not the same. It's, we call it a meeting room maybe, but the, and, and it is gotta be more than. It's gotta be more than that,  

[00:00:16]  

[00:00:16] ​​ 

[00:00:37] Tom: All right. Hey Todd, how's your week going? 

[00:00:40] Todd: Excellent.  

[00:00:41] Kickoff: Post-Halloween time-zone rant 

[00:00:41] Todd: It is, uh, we're, we're post Halloween and which means we're post daylight savings time, uh, expired, and I'm very much on perma daylight savings, living in the northeast west corner of the country where we go from having. That, you know, sunset after 6:00 PM to now, before 5:00 PM And so the idea of, of, you know, these people who are like, oh, we should be permanent standard time. 

[00:01:06] Todd: No, because in the summer, the, the flip side of that is if we had standard time, first light would be 3:00 AM 

[00:01:13] Tom: Oh, 

[00:01:14] Todd: here in Seattle. So we're like, let's delay sunrise as much as possible. People are like, oh, kids don't wanna go to school in the dark. And like literally there's schools that have to start at like 10:00 AM for it not to be in the dark, 

[00:01:25] Tom: perspective is important. 

[00:01:27] Todd: Yeah. I think fundamentally we have to like, the, the problem is if yes, I understand if you live in southern California or the southeast, you've got this, you, you have a different wind. We really need four time zones. The northwest, northeast, southeast, southwest, those should be the time zones, right? 

[00:01:41] Todd: They're, they're different. 

[00:01:42] Tom: I think that sets us up very good for this discussion with Bobby Watts of Ahold Delhaize Retail Media US. The reason I say that is because they specifically have a real stronghold in the Northeast. So the retail chain includes Stop and Shop Hannaford [00:02:00] Food Lion. 

[00:02:00] Why Ahold Delhaize is a Northeast powerhouse 

[00:02:00] Tom: Um, it was 

[00:02:01] Todd: Food. Lion's actually a Mid-Atlantic southeast 

[00:02:04] Tom: Yeah. So they're, they're dipping down into your, your old neck 

[00:02:06] Todd: North Carolina, Georgia. They're big in. 

[00:02:09] Tom: yeah. But, the buildup of all this was, uh, buying Peapod and, and taking a big stake in Fresh Direct. And so there, there's a lot in this discussion because basically Bobby Watts has been doing this, um, really since any inkling of retail media ever existed and really before then as well. 

[00:02:25] Tom: So he's. He is a longtime operator in the retail world and really has embraced retail media from every stage. 

[00:02:32] Todd: His background is kind of akin to, you know, we, we, we supposed to link to our discussion with Keith from formerly of Best Buy. Very analogous. Right where they came from, traditional retail operations side of the business and then migrated to digital and retail media. And you know, Bobby's story is really fascinating 'cause he's gone through the entire, uh, journey where they started, with an outsource provider like Criteo. 

[00:02:55] Todd: And then they moved to, um, the, the staff augmentation [00:03:00] kind of white label structure of Epsilon. And now 

[00:03:03] Tom: No, they went to Quotient then to Epsilon, 

[00:03:05] Todd: Sorry, quotient, then Epsilon, they, they did back to back because quotient went under, um, or got sold off into pieces. Uh, but they were part of that. Right. They that then they used Epson. 

[00:03:14] Bobby's background + Peapod to FreshDirect history 

[00:03:14] Todd: Now as a part A Hold De Hayes has acquired an ad tech platform to, so they basically in-house the development and so they have their own. And for people who aren't familiar, hold De Hayes is actually a European based operation expanded into the us. Um, and so they've, to what you said, they've acquired all these, these chains that you're more familiar with. 

[00:03:32] Todd: You're not as familiar probably with a whole dele as you're often more familiar with the retail 

[00:03:37] Tom: Delhaize in Belgium, uh, Albert Heijn in Holland, 

[00:03:41] Todd: They're in Romania. They're like all over Europe. They're, they're 

[00:03:44] Tom: proli and Romania. Yeah. I mean, but what's interesting is a lot of times they lead the market on a lot of in-store technology. Um, that's the reason why when they launch Edge in January, they're gonna have in-store as part of it. 

[00:03:57] Tom: They're, 

[00:03:57] Todd: Edge is The retail media platform of what they're calling [00:04:00] it here in the 

[00:04:00] Tom: yeah. And I think the big headline is they are in housing, their, their onsite ad serving, um, and the in-store capability this is a really big step. Like the only other ones that do this are the am are Amazon and Walmart. 

[00:04:14] Todd: Uh, yeah. And, and Target to an extent I think does this too, right, too. And, um, but you other, you get into like, um, Orange Apron Media from Home Depot. They're using outsourced platforms. They're licensing platforms like the Kevels of the World is an  

[00:04:26] Leading in in-store tech + launching EDGE 

[00:04:26] Todd: example in that space. And so, and, and. Bobby talks about this, like the decision they made and why they made it and, and their evolution. 

[00:04:33] Todd: So for those of you are who are at the beginning of your retail media journey from a retailer standpoint and thinking through the different stages of what that evolution might look like from a product and tech and and service provider perspective, this is, I think, gonna be an interesting listen, what, what the lessons Bobby saw along the way and why the decision they made. 

[00:04:49] Todd: Right? And the decision they made is non-trivial. He talks about 60 to 70 people are staffing this product platform and you know, they went to an eyes wide open, but. Ahold Delhaize, given the, the European [00:05:00] basis, is one of the largest grocery store operators in the world, so 

[00:05:05] From outsourced partners to full in-house ad tech 

[00:05:05] Tom: I, I attempted to call him the Intercontinental Champion. I don't know if we caught that, but, um, yeah, 

[00:05:10] Todd: he missed your, your WE reference. So 

[00:05:12] Tom: yeah. Well, you know. 

[00:05:13] Todd: hip to a wrestling type, 

[00:05:15] Tom: Um, but I would say, like, the last thing I wanna say , I looked at the old way we were working when, when we were working with Ahold as Quotient, um, we were using audiences like they were six months to two years old. 

[00:05:28] Tom: Um, and he's really looking to 

[00:05:30] Todd: Because, by the way, just to first perspective, that's you. You know, you, you were often involved in loyalty programs and that was sort of the data that you guys were pulling from. It wasn't real time, it was processed, you know, on, on it took a while. So the idea of getting lists out over these retail media loyalty programs, it would take a while. 

[00:05:46] Todd: So that's why they were six to six months to two years old, which as a media guy is like, what? No way. Like we, we people bitch in, in the media business. If audiences are seven days old, let alone six months, like that's a non-starter. So it's interesting to see this [00:06:00] evolution of where retail media, its origins in these loyalty programs where the data was really out of date. 

[00:06:05] Todd: To, can they move to a world where it's not just real time, but, but even maybe predictive audiences, um, as well. 

[00:06:12] Tom: Yeah. So great discussion, long discussion. So buckle up and enjoy. Hello, welcome to the Middlemen. We are here with Bobby Watts of Ad Retail Media us. Did I get that right? Um, I've gotten that wrong in the past, , Ahold Delhaize is a company that started in, in Europe, but has a huge presence, in the northeast, in the us And , also we're big fans of the original PeaPod e-commerce capability. 

