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Transcript
Our transcripts are generated by AI. Please excuse any typos and if you have any specific questions please email info@digitalshelfinstitute.org.
Peter Crosby (00:00):
Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age. Hey everyone. Peter Crosby here from the Digital Shelf Institute. Are you tired of wasted ad dollars and subpar consumer experiences? Of course you are. The DSI partnered with LY to interview digital leaders and found that 71% of them from 78 consumer brands, say PDP Quality significantly influences their ROAS, what to do about it? Well, this is an audio rebroadcast of a webinar focused on just that, led by Lauren Livak Gilbert with guest experts, Russ Dieringer, founder and CEO of Stratably, and Claire McBride, VP Research and Education at Stratably.
Lauren Livak Gilbert (00:54):
What do PDP content and retail media have in common? The data says quite a lot. I'm personally very excited about this report because I think retail media is a really hot topic and we know as people who work on the digital shelf and a lot of the people who are attending today probably work on the digital shelf, that content is a really big part of retail media and PDPs are very much connected, and we need to have all those teams, all those conversations brought together to have a really comprehensive strategy. So like I said in the intro, this webinar is based off of a report that we did create. So please do scan the QR code and you can download that report. So for those of you who do not know me, my name is Lauren Leve Gilbert. I am the director of the Digital Shelf Institute. If you are a DSI member, thank you so much for being a member. We love seeing you on all of these webinars and I'm so excited to be joined by Russ and Claire from Stratably and I'll pass it to Russ to give a quick intro.
Russ Dieringer (01:53):
Yeah, thanks Lauren and hello everyone. Great to be with you all today and excited to share the results of this benchmark that we did with Lauren and Company over there for those unfamiliar with Stratably. We're an independent research firm that provides objective insights, benchmarking data, and forecasting to large and mid-size consumer brands that want to understand how the retail market is changing, what capabilities they need to be building and generally close that omnichannel knowledge gap inside their organization. We house all of our work@ably.com, so if you want to go check it out after the session today, that's where you can learn more. And Claire,
Claire McBride (02:32):
Thanks Russ, and thanks Lauren for having us. My name is Claire McBride, VP of Research and Education here at Stratably, writing the research, doing webinars like this, hosting share groups with brands. Love to get involved in all of that, and very excited to share some of the results of our research today with you all.
Lauren Livak Gilbert (02:49):
Great, thank you so much. And a few quick housekeeping items. If you have questions, please do type them in the q and a section of the chat. You can also use the chat to make sure you have any messages or if you want to talk to me or ask me a question you can get to me there as well in terms of what we'll be discussing, retail media, market overview and grocery outlook. So really some great data around where we're at from a retail media space, brands, current state of investments, where are they spending their money on retail media, how many retailers are they working with? The link between PDPs and retail media spend, how PDPs contribute to roas. Those two bullets are my favorite to dig into. And then PD P improvement opportunities and how you can use this report inside your organization to have bigger, broader conversations and really kind of bring all those teams together. So without further ado, Russ, how about you take us away?
Russ Dieringer (03:42):
Alright, great. So good stuff. So for this study, we got both quantitative and qualitative insights. On the quantitative side, we benchmarked 78 different CPG companies. We had good category representation, food, personal care, beverage, snacks, health and wellness, pretty widespread coverage. The participating company skewed towards the larger size. The average revenue across their business amounted to 4.6 billion. And we felt good about the quality of responses we were getting most commonly digital marketing managers, customer account managers, CDOs, CMOs, those types of individuals filling it out. So that was the quantitative side. And then we filled in the gaps in our understanding with qualitative insights, doing a dozen interviews with e-commerce and marketing leaders inside of those large consumer brands, all with a goal of trying to understand the link between PDPs and retail media better. So we both got both the quantitative and the qualitative insight to inform our perspective on this particular study.