[00:06:40] Tom: We wanted to hear from you, tell us about your long history. You've been there since what, 2008? 

[00:06:46] Bobby's 30-year journey across the grocery business 

[00:06:46] Bobby Watts: Uh, so I've been with Ahold Delhaize, uh, in some form or fashion for a little over 30 years actually. So it's been quite a, quite a journey, uh, working with them through a number of different pieces of my career through operations category management. [00:07:00] Uh, merchandising planning, as you mentioned, worked in the Chicago office with Peapod Digital Labs with our e-comm business, and then more recently, for the last several years leading our retail media practice. 

[00:07:10] Tom: my first touch with you guys was working a little bit with Mark Williamson when he was, uh, part of your business. Um, I was at Quotient and we were trying to do everything for you, so we were running your. Offsite media. We tried to bring, you, bring sponsored search. We acquired a company quickly in Europe and brought it over, presented it to you, 

[00:07:28] Tom: and then the pandemic hit and things actually went pretty well from that perspective. Things grew really fast. Tell me about the beginnings of retail media for Ahold-Delhaize. What was it like to, to work in that pandemic era? 

[00:07:43] COVID as the inflection point for retail media 

[00:07:43] Bobby Watts: Well, I mean as as you said, Tom, like we were mainly outsourced pretty much everything through third party relationship with Quotient. They managed everything soup to nuts, pre pandemic. Um, even before Quotient, we, we had partnered with Criteo from a platform standpoint. [00:08:00] Um, and so we, we've been around the block a bit. 

[00:08:02] Bobby Watts: Uh, but it was all as you, you know, as I said, mostly outsourced and handled through a third party. It was really about the time, I guess it was 2020, uh, so right when we were really coming in the thick of the pandemic, uh, where we made the decision to stand up our own retail media network and. That's where we went out and said, Hey, you know, we want a different model than a fully outsourced third party model. 

[00:08:27] Bobby Watts: Um, and that's when we started to, I'd say, I wanna say right way to maybe say like, we kind of decided to transition away from Quotient. We partnered with Publicis and Epsilon and CitrusAd at the time to help us on a journey of building out a retail media network. And that came in the form of technology, but also, uh, staff, staff augmentation as well. 

[00:08:49] Bobby Watts: Um, and so then that was kind of the beginning of the journey of really standing up what I called, like when, that's when we got serious about standing up a retail media network at that point in time, in about 2020, 2021. [00:09:00] And then, um, more recently, as you know, as we spoke at Groceryshop, we're now embarking on even taking another step in the journey where we've built our own in-house ad tech and continuing to build out our own in-house network and moving away from staff augmentation and all that piece, all that stuff's going away. 

[00:09:17] Todd: What I think is fascinating is that you are a rare bird in that you've covered the entire journey from completely outsourced to, you know, platform post augmentation to now in housing. And I, I like, that's a journey I think other people are beginning to go down. And so what, what are some of the, you know, recalling back, you know, what were some of the decision factors to go away from Criteo and Quotient to Epsilon and then now Epsilon. 

[00:09:44] Why speed drove early outsourcing choices 

[00:09:44] Todd: To your own, you guys acquired a company or building out and, and wholly owned, like walk us through that decision tree of, you know, A led to B and then B led to C and now we're moving on to the next thing. And I think that's a good, helpful guideline to other, especially as, as companies are now getting into the space and [00:10:00] epsilon's popularity is growing as an entry point, but I think your journey is, is a great one to reflect on and some of the things you learned and what led you to make the decisions to evolve. 

[00:10:08] Bobby Watts: Yeah. I mean, Todd, I think for first it started around speed, right? So we wanted to, we knew that there was an opportunity to have a retail media network and have. Uh, our first party data and our, uh, customers to be able to, you know, engage with advertising with our CPG partners and, and do that in a really compelling way. 

[00:10:28] Bobby Watts: But we, we knew like in order to do that ourselves and build out an in-house, that would take a considerable amount of time. It would take years, quite honestly, is what we knew. And so we said, well, how can we move quickly? And that, that led us down the path with the criteo's and the quotient of the, at the time. 

[00:10:44] Bobby Watts: And so, but then once we got to a, a level of maturity, and also I'd say the market, the industry got to a level of maturity to say, well, wait a minute. We, we can do this in a different model where, I mean, we already have the relationships with the, the CPGs. We have direct [00:11:00] relationships. Um, we weren't as strong in the agency world as the Quotient and others were, they had those agency contacts and agency relationships, but that. 

[00:11:08] Bobby Watts: Came and, and then also by the way to, I mean, you know, Tom, you said it around the pandemic and e-commerce exploded. Um, and so all of our, you know, our web traffic and, and our e-commerce business matured. And so we were like, wait a minute. We've got something here that we should be taking more ownership of versus being solely reliant on a third party to manage that for us. 

[00:11:29] Moving from staff-aug to owning the stack 

[00:11:29] Bobby Watts: But again, speed is always top of mind in retail. Everything moves at, you know, such a fast pace. We, we knew that we didn't have years to kind of build out our own team before we could really get serious about a retail media network. And so that, that was the key deciding factor around, okay, well, so how can we move at the proper speed, stand up a network, have something that's viable to be in the market? 

[00:11:51] Bobby Watts: Um, and so that's when we made the decision to say we want to stand up our own retail media practice and network. We're not gonna build our own ad [00:12:00] tech, we're not gonna be able to go out and hire 60 to 70 humans to, from a talent perspective, to stand up a team. But we need to take more ownership and we need to, if we, if we aspire to get there, you gotta start with the first step. 

[00:12:12] Bobby Watts: And so that was kind of our decision at the time to move away from quotient, to move to Publius, Epsilon and CitrusAd to take that step. And so that would say that speed was the factor. And then as we got into it, Todd, we said. Hey, like, this is fantastic, but yet we still don't fully own it. And, and in fact like just, I'll be super transparent, like with my team, internal team, there was always a bit of, as much as we tried to have this one team mentality, there was always still in us them, there was the, you know, the staff augmentation folks and then there was the internal AD USA badged folks. 

[00:12:45] Talent, culture, and the "us vs them" problem 

[00:12:45] Bobby Watts: And we work really well together. I don't wanna paint a bad picture. We work really, really well together. But there, there was always still this underlying kind of, you know, epsilon citrus ad publicis agenda on with some folks and leadership and having conversations, and then our [00:13:00] team, and we knew that wasn't allowing us to advance our capabilities the way we wanted to. 

[00:13:05] Bobby Watts: It wasn't allowing us to have the conversations with our advertising partners the way we wanted to. And, and know, by the way, that was our ambition from day one. We had told Publicis from day one, this is the staff augmentation model and everything is a temporary relationship. We, we aspire to take full ownership. 

[00:13:21] Bobby Watts: And so we started working with them on a plan, a multi-year plan to say, okay, how do we gradually attempt to perm associates or either, you know, hunt and resource our own? And again, it all boiled down to having. You know, the right pacing and speed in which to do that. Having the full ownership so that we could have really the full relationship with the CPGs and the advertisers. 

[00:13:43] Bobby Watts: Um, so that it's really built for purpose for AD USA and our go-to-market strategy. 'cause we have a unique strategy, right, with five great local brands. Um, we're not cookie cutter and we not looking for everything to just be cookie cutter either. 