(04:51):
So the first part to understand is just how critical retail media is to doing business online. And we can use Amazon as an example here. They're obviously the leader in retail media. Amazon's business essentially relies on its advertising component to be viable. If Amazon did not have its advertising business, then it simply wouldn't be as competitive as it is today or as big. And it is very big. We estimate that Amazon is larger than Walmart in the us and a big reason why is because it's been able to generate profits from its advertising business and reinvest those profits back into speeding up its fulfillment capabilities, offering competitive prices and so on. What this chart illustrates is the makeup of its profitability over the last couple of years. And as the callout suggests, going back even further in time since 2017, it earned an estimated 63 billion in ad profits compared to the 35 billion that it lost from its pure retail business.
(06:00):
And we see others echoing this remark like Doug McMillan at Walmart, where he talks about the retail p and l shifting as a result of new high margin business lines, including retail media and its analytics division. If you're selling into Walmart, you're likely have been asked to invest in Luminate and Luminate and Walmart Connect go hand in hand as a part of the business model to make walmart.com viable. Another good example from a numbers perspective is with Instacart, if we take that same operating margin assumption that we use for Amazon and we apply it to Instacart's business, its advertising division is estimated to have brought in nearly 300 million in profits in 2022 compared to 234 million in losses for the retail business. So putting it simply, Instacart wouldn't have been able to IPO if it hadn't been for advertising and it pretty much wouldn't be in business at this point.
(07:01):
And for Kroger similarly, just one more example here, Rodney McMullin has talked about seeing a future where digital ultimately offers the same margin profile as its store business because they have retail media and analytics offerings collectively what they call alternative profit streams. And you think about its digital business estimated to have around negative 6% operating margins, maybe steeper, but 1.2 billion in alternative profit streams helps to offset that. And so what we're saying with all of this is that you need to have a retail media business in order to make the economics of e-commerce work. If you're a retailer or a grocer in this case, if you don't have it, then it becomes essentially impossible to have a thriving digital business. Now on the next slide, what's interesting is when we think about how the grocery market is expected to evolve over the next several years, our forecast call for the market to grow about 2.8% per year between 2023 and 2027, which is fairly consistent with historical growth rates, but how that growth arrives is changing to a degree as online becomes a more important channel.
(08:16):
So in our forecast, we assume, and we think it's reasonable to do so, that online penetration is going to grow a hundred to 150 basis points a year between now and 2027. And when you make that assumption, that implies that physical stores over that timeframe are going to grow at 1.5% per annum while online channels are going to grow at 10.7% per year. So online far outpacing the growth of stores. And from a dollars perspective, that means that digital is projected to account for more than half of the total dollar growth between now and 2027. So even though in grocery online penetration might only be 10% of the market today, it's contributing a significant share of incremental dollar growth as consumers shift how they buy groceries. And while Amazon, Walmart, Instacart, Kroger have a thriving retail media business along with some others like Target as an example, there are real questions for middle to longer tail grocers that are trying to meet the consumer online.
(09:23):
Now, retail media network budgets for retail media are healthy and growing. In our research, 40% of brands are telling us they're planning to, I'm sorry, 74% of brands are telling us that they're planning to rapidly grow or grow their retail media budget this year. And on average, brands are investing about seven to 8% of their sales back into retail media and they're growing that percentage rate by about 50 to a hundred basis points each year. So if you're at 7% today, a year from now, you're going to be around seven point a half to 8% on average. And that pattern has been pretty persistent over time. So it feels like there's a lot of money to go around for a variety of retail media networks, but the issue is that consumer brands, the issue for grocers is consumer brands are concentrating their efforts with just a small number of retail media networks as this chart shows primarily the ones that we've talked about so far, Amazon, obviously Walmart, Instacart, Kroger, and Target to a degree if you're in grocery.
(10:33):
So while dozens of retail media networks have launched, even a new one launched last week, I think Wakefern announced a new one On average. Brands in our study are activating on just four to five networks. And so if you're one of these mid to longer tail grocers, you know, need to do retail media in order to be able to meet the consumer online and evolve as their shopping evolves. But there's just not a lot of money flowing in your particular direction. And so if you don't have the scale or the online traffic to attract a brand's attention, it's difficult to develop a thriving retail media offering. So Lauren, before we get into the factors, yeah, if you want to ask the polling question, then we'll get into the factors that drive allocation decisions.
Lauren Livak Gilbert (11:20):
Yeah, definitely. So we want to pull the audience we have here. Let's see, how many people do you plan to hire over the next year to be focused on PDP content? This will be interesting to see just based on what Rust has shared around where you're investing and what you're thinking about retail media and how it connects to overall PDP content in general. So if everybody could go back to their screen, take a look at the poll and put in a response. I am going to close it in 5, 4, 3, 2, 1. Okay, so it looks like 46% say no, one 38% say one to two people, 8% are three to four and six or more. So I feel like that kind of checks out on my side based on what I hear from brands. They're looking to hire maybe one or two people to focus on PDP content because it's a really big investment for them. How about both of you? Are you hearing anything different?
Russ Dieringer (12:21):
Same. I think that aligns with the benchmarking that we did I think maybe six or nine months ago where you have, you're adding maybe a couple people. I think content, as you know, Lauren is something that can be overlooked a little bit. I bet if we ask how many people are you hiring for retail media, it would be higher than that, but we're going to get into the linkage here. Okay, so let's talk about the different factors that go into how consumer brands make a decision to allocate budget to different retailers. The first of these is internal resources. So we always tell retailers when we get the chance to talk to 'em that activating on your retail media network is not a zero marginal cost activity for brands. They need the technology to do it, they need actual people to do it. Now, fortunately, brands have been hiring and building out that retail media capability, particularly over the last 12 to 18 months.
(13:23):
And in our research we found that they do want to expand to more networks as they've gotten that foundation in place, but they need the capacity to do so before they can expand size. And strategic importance is a very important element. A big reason why brands are working with the networks they're working with is that these are their biggest and their fastest growing accounts. So you think about Walmart size or Kroger size compared to a giant eagle, and I'm not knocking Giant Eagle, I mean it's a 12 billion business, but these others are such a larger scale opportunity for brands to put money to work. And these retailers because of their size and scale are going to have a lot more leverage over a brand and also just have more site traffic and more opportunity to put money to work in-store. Impact is a big one for brands too.
(14:21):
I think the whole promise of retail media is closed loop measurement. And so brands want to be able to influence not just the online shopper, but also shoppers that might be on digital channels, but ultimately buy inside of store. We just saw Walmart come out with its new sponsored search in store impact beta, which is helped going to illustrate that. So anything a retailer can do to close that loop, the better effectiveness and efficiency or reach and performance on effectiveness, brands need to put real money to work. So while they have added capacity and they want to expand in more networks, they still want to get some leverage out of it. So you need to, if you're a retailer or grocer, offer brands a real reach opportunity and that's onsite in terms of paid search. But it also explains why we're seeing more and more retailers form partnerships with the trade desk or media channels to extend their offset reach.
(15:20):
And then on efficiency, the ads obviously have to perform. It can be difficult for a brand to compare performance across retailers. It's very fragmented. There's limited standardization, but the main point being that brands need to be getting a return out of their spend. Now, I think right now effectiveness has been more important in a brand's calculus than efficiency. Meaning you could be a smaller retail media network, offer a great percentage return on ad spend, maybe because it's not as competitive as a site like Amazon or Walmart, but you're still going to have a tough time attracting dollars because the brand isn't able to put real money to work. So they're just not going to prioritize it, even if efficiency is really good. Number five capabilities. What type of ad units does a retailer have? Do the ads convert well? Do they have full funnel capabilities or is it relegated mostly to paid search?
(16:13):
Amazon leads the way here as you can imagine. And so oftentimes brands, when they evaluate a new network, they're looking for what does this retailer offer that's similar to Amazon? Or better yet, are there unique offerings that a smaller retailer has that maybe an Amazon or a Walmart can't do or haven't thought to do? And then measurement, do brands spending money with a retailer have conviction in the performance measurement? Amazon as a chart illustrates is leading the way here. They've come to market with really interesting tools such as Amazon Marketing Cloud, attribution stream and so on. This is an important one around measurement. And the more a retail media network can give a brand confidence in their measurement and bring new measurement innovation to market, the more brands are going to spend with them.