[00:13:55] Local banners matter: Giant, Food Lion, Hannaford 

[00:13:55] Tom: I actually wanted to talk a little bit about the brand so that the audience knows, some of the [00:14:00] listeners are not on the East Coast. It may not even be in the US and so they may not know Giant and Food Lion. but before we even get into what those brands are, the Peapod, the build out or the acquisition of that, um, was formative in getting e-commerce. But then you invested in Fresh Direct and that sort of put you on the map for delivery on the East Coast. And now you have this process that happened after the pandemic ended where you basically migrated those brands into what are the, the known brands or , the retail banners Stop and Shop Food Lion Giant, Hannaford. 

[00:14:37] Tom: So now you, you've gone through this process of taking all of these sort of startup brands and merging them into the brands that are the neighborhood grocery store. So what was that all about and tell us like what are the challenges there? 

[00:14:50] Bobby Watts: I mean, if you, if you know the real history, I mean, peapod.com was, they were the first kind of leading grocery delivery, right? They were doing it before anybody [00:15:00] else. Um, and that there was an acquisition made by ahold USA, this was even before the Ahold Delhaize merger. Uh, to pick up peapod.com as part of the business. 

[00:15:09] Omnichannel + branding shifts: Peapod → store brands 

[00:15:09] Bobby Watts: And so that was a bit of a, I'll call it a pet project off to the side or whatever, but like, it never got the focus because e-commerce was in grocery quite small, quite honestly. Right. And especially in the early two thousands. Um, so it was a little bit of, I think the leadership team at the time with I hold, uh, USA specifically seeing, you know, the vision for the future that this is going to be something, let's get someone that's, uh, that knows this space pretty well so that we can be set up for the future. 

[00:15:34] Bobby Watts: Um, but it was just such a slow burn. I mean, consumers just weren't migrating in grocery like they were in other retail sectors. Um, but in 2016, 2017, Amazon fired some shots, right? They went out and they acquired Whole Foods, and they were like, no, this grocery e-comm business is gonna be something we're gonna take seriously. And oh, by the way, all the while we had taken the peapod.com brand. We had expanded that [00:16:00] across the east coast to cross stop and shop giant food and giant companies, so that was actually peapod.com branding on the east coast as an e-comm delivery service. Even though the customer was a stop and shop customer, all the delivery and e-comm stuff was done through the stop and shop, or excuse me, the peapod.com branding. 

[00:16:16] Bobby Watts: But with, again, as I said, if I go back then, you know, Amazon shot fired some shots and we were like, okay, when we really need to get even more serious about this e-comm play. And that's when we stood up in Chicago, an e-comm Center of Excellence. So we, we stood up additional product resources and IT infrastructure resources. 

[00:16:32] Bobby Watts: The digital merchandising team, digital marketing team, like AD USA again post merger. This was an area where we went all in. And so we stood up Peapod Digital Labs in Chicago, building off of that peapod.com heritage. And then we, at that point in time, made the decision shortly thereafter to do the Fresh direct acquisition. 

[00:16:51] Bobby Watts: At the same time, we had made the decision to modernize the Peapod.com technology stack, but also rebrand the e-com [00:17:00] delivery, um, and click and collect services on the East coast to the actual great local brand. So we, the peapod.com naming and branding went away and it moved to Giant Direct and Stop and Shop and, and those brands. 

[00:17:13] Bobby Watts: Um, and that was intentional because that, that was fit our strategy of becoming an omnichannel retailer. So if you think about it, like it was one of the challenges in a pure play business is like you, you don't have a store that, you know, that's generating a, has a different margin profile than, you know, e-comm delivery, uh, which is typically a, an very, uh, unprofitable business or at very minimum, very low margin business. 

[00:17:35] Bobby Watts: Um, which grocery in general is low margin. 

[00:17:37] Todd: It, by the way, it's, yeah, grocery is low margin, so it's funny. A grocery guy calling, you know, e-comm delivery, even a worse margin 

[00:17:43] Bobby Watts: That's, yeah, 

[00:17:44] Todd: didn't think that was true. I didn't think it was possible, honestly. 

[00:17:47] Bobby Watts: it, it is bizarre, Todd, but it, it, if you think about it, the grocery industry works on, like you said, anywhere from two to 4 cents, right? On every dollar. That's kind of 

[00:17:55] The brutal grocery margin reality 

[00:17:55] Todd: Right. It's a super, I, I, so I just as a, an aside, um, I grew up [00:18:00] in upstate New York in the hometown of Wegmans and I, I literally, the, the Nicole and Colleen Wegman, the current generation running Wegmans. Um. Went to high school and I, we grew up in the same town, went to high school together, like we worked at a pizza shop together. 

[00:18:13] Todd: So it's funny 'cause we, and we all worked at Wegmans at one time or other, and the first date, you know, they always say, look, our margins are like one to 3%. So that's, you know, to your point about the two to 4%, I've heard that story, you know, directly 

[00:18:24] Bobby Watts: And it's true. And all grocery retailers spent decades trying to take cost out of the system, right? Like you're looking for operational efficiencies and everything you can, um, to make the, the shopping pattern inside of your stores as efficient as possible. Self-checkouts became the thing, right? 

[00:18:39] Bobby Watts: Because that also created efficiencies. But then consumer demand said, no, I want you to pick it up for me. I want you to deliver it to me. I want you, I want all these things. And so then that, as you can imagine, put a ton of cost back in the system and back on that model specifically. Um, and so that's again, but we knew to make e-comm work, it needed to be an omni-channel [00:19:00] business. 

[00:19:00] Bobby Watts: 'cause when we know for sure when we definitively when a consumer shops with you both in store and online, they're more loyal, they're baskets bigger. Like they, they, they're just the, you know, the customer that you really wanna try to tack or go after. Um, and so again, we, that was the whole purpose of kind of rebranding and building out that model on the East Coast. 

[00:19:17] Bobby Watts: Fresh Direct had its own place of being a pure play, and I think, you know, as we think about what the Fresh Direct offering was at the time, very quality focused, mill solutions focused. It helped fill some voids with us in that New York metro market as well. Uh, which as you know, is, you know, a very difficult market to deliver groceries, industry, the density and the high rises and everything. 

[00:19:38] Bobby Watts: It. Again, they helped fill a void for us at that point in time.  

[00:19:41] Tom: Yeah, it's funny, I, I grew up on the East coast too, so I was a King Kullen shopper. Um, that was another one that you guys acquired, so you really are kind of everywhere. Um, but it was interesting when we were talking at grocery shop, 'cause I was kind of like, my wife is not super psyched about the idea of giant Direct versus FreshDirect. 

[00:19:57] Tom: And I was like, okay, I, that's interesting. But when we [00:20:00] talked about it, you said, um, you know that those brands. Are position differently for the different segments. And so I thought that was super interesting. 

[00:20:08] FreshDirect + New York market dynamics 

[00:20:08] Bobby Watts: Yeah. And, and just to clarify, like we, we talked to the King Kullen folks at one point, but we never went through with that. 

[00:20:14] Tom: Oh, you didn't do okay. Yeah, I, I remember that was some 

[00:20:16] Bobby Watts: It was, it was, yeah. We, we were, you know, that was, I, I don't know all the details behind that one. Dare speculator speak to it, but it was, it was definitely on the table at one point. 

[00:20:25] Bobby Watts: Never came to fruition. But you still bring 

[00:20:27] Tom: you own a geography, that's a big deal, 

[00:20:29] Bobby Watts: It is. And, and Tom, you're, you're spot on. And it's, it's why we have kept, um, our great local brand strategy, right? Like we could have easily homogenized everything and went to a mono brand and, and that just wouldn't have worked. I mean, Hannaford has a different price positioning and marketing and just go to market plan altogether than a food lion, than a giant company, then a stop and shop. 

[00:20:52] Bobby Watts: And so. And they're very connected to the communities in which they, they support and serve. And so for us it's important we don't [00:21:00] lose that. We don't lose that heritage, we don't lose that local connection. Um, and then yet at the same time, we wanna leverage the scale, especially across the retail media network and across e-commerce capabilities. 

[00:21:10] Bobby Watts: And, and so we do leverage a model of, you know, how do we leverage full scale of Ahold Delhaize USA. And bring technology and capabilities at scale, and yet allow our great local brands to go to market in a very uniquely positioned way. 

[00:21:25] Tom: Specifically leveraging, you know, Ahold Delhaize, USA, uh, you guys are now actually leveraging your European assets. Um, and so you're, you know, in my mind you're the intercontinental champion now. Uh, you're, yes, you're, you're moving into the world that Amazon and Walmart have done, which is. You are bringing in your own ad server and bringing your ad tech in-house, but you're crossing the, the pond and there's not too many, you know, I just heard some news today that Carrefour is pulling out of certain geographies like Italy and others, um, and that the acquisition that Ahold [00:22:00] Delhaize has done in Romania is doing well. 

[00:22:01] Tom: So how are you able to straddle the Atlantic Ocean so well? 

[00:22:05] Local strategy + global ad-tech: one codebase 

[00:22:05] Bobby Watts: Yeah. So I mean, I think, you know, again though, I mean there we've got a model in the US where we allow five great local brands to go to market uniquely, right? So in the Netherlands, Albert Heijn goes to market, you know, in a unique way relative to Delhaize in Belgium relative to alpha Beta in Greece, and as you mentioned, Profi as well in Romania. 

[00:22:22] Bobby Watts: So like for us it's how do we again, use this model of build it once and leverage it multiple times. While, even though the go-to market positioning may be different, the need states in those regions or geography may be slightly different. The technology specifically in retail media, the ad tech is quite honestly very similar in the, in most cases the same. 

[00:22:44] Bobby Watts: Now we have different requirements as we were looking at the advertising technology Edge, as we call it in the US, to stand up. When we looked at things like sponsored product ads and measurement and things like, we had to, you know, add some things to the platform to meet US [00:23:00] standards and what our advertisers in the US were looking for. 

[00:23:02] Bobby Watts: But guess what? My European counterparts benefit from that. 'cause now they have a, a head start on the European market because they're drafting off of the, the US expectations and the us, roadmap, if you will, from a capability set. But we are leveraging the same code base across, you know, Europe and the us. 

[00:23:20] Bobby Watts: Let using US servers for the US and European servers for Europe, but it's the same code base and we're sharing a product roadmap now where when we think about advertising technology, it's a global roadmap and how are we leading the industry as a global organization in advertising technology and retail media networks as well. 

[00:23:38] Todd: What were some of the features, uh, you know, and, and decisions that went into acquiring and now owning and running your own ad platform?, just as a background, um, I built a large DSP that got sold ultimately to out brain, now known as teads. And, uh, so as someone who's built right, I know that when you mentioned 60-70 people, I've, I've run that org before and sort of owned that and owned the, you know, the, the [00:24:00] joys and, and pain of, of building and running ad tech. 

[00:24:03] Todd: Um. And you know, that it, it is a non-trivial task as I think you guys are well aware and what, you know, walk us through the decision to feel like you had to own something in terms of, you know, the, the what you guys wanted out and, and wanted to build out from a retail media standpoint. Because I think that's an interesting discussion and I think that you, the fact you said it like. 

[00:24:21] Todd: If you're not willing to sign up to own and manage 60 to 70 people, it, that is not something you all people should ever be thinking about doing. It's a non-trivial thing, but there's a certain scale where maybe it makes sense to maybe your point. So it'd be kind of interesting to, to walk through that and, and what you guys see. 

[00:24:37] Why build your own ad stack? Relevancy + speed 

[00:24:37] Todd: Um, what drove that decision, what you now see in terms of running it and, and the benefits of it from your standpoint. 

[00:24:42] Bobby Watts: Yeah, I think so. I think first and foremost with me, one of the things I'm challenging my team constantly on Todd is relevancy, right? This just running an ad for the sake of running an ad's, not doing anybody any good. It's not paying out for the advertiser, and ultimately as a retailer. What we wanna do is drive more loyalty with our [00:25:00] consumers. 

[00:25:00] Bobby Watts: We wanna sell more groceries at the end of the day, right? Um, and so when we think about retail media, it's all in service of how are we moving sales and volume and growing market share, and the technology that powers that has to be centered around delivering the most relevant items through those ads. 

[00:25:16] Using grocery-specific algorithms + real-time signals 

[00:25:16] Bobby Watts: Whether that's sponsored product ads, a display ad, or in-store digital screens, doesn't matter. It's all about driving relevant, engaging content to our customers. And so as we were looking at owning the technology and building the technology, we felt and still believe that if we built it using our data science, using our algorithms that are built specifically around groceries. 

[00:25:39] Bobby Watts: Purchase frequency in groceries is very different than the purchase frequency around electronics or, uh, you know, any other retail sector. Quite honestly, grocery just is so fast that it is like people are coming back 2, 3, 4 times in a single week. Um, and so that in itself lent us to believe that we could build a better algorithm in a better ad server [00:26:00] related to sponsored product ads specifically, uh, that's kind of built by grocers for grocery to be able to really deliver highly relevant campaigns. 

[00:26:08] Bobby Watts: So that was one reason. And so that's, that's the reason why we've been kind of, you know, touting that in the industry. The other thing is, is that when I look at, and this is not a slam to anybody that we've worked with in the past, but they have many masters to serve. They have many retailers they're working with. 

[00:26:24] Bobby Watts: And so when it comes to prioritizing the roadmap, they gotta think about a lot of people and they have limited resources just like everybody else. Um, and so we just found that we weren't moving at the pace we wanted to move on the things that were important to us. Things like ag agentic tools, things like leveraging AI to help automate workflows. 

[00:26:43] Bobby Watts: And, and so for us it was like, well, we want to build out these things. The, and we, we can do it faster ourselves, is the way we believe. The other thing is the data that sits behind all of that. In an AI world, especially a generative AI world or an agent AI world, [00:27:00] we're pretty guarded around where we put our data. 

[00:27:03] Bobby Watts: And so building that in-house allows us to keep our data behind our four walls and gated, if you will, a bit, but still leverage those incredible capabilities around agentic tools and things like that. 

[00:27:15] Todd: Well, I think it's important, uh, and, and I hear you on the data side, right? Having run a DSP and, and the challenges of pulling in and pushing out data and, and how you guard data and clean rooms and all that. It is a pain in the, the behind and. I think that, you know, you look at, at, you know, people talk about data and the, the company that probably guards it more than anyone else in the world is Amazon. 