Lauren Livak Gilbert (17:03):
Hey, Russ, question on that one. Do you think with the new standards that came out with the IAB and the MRC that this is going to change the way retailers are thinking about measurement and maybe make some of the smaller ones maybe more appealing because there's a standardization and so it's easier to invest or brands understand what they're getting into. Do you think that will have an effect on some of these factors?
Russ Dieringer (17:23):
I think it's definitely a positive effort and a positive direction to take because it's a well-known issue around the fragmentation and the lack of standardization. What does a click mean or things of that nature. So I think that is a net positive, but what I would encourage retailers to think about is that's almost like a starting point. And then it's what type of measurement can we offer, particularly if you're a mid to a longer tail grocer, what can we offer that is uniquely demonstrating the value of our retail media network? So I think it's a positive, it'll allow brands to compare. Hopefully you compare favorably if things get standardized, half will, half won't. But then it's like, all right, what can we do beyond that? And I point back to Walmart in-store attribution. Are there unique ways to tie in in-store influence or just something that's a little bit different that Amazon can't do?
Lauren Livak Gilbert (18:22):
And one other quick question from the audience, I am not sure if we covered this in the beginning, but I want to make sure we clarify. Were there any European grocers included in the research or was it just North America for the data
Russ Dieringer (18:36):
In terms of the benchmarking of the consumer brands? Claire, maybe you can chime in. Do you recall? It was mostly, it was mostly the US market, but Claire, I can't recall if there were any European brands.
Claire McBride (18:48):
Yeah, most of the benchmark questions didn't ask specifically about specific retailers, but rather kind of the linkage between PDP content and retail media broadly in terms of respondents that would've been largely US digital leaders inside, sometimes global consumer brands, but kind of the US digital leaders answering that benchmark, if that makes sense. This as an example, like this benchmarking data that is a little bit more retailer specific. This is some of Stratably's other research, which again is largely typically US focused in terms of who is answering the benchmarks. Hopefully that helps.
Russ Dieringer (19:29):
Yeah, so I would say for if there's European attendees on the line or Asian attendees on the line that you could think of this mostly as sort of a US focused report and presentation.
Lauren Livak Gilbert (19:43):
Thank you.
Russ Dieringer (19:45):
Okay, last factor in our work P DB quality. And that's what we're going to spend the balance of time talking about brands. Rightfully so, they don't want to spend money driving a consumer to a lousy PDP. So if a retailer can't deliver strong PDPs, whether it's accuracy or the general formatting of them, or if they just don't convert, it's going to be pretty difficult to get brands excited about spending money with you. So that's the last part of my first section of the webinar. I'm going to turn it over to Claire in a minute, but Lauren, you have another polling question, then we'll hand the baton to Claire.
Lauren Livak Gilbert (20:19):
Yes. So one more polling question. So go back to your computer and answer this one for us. How does your company prioritize PDP and retail media capabilities? So as we dive into understanding the connection between PDP content and retail media, we want to understand where that prioritization comes from because it will be very interesting to see what teams are on the call and where you spend your time. So if everybody could go back to their computer, pop on the poll and just give us a quick vote so we can get a perspective here. I am going to give everyone a couple seconds and close it in. 5, 4, 3, 2, 1. Here we go. Alright, so it looks like we have 49% said retail media gets more of our attention. I feel like that checks out for me because that's a lot of where the budget is then 28% both get an equal amount of love.
(21:18):
I love that. I think that's how it should be. 18% PDPs get more of our attention, 5% we're not doing much with either. So I feel like based on those results and the conversations I have with brands, there's a large budget behind retail media spending with Walmart and Amazon is in the millions of dollars and content creation, there's definitely money behind that, but e-commerce is still, I think in some organizations up and coming. And so new investment, new research behind needing more investment is a conversation that needs to happen. Claire, Russ, what do you think about this?