[00:27:36] Todd: And you know, part of the reason they acquired, I mean they acquired their ad tech and, and brought it in-house like Sizmek is the company they acquired that's now powering Amazon's DSP. And I think it's kinda the same thing, whereas data is so valuable and important. And I think you brought up another interesting point. 

[00:27:50] Todd: If you have a data science team and an advanced data science team, to your point about the ability to look at records. Dynamically and, and be able to, um, build out sort of the data [00:28:00] models. I think that's a precursor right in, in terms of if you don't have a sophisticated data organization team structure, the ability then standing up your ad tech is probably impossible. 

[00:28:10] Bobby Watts: agreed. 

[00:28:11] Todd: Right, right. In the DSP that I ran, I had a, a data science team in terms of bid logic and user logic. And, and you know, we had the challenge of how do you incorporate hundreds, if not, you know, thousands of different data sets for advertisers. And, you know, I think what's interesting, um, as well for you all is obviously, I, I had. 

[00:28:29] Todd: Not heard of Ahold Delhaize until I started working with Tom, but I'd heard of your local brands. I, I went to college in, in North Carolina, uh, so I'm very familiar with Food Lion. My wife's from there, so my in-laws lived there. And so I've shopped at Food Lion many, many times and Right. Would not have necessarily known that. 

[00:28:45] Todd: But when you start. Piecing together the pieces, and then you bring in the European operations. You guys do have a certain global scale that lends itself to your point of like, yeah, Todd, we can invest in 60 to 70 people on the ad tech infrastructure side. In addition, just [00:29:00] like, you know, dunnhumby, Kroger bought. 

[00:29:02] Todd: Dunnhumby America to build out their own data science. You know, we have a data science team powering these businesses anyways, so we have sort of that DNA to pull off what you're pulling off. And I think that's kind of an important aspect, which is, it is non-trivial to, to own and run your own ad stack, but it can have benefits if you have a certain size and scale. 

[00:29:18] Todd: What are some of the interesting, besides relevancy and the ability maybe to do better targeting with your own dataset within your own understood, shopping lifecycle or, or conversion lifecycle. What are some of the other features that you feel are unique to, you know, the Edge offering, which is what you guys call the US retail media platform? 

[00:29:36] Todd: Um, you know, as a product guy, right? I'm always curious like what features were the ones that you were really. Begging for and wanting to build out, never could get to until you owned it. So love to hear what you guys think about from a product differentiation standpoint in terms of features of the Edge platform to power your retail media 

[00:29:50] Bobby Watts: Yeah, I mean I think so good news is it'll be at parity with what you would expect elsewhere. First and foremost, that was important to me, Todd. So like we have to be at parody with things like incrementality and all [00:30:00] those pieces of measurement, which is great. Okay, so check the box. We're able to do that where we believe it gives us a point of differentiation. 

[00:30:06] Bobby Watts: And where we're really excited about the future is where I talked about this concept of a one-stop ad shop. So Edge is only the beginning. So we we're launching on January 5th with Edge being the power, the ad tech, if you will, that's gonna power sponsored product ads, our onsite display offering, as well as our in-store digital screen network. 

[00:30:26] Bobby Watts: At the same time, the roadmap already for 26 is set where we're bringing in other capabilities and other channels because what we want to build. Is an agentic layer that sits on the top of a multi-channel platform where you would integrate with DSPs, you can integrate with social platform, the networks, and then you'd have an agent sitting on top that allows your media planning or a media buyer to come to that platform and say, I have this budget, I have uh, these products, and I have this objective and goal. 

[00:30:55] Bobby Watts: What's the most efficient and effective way for me to activate that campaign? So sitting at on [00:31:00] top of Edge, if you will, is what we're calling the one-stop ad shop. That then allows you to do a multi-channel media buy and then optimize that media buy in real time, and then get multi-touch attribution measurement on the tail end of that. 

[00:31:12] Bobby Watts: So not just single channel attribution measurement, but really looking across an omni-channel plan. I don't know where, how you see the world, but the way I see the world. But my team, as in media planning and in just channel orchestration, that's where I have a biggest opportunity. Because folks have grown up in the industry as a sponsored search expert, or they've worked in offsite, you know, at an agency or that those are the channels that they really know and they're really good at. 

[00:31:37] Bobby Watts: You ask them to sit down and build an omnichannel plan, look across multiple channels, and put together a proposal for our advertising partners that are gonna help them reach consumers across the full funnel. And it's like, that's, that's a, that's a lot to take on. Um, not that it can't be done and not that we're doing some of it manually. 

[00:31:55] The "one-stop ad shop" + agentic media planning 

[00:31:55] Bobby Watts: But it's, it's not the ideal way to do it. And so in this world that we live in [00:32:00] now, where we have some really cool tools ahead of us and this aren't, like, these aren't futuristic, like they're here now and we can leverage 'em now 

[00:32:05] Todd: Oh, for sure. 

[00:32:06] Bobby Watts: is like putting that layer of ag tooling on top of the edge platform to build off that one stop ad shop. 

[00:32:13] Tom: So one of the most interesting things that happened when we were talking at at grocery shop I was sitting with James Tenser actually, and we were saying, what would it be like if you just merged your JBPs between trade? And, uh, retail media and that sort of sent off a firestorm. 

[00:32:29] Tom: We're gonna be talking to some other people on the podcast about that. Because they, I heard about the Walmart, history where Walmart did that, said, oh, we're just gonna get rid of trade. And they lost a billion dollars worth of. Trade funds and it was tough to bring it back. Um, but you had an interesting response to that, which is it's, you, you could potentially put two in a box, something like that. 

[00:32:47] Tom: Like you could have both of the discussions, but you still have the same goals of like, you know, tell us, tell us your story about where you think trade and retail media sit. 

[00:32:56] Trade vs Retail Media: merging the JBP 

[00:32:56] Bobby Watts: Yeah. I mean, I mean, I'll even add a third one. You got shopper budgets [00:33:00] as well, right? So you get being, so I think there's, to me, there's. We're trying to shift the, the conversation to what we're calling as a customer engagement, um, kind of program or customer engagement. Reimagined is the way I've kind of talked about it, Tom, and, and to your point, we see that occurring through this two in a box approach, two in a box, being a category manager and a retail media lead for that particular partner. 

[00:33:23] Bobby Watts: So let's use. I don't wanna alienate anybody or spotlight anybody without permission. But like, let's just say we take one of our top laundry suppliers and we meet with them and we're gonna go through a, a, a business. 

[00:33:33] Tom: it still the same tiny cubicle because that's two in a boxes sweaty. I know. 

[00:33:37] Bobby Watts: No, it's not the same. It's, we call it a meeting room maybe, but the, and, and it is gotta be more than. It's gotta be more than that, but like typically the way it starts is we'll sit down and we'll talk about annual planning, right? So we're gonna sit down and build an annual plan with, with our partner, and that's inclusive of retail media and the commercial activation because it's like, what's in your innovation pipeline? 

[00:33:57] Bobby Watts: What are the key marketing tent poles that are important to [00:34:00] that partner? What are the programs that we're gonna run at each of the great local brands individually? But what are the programs we're gonna run across AD USA holistically? Um, so that we can have a scaled offering and then how are we amplifying those things with retail media? 

[00:34:13] Bobby Watts: But it, to me, it starts with what's the business plan, what's the commercial activation plan? Ultimately, a customer engagement plan that allows us to deliver something really cool and compelling that's gonna drive growth. As I said a moment ago, like our mission is to, to drive sales growth, volume growth, ultimately market share growth. 

[00:34:30] Bobby Watts: Uh, we do that by sitting down building great plans. Now that requires trade investment. That could require some shopper marketing programs and shopper marketing investment. And then we, we need the retail media there to support it as well as part of the plan. The retail media plan could be simply amplifying an innovation plan that the, the category merchants have. 

[00:34:49] Bobby Watts: It could also be the everyday, always on program because you gotta, you gotta, in every marketing world, right? You gotta have an always on strategy. How are you protecting, retaining consumers but also acquiring new? [00:35:00] And so we're working with the brand teams on that type of work as well. But for me, two in a box is us. 

[00:35:06] Bobby Watts: So the merchant and the retail media team sitting together side by side, locked arms, doing business planning with our partners. And that has to happen in the annual planning process, but also in the day-to-day motions, right? Because running a grocery business isn't like you just sit down twice a year, build a plan, and you're done. 

[00:35:22] Bobby Watts: Like no, there's this always on motion. What's happening in the business? I mean, we all know, I mean, we've got the government shutdown thing going on right now. We've got the potential SNAP stuff looming, and so the teams are scrambling even as we speak today. Like, how are we gonna help deliver additional value to consumers next week? 

[00:35:38] Bobby Watts: Well, great, well how do we talk about that? How do we use retail media to talk about that? Um, and that's not just, again, twice a year. That's always on type of thing. 

[00:35:46] Tom: Well, the, the thing that was interesting that we talked about as well, which I thought was, this honestly for me, was the most exciting, um, when you talked about just before that it's consumer management versus category management. Um, I was really worried [00:36:00] that retailers were gonna be sort of stuck in this situation where they wanna measure every. 

[00:36:04] Tom: Sale one-to-one, and they would be stuck with these six month, 2-year-old, uh, buyer or category audiences like we were, you know, way back in the 2020s. And so it's like, I'm interested in sort of your vision of how do you get that GLP-1 shopper? that whole story, I think was, I'd love for you to tell that again. 

[00:36:23] Bobby Watts: Yeah. So I mean, I've said this to others like, and I, it's a bit of a controversial point of view for anybody that, 'cause I didn't grow up in the media world, right? I gave you my background at the beginning of the call. Um, but for someone that's a legacy media buyer that's used to buying audiences and then activating that set audience. 

[00:36:40] Bobby Watts: Uh, to go out and activate media. That's the way media's been bought for decades, right? That's what people are used to doing. 

[00:36:45] Category management → consumer management shift 

[00:36:45] Todd: Yep. 

[00:36:45] Bobby Watts: My point of view is we don't need to do that anymore. It's an antiquated way and it's, it's quite honestly, you're using old data to target someone's behavior that may not be relevant anymore. 

[00:36:57] Bobby Watts: And I use the GLP-1 as one [00:37:00] example. And not to say, 'cause I mean obviously with HIPAA laws and things you can't do. You gotta be careful there. But I think. Just put GLP-1 aside. Let's just say in general, a consumer's shopping behavior changes so quickly, whether that's, whether they, you know, got, you know, a growing family, whether they picked up a pet. 

[00:37:16] Bobby Watts: Um, the dietary restrictions are now appearing whether they, all of a sudden, I'm allergic to peanuts or what, like things change so quickly with consumers. We know based on more recent shopping behavior. As I talked about before, grocery shopping happens at a very high frequency. We can use signals to get actually predictive around what consumers may likely purchase based on the signals we know and based off of other customers and how they've behaved, and why not use that to target consumers around a propensity to buy your products. 

[00:37:47] Bobby Watts: Versus saying, I want to target consumers based on six month old. And so for me it's like, how are we, and we're doing this is leveraging AI technology to use propensity modeling, to look for in-market shoppers, [00:38:00] target them with offsite media, then, you know, based on their propensity to actually buy versus again looking for lapsed category buyers. 

[00:38:07] Bobby Watts: Not that you can't use analytics to evaluate and understand those types of things if you're looking for insights, but do that after the campaign or even in flight of the campaign. If you don't need to use that as a starting point, you just narrow your reach down out of the gate for no real good reason. 

[00:38:22] Tom: Well, we were talking to Jeff Cohen over, you know, he's at Skai now. He was at Amazon and he was talking to us about Poppi and he is like, you create a a category on it. Amazon, um, and you can scale it out and other retailers, but they've been creating categories there. I think it's great to hear that Challenger brands can be working with an Ahold Delhaize, um, earlier on in the process because you can be predictive and, you know, if a prebiotic soda doesn't exist yet, you can't use that as a, as an 

[00:38:50] Bobby Watts: That's right. 

[00:38:51] Tom: yeah, I think that to me that's, that's what's most 

[00:38:54] Audience antiquation vs real-time behavioral signals 

[00:38:54] Bobby Watts: Well, even in your GLP one example, right? If you just use that as an example, consumers, you know, may have [00:39:00] been buying chips, they may have been buying cookies or snacks or all these other things, and all of a sudden in this past shopping trip, they switched over to. Protein, yogurt, and other, you know, more healthier options. 

[00:39:11] Bobby Watts: And they're not buying chips. So why would you wanna market them in the chip category or market them in cookie category? You need to market them in the categories that they're now looking to lean into and shop into. So. 

[00:39:22] Todd: I think it's interesting, uh, going back to the, to the JBP kind of discussion, which is that, you know, you all trying to have this merge kind of. Global, you know, OneStop shop media planning for whatever term investment planning for anyone to do is, is, um, as a guy who's new to retail media, I came from the traditional digital media side, right? 

[00:39:42] Todd: I'm like, when I sat down and started working with Tom, Tom started explaining this, well, there's the retail media plan and there's the JBP. I'm like, how do they not? They're one, they're one master. It's one budget On the other side, how is this not coordinated? And it's fascinating to me how many retailers. 

[00:39:57] Todd: Still keep them completely separate [00:40:00] and aren't linking them and aren't trying to do a holistic play. And maybe it's tooling, right? The lack of coordinated systems, um, right. To your point of trying to have a holistic view from in store in a traditional sort of commercial JBP trade perspective to. Other environments like e-commerce where retail media typically is. 

[00:40:17] Todd: And, and I agree with you, it's one journey and the systems are one. And the one that we kind of, we haven't really doven into, which is a, a pet project of Tom and I, which is really pushing for more in-store, um, retail media. And you guys now, right? 'cause that's a great example in-store retail media. Is that, is that trade or is that retail? 

[00:40:35] Todd: Right? Retail 

[00:40:36] Bobby Watts: Or 

[00:40:36] Todd: honestly. Or shopper. Right. And, and, and they're really all one and the same. And it's, it's, it's really, and, and we're psyched to hear your in-store media is a big part of what you're trying to do with retail media because Tom and I view it as it is really something that should take off and really make, you know, call it retail media, V two or V three, um, explode. 