Russ Dieringer (21:54):
Yeah, I think part of it's related to retail media is sort of a newer element of e-commerce. And so it is getting a little bit more attention and the budgets are a little bit bigger, but again, you need both. They go hand in hand.
Lauren Livak Gilbert (22:11):
All right, I'll hand it off. Sorry. Go ahead, Claire.
Claire McBride (22:13):
We'll share our research, which should hopefully encourage a little bit more of that balancing out because just as Russ said, we don't want to spend money to drive to A PDP that doesn't look any good and doesn't do what we need it to do for the consumer, which is where we're going to focus the remaining of our time here today. So that seventh consideration that Russ mentioned all about PDP content and in our research that was the original question, Hey, does this matter within retail media investment decisions? And the answer is yes, it does play a role and it's exactly the reason is exactly what Russ described. It makes no sense to spend what our limited retail media dollars, pretty precious dollars for you all to drive a consumer to A PDP that ultimately is not going to convert. And so you'll see here we asked how much does the completeness and the accuracy of your PDPs influence the amount that you spend? And those hot pink bars there, 67% saying it has a moderate, significant or full influence over the amount that you spend on a media network. So roughly two thirds of brands are day in and day out looking at PDPs and concert with retail media as they go to fund retail media.
(23:35):
Some more specifics here, 74% say that they're assessing PDP content quality before investing incremental dollars into a retail media network that they're already invested in. Another 74% are looking at PDP content quality before investing into a new retail media network. And then within a particular retail media networks budget, 66% of brands are allocating more ad spend to those products that have higher quality content. On the flip side of that, 50% of brands said that they've reduced ad spend on a product due to poor PDP content. So again, these really kind of high numbers are showing, yes, brands are looking at this, it makes sense to not waste those dollars on a PDP that is not really serving the need to convert the customer.
Lauren Livak Gilbert (24:33):
And Claire, I feel like this also speaks to the fact that if your retail media network team is not talking to your content development team, that is a big gap that needs to be closed because if your PDP doesn't have the right images, the right descriptions, the right enhanced content, then you're not driving to a conversion and you're not actually having that ad be worthwhile. So making that connection, I feel like is a big piece of this as well.
Claire McBride (25:00):
Totally. I think from a brand's perspective, a lot of this research kind of culminates in, okay, those teams need to be working together. I think that's the big call to action and there's still an opportunity there. So I think I would caveat these benchmarking numbers with a lot of anecdotal feedback that we heard within the interviews of, Hey, in theory this is how it should be on paper. It makes a ton of sense to make sure that those PDPs are buttoned up before we spend. In reality, not every brand is doing this. It's not kind of fully buttoned up 100% of the time. There's maybe some good moments, but then also a lot of hiccups along the way of, oh gee, something fell out a date within this PD DP, or, Hey, we did this major refresh. The PDPs across the board aren't looking very good, but we're not kind of the retail media spend is not being adjusted reflectively.
(25:58):
And that is exactly what Lauren is saying is that, hey, those teams are just sitting in two different silos and not working together enough. And I think processes is a big thing as well and speed. So a lot of times the kind content creation side of things, that timeline can be rather lengthy versus oftentimes moving at a quicker speed within retail media. And so aligning those timelines and processes is difficult. Or it can also be that both of those functions are kind of sitting in their silos and running at breakneck speed, but sometimes just in parallel to one another or in directions. So we know PD DP content, that kind of optimized PDP is always a bit of a moving target. You're always iterating upon that content or you should be, it shouldn't be a set of and forget it things. So kind of navigating a lot of real-time changes on the content side with real-time changes on the retail media side, it can be challenging to marry up. So in theory, it's simple. In actuality and practice it can be difficult, but I think that's the opportunity for brands that we want to highlight. Highlight today.