[00:40:55] Todd: And so it's interesting 'cause I think that's kind of the nexus point, right? Well if it's, if it's standing, [00:41:00] if it's on the shelf, who owns that? Is it the JBP team? Commercial 

[00:41:03] Tom: Is it all, is it, is it, does it make sense to reshuffle the deck and just be like, anything that's a sign is media. And then the, the actual price promotion, how much you get on the shelf in terms of the skews, like is that trade versus the signage like. 

[00:41:16] Bobby Watts: I, I, for me, yes. I think so, Tom, but I, I, maybe just two quick reactions to what you said, Todd. I think, I think to just come back to your point around. Trade versus media versus, you know, the JVP and how, I think the, the biggest issue is you've got legacy organizational structures on the CPG side and on the retailer side, right? 

[00:41:36] Bobby Watts: You've got a, you've got a chief merchant, you've, who's done brick and mortar category management. You've got marketing team that's done enterprise marketing. You've probably got a digital e-comm team probably somewhere sitting inside of a retail organization. And then you own the CPG side. You've got the same, and then sometimes even more complexity inside of that. 

[00:41:55] Bobby Watts: But, and then there's trying to bring those all together. Oh, by the way, every CPG and every retailer has probably got [00:42:00] their own unique structures. And then, so then that creates, and then you've got legacy budgets that are sitting and run, run rates of particular areas. And so then you're asking people to shift dollars and move dollars around, which is never a popular conversation. 

[00:42:12] Why org design holds back true omnichannel 

[00:42:12] Bobby Watts: I, I gave the example. In our organization, have the chief merchant go up to the chief marketing officer and say, I need to move a million dollars over into my trade investment next year. The chief marketing officer's probably gonna ask a lot of questions and not just say, yeah, sure, no problem. Move the million, right? 

[00:42:27] Bobby Watts: Yeah. So I mean, and, and so like, and then, but in modern retail is, I like to think about it. That's why I keep coming back to this concept of customer engagement is. Those things all start to converge. To your point, there's one customer journey and your mission is to sell more products. How do you then capitalize on that journey with enterprise marketing, with retail media, with a commercial activation plan that's, you know, got trade and everything else involved. 

[00:42:53] Bobby Watts: 'cause it is one plan. Um, and that's, and you know, one of the thing changes we made, I don't know if we talked about this Tom, but. [00:43:00] We move digital merchandising, we move digital enterprise marketing into the retail media practice. That is my team. Like 

[00:43:06] Tom: Yeah. Is that, is that the same as like consumer insights or 'cause you, I heard that's also part of it as well. 

[00:43:12] Bobby Watts: I, I don't have consumer insights. I do have, um, loyalty from a offer execution standpoint, what we're doing with loyalty programs and, but the, the strategy of the loyalty program sits within our great local brands. But what I see and what I'm, what I see the vision for is like when, just as you described it, Todd, like there's a customer journey, right? 

[00:43:34] Bobby Watts: I wanna be able to map out all the customer journeys, and then I wanna be able to leverage technology to tell me when and how should I engage with that consumer. 

[00:43:41] Tom: Yeah. 

[00:43:42] Todd: Yep. 

[00:43:43] Bobby Watts: should I use? Where do they engage? Because if I'm serving them email and they don't ever open the email, then don't spend any money sending them email. 

[00:43:50] Bobby Watts: Let's send them something else. If they're engaging with offsite media, do I use enterprise marketing messaging or do I use a retail media campaign to do that? What's the most [00:44:00] efficient way to move that consumer down that journey that we're trying to move them to? And so by bringing the teams together, we can start to have that type of conversation with the technology that we're standing up to say, okay. 

[00:44:10] Bobby Watts: How do I then build out journey maps that allow me to engage with the consumer and do that through a commercial plan and do that with marketing and retail media versus siloed functions, talking to consumers, tripping over ourselves to talk to consumers and maybe even confusing consumers. 

[00:44:25] Tom: Yeah, the enterprise marketing, uh, came up in our discussion with Albertsons and it seems like that's a new tool in the, in the chest that, uh, that, that the retailers really had siloed off as well, at least when I was working in that, in that area. And so what's your perspective on that? 'cause. I'm, I'm actually trying, I might have like a lifelong journey to try to figure out how CTV fits exactly into retail media and I feel like enterprise marketing or potentially, you know, other, other sorts of brand, uh, budgets and things like that are gonna play a role there. 

[00:44:57] Tom: Where do you see all of that going? Like, 'cause you're already talking about [00:45:00] in-store, onsite and offsite. Do those higher funnel channels come in sooner or later? 

[00:45:05] CTV + full-funnel RMN strategy already live 

[00:45:05] Bobby Watts: they're to, they're already here for us. So we, as part of my retail media network, we, we stand behind a full funnel offering. So we, we offer CTV, we offer offsite display. We offer OLV, we're partnering with folks like chicory on, you know, recipe sites and things. And that is all in service of hitting that upper funnel awareness into consideration type area. 

[00:45:25] Bobby Watts: And then we have lower funnel tactics that we use every day. As you can imagine, onsite display, sponsored product ads, but for our retail media network. We're already offering CTV and we have a, we're talking to some folks about a pretty cool partnership coming up that, that we'll be able to share. And then also we offer the typical social media stuff as well, which I would put kind of in that upper media area as well with TikTok and, you know, meta and Insta and those folks. 

[00:45:47] Bobby Watts: I think they're not necessarily, I mean, there's some of those you could argue shoppable, and so that becomes a little more closer to lower funnel. But, um, for me, as I see it, Tom, like it's already there. Like it's not coming. It's there. [00:46:00] I think to Todd's earlier question and point is where the next wave is really getting in store, I believe firmly in, in store as well. 

[00:46:07] Scaling digital in-store media + connected store vision 

[00:46:07] Bobby Watts: Um, we've got, you know, a digital screen expansion that we're underway doing. We have. We worked with, uh, last year, we put out, you know, we, we partnered with Inmar to do our digital coupon business, but we also partnered with Inmar to do our in-store print program. So the shelf blades and floor stickers and things that wasn't just, Hey, happenstance, let's just like, we did that intentionally because we want to be able to connect the analog experience in the store to the digital experience. 

[00:46:38] Bobby Watts: And that's, that's a small way, um, of building out what I'm calling is the connected store, because to me, the connected store is about how do you digitize the shopping experience in the store? And that goes, how are we using signage in store from analyzing and digital? How are we using our native mobile app to create engagements with the consumer? 

[00:46:56] Bobby Watts: Whether that's wayfinding surprising, delighting with personalized offer at [00:47:00] shelf, using ESLs at shelf to, you know, as a, but there's, there's. There's ways, I mean, you know, like to me, like those are the things that from a, the next wave of retail media is how you digitize the store and connect the digital and brick and mortar experience. 

[00:47:16] Todd: How many stores will have, and, and maybe this isn't publicly available yet, but as you look at 2026, how, what percentage of your stores do you expect to have digital signage in? 

[00:47:25] Bobby Watts: It is not public knowledge, but let's just ballpark it with over half. 

[00:47:30] Tom: Oh, 

[00:47:30] Todd: That's, that's aggressive. That's awesome. Wow. No, no. We'll be we, I mean, this 

[00:47:34] Tom: We'll be excited about that in our. 

[00:47:36] Todd: oh, we're super excited about that. That's awesome. No, no. Half is aggressive because, you know, we, we, we, we talked, you know, with eMarketer and we've talked with others and the, you know, and Kroger, and Kroger is rolling out, you know, two stores right now, like two 

[00:47:48] Bobby Watts: We've got 15 now. And I, it's funny you bring this up because I was at Cannes. I was talking with, uh, Sean Cheyney from, at the time, and he was with Viststar at the time, but he, he asked the question to a group of [00:48:00] us and said, is 2025 the year of digital screens in store? And I was like. No, I think, no, I, no, I think 2025 will be the year of folks, you know, establishing proof of concepts. 

[00:48:11] Bobby Watts: And I, and that's what 2025 has kind of become, and I think 26 will be, folks will evaluate the proof of concepts and there'll be those that move faster. Um, and I think you'll see folks that'll go, you know, like, I mean, I'll be honest, hyvee, one day they went out and did, what was it, 10,000 screens, I think they announced. 

[00:48:27] Bobby Watts: Like, I think that's aggressive. I think that's aggressive. 

[00:48:30] Tom: that's 

[00:48:30] Todd: Oh, it's super 

[00:48:31] Tom: I was saying to Sarah, I was like, you need to go to the Midwest. That's, that's, that's where all the screens are 

[00:48:35] Bobby Watts: and I don't, and maybe that's right. I don't know if that's right or wrong, but I, I think for me it's like I would rather personally go out with a few screens per store and then make sure that demand is there, make sure consumer engagement response is there, and then think about where else in the store can I digitize the experience besides just putting up a 70 inch monitor someplace else in the store. 

[00:48:56] Tom: Well that's, 

[00:48:57] Todd: I mean, our. 

[00:48:57] Tom: yeah, that's the other thing in terms of like, what is the [00:49:00] creative experience for in-store? Um, and I, I'm really interested in, in who are those brands that are really like taking. In doing this, but is it a Vusion, you know, strip, uh, ESL strip, uh, on the shelf versus like you said, a 70 inch TV screen? 

[00:49:16] Tom: Because it depends. What are you trying to put up there? Are you trying to put what would normally be like a web banner or are you trying to put, you know, an influencer up there, or are you trying to put a six second or 15 second ad? Like, 

[00:49:27] Bobby Watts: Tom, you bring up a fantastic point. 'cause one of the things we continued to talk about, and even with all my chief marketing officers, so when I, I work with five of them, it always comes back to what's the store experience and what's the content strategy, the screen and the location of the screen. Like, let's pick, we can pick the right spots. 

[00:49:43] Bobby Watts: Data will tell us where the right places are based on, you know. How long someone dwells in a particular area, things like that. But, but really it boils down to, as you said, like what is the experience you're trying to create in the store, and then what is the use case of that component in that particular [00:50:00] experience, whether that's in aisle, whether that's perimeter or some fresh department, wherever. 

[00:50:05] Tom: To me, I hope that's what we figure out in 26, but. 

[00:50:08] Todd: well, part of it to me is as a longtime digital media guy, is there's gonna be a ton of innovation. In store. It is really the new landscape. It's like building web ads 20 years ago, right? We didn't have standards. We didn't know what banners should look like. Interactivity didn't exist, video didn't exist, all these things didn't exist. 

[00:50:24] Rethinking in-store creative: beyond TV screens 

[00:50:24] Todd: And that's kind of a fun stage when you get to invent stuff. And so that's really gonna be to Tom's point, like he's geeked out on some of these formats and things like that. And from, you know, my point of view is, and we've talked about this before, which is a in store is a unique landscape. That's very different from the walled gardens and really gives retailers a huge opportunity to develop in a way the walled gardens can't touch. Two, in terms of time spent, time spent in store has not gone down. It's, it's it, you know, yes, e-commerce has grown, but in store time has remained the [00:51:00] same and, and maybe even increased a little as people seek in real life experiences. And so we talk about this like we used to talk about digital not capturing its fair share of time spent in terms of media dollars, right? 

[00:51:10] Todd: Digital gone to 50 50 in terms of media impressions, but dollars didn't get to 

[00:51:14] Bobby Watts: Well, here's something else I'd offer to Todd is like every, and I guarantee you every retailer is on this journey. I don't know this definitively, you guys might know for sure, but fresh and growing your fresh departments and meal solutions and like center store is shrinking in general, right? And so for those CPG brands, they have to think about how are they gonna connect with consumers inside of the brick and wall, brick and mortar walls, because those physical pallet drops and things that used to be at plenty in a store, they're not as plentiful as they used to be. 

[00:51:45] Bobby Watts: Yeah, 

[00:51:45] Tom: Yeah. 

[00:51:45] Todd: Right. No, it, it, it's a ton of innovation changing. Mm-hmm. And so our point is like, oh, how is retail gonna capture? And so right now people say, oh, retail media only cap outside of the, the Amazon Walmart's, only 15% goes to the rest of everyone else. And I'm [00:52:00] like, yeah, but that 15% is gonna grow. 

[00:52:02] Innovation curve: 2025 proofs → 2026 expansion 

[00:52:02] Todd: Like the Dickens, especially is in store takes off because the amount of time and inno like the amount of time spent just dollars will flow to where people's eyeballs are. And as you build out these capabilities, and again, Tom and you talking about how there's gonna be a whole bunch of interesting experimentation, innovation coming here. 

[00:52:17] Todd: And so the orchestration, kind of the backend infrastructures, the, the wire and plumbing's available, that right, you can, you can push ads to whatever you, whatever screen you want to. Honestly, that's not the hard part. The hard part is kinda what you guys are talking about, the orchestration, what does it look like, the planning. 

[00:52:32] Todd: But anyway, we're super excited about 26, 27, 28 in terms as we go from two to 15 stores to half. Oh, 

[00:52:40] Bobby Watts: it just can't, it, 

[00:52:41] Todd: half is 

[00:52:41] Bobby Watts: it just can't turn into Times Square, no offense to Times Square, but you can't, you can't turn the store into like, you know, like just an, an ad bunch of ads popping, like there. You have to create theater. You have to create experience. You know, like it has to be something that's really engaging, um, for the consumer overall, not just screen here, screen there.[00:53:00]  

[00:53:00] Closing thoughts 

[00:53:00] Tom: Yeah, as long as it's something that helps you understand what to buy better, um, I'm all for it. Um, and it doesn't, you know, it doesn't need to be a million different screens and, you know, if it has to be that it's very coveted to be able to bid up and win that space or partner to get to that space in the, in the JBP, then all the better for you. 

[00:53:20] Tom: Right. 

[00:53:20] Bobby Watts: And even better if it ties to something that's actually going on in the store from a commercial standpoint, in my opinion. So if the merchants have a 

[00:53:28] Todd: integrated. 

[00:53:28] Bobby Watts: yeah, I agree. Yeah. 

[00:53:30] Tom: Cool. Well, this has been an amazing conversation. Um, I hope we get to do it again sometime, but we are at time, so thank you so much for joining us on the middleman. 

[00:53:39] Bobby Watts: Yeah. Thank you guys.  

[00:53:40] ​