Russ Dieringer (27:15):
I would say too, I just chime in is I does feel like anecdotally brands have gotten pretty good at closing these silos on new products and new product launches. I feel like there's been a lot of improvement in that in the last couple of years. I think there's, but there are a lot of skews and ASINs out there that have been in the market for a while and getting the same degree of cohesion between PDP and retail media. I think that's been a little bit more challenging, particularly for brands with a huge number of skews that can be particularly challenging.
Lauren Livak Gilbert (27:51):
But use this data, take it internally, have a joint conversation as Claire keeps presenting, there's going to be so many great numbers and nuggets that you can take internally to really bridge those gaps and really help be the catalyst. So go ahead Claire, take it away.
Claire McBride (28:06):
Totally. This quote is just one example that we heard within one of our interviews of quite literally saying, Hey, Instacart came to them. Hey, we want you to invest in Instacart ads. Maybe they went through a lot of the other criteria that Russ covered and it's a great opportunity, but at the end of the day they said, Hey, our catalog looks very, very messy. And so before we invest a dollar, we're going to partner up with Instacart to really get this catalog cleaned up. They were able to see really meaningful results just on the organic front from cleaning up those PDPs and ultimately improving conversion that made them feel much more comfortable of, okay, we know these are in a good place. We know that they're working hard for us already. Now let's double down and put some paid media spend behind it.
(28:58):
And this is the RO ads formula as we've called it in this report, which really just unpacks, okay, why does content and catalog matter within retail media? So on the left hand side of the slide, if you're looking at advertising performance, which most commonly it is looked at from a ROAS standpoint, you first need the ad to connect to the right shopper, right? So right ad, right shopper need it at the right place and at the right time. If you can do that, then you get them to the PDP and it turns into a game of conversion and that ultimately is what's going to get you your return on that ad spend. Now, price, buy box and stock of course are critical in order for you to capture that conversion. But listing content ratings and reviews, catalog management of course just as important to drive the conversion. So that's really where it plays, where it plays in here. If you whittle it down to where you're getting your return, again, on what are very limited retail media dollars, this is why PDP content plays such a big role.
(30:09):
And then we have a couple more stats that just quantify from the brand's perspective how PDP content really is impacting roas. So 71% again in the hot pink bars say that the quality of PD DP content either significantly or very significantly influences roas. You'll see on the next slide, 83% indicate that ROAS improves as PDP content improves again with conversion rates being the strongest link between the two. A small caveat here is that, and Russ touched on it earlier and Lauren measurement can be challenging. Just retail media measurement can be challenging. I think PDP measurement and just set aside the retail media piece looking at, hey, overall sales lift, it can be hard to really distinguish, hey, this improvement to PDP is what drove a change. And so then you put that together. We really want to measure the impact of PD DP improvements on roas.
(31:14):
It's not perfect. So this, in the previous slide we talked, we asked about upside. If you do an improvement to the PD P, do you see an improvement in ROAS here? We asked about the downside. Have you ever seen a decrease in ROAS for an ad connected to an incomplete PDP 41% saying yes, which is kind of in line with what you'd think 47% saying, not sure. And we interpret that as it can be hard to truly measure and tick and tie these two things. And so like Lauren and Russ's comments earlier, just more of an effort around reporting in general and getting our arms wrapped around performance as an industry that'll continue to make this a little bit easier. But also in the meantime, you got to be kind of okay to a degree of not less than perfect kind of measurement and ticking and tying of these two things.
(32:15):
Switching gears a little bit, I think these data points were super interesting when they came back to us. If you think back to Russ's list of investment criteria for retail media, one of them was performance, which we certainly just talked about. One of them was reach as well as size of the retailer or size of the retail media network. Of course, if the retail media network has a very, very expanded and impressive reach, that's going to get the attention of marketers that are looking to spend those retail media dollars. But nearly a third of brands, 31% of brands said, I will consider investing in a retail media network if the PDPs are excellent, even if the reach is lower. And again, this is interesting because most of those larger retail media networks are just naturally going to win the budgets, but this kind of illuminates the opportunity for smaller and newer retail media networks. Now, again, it's never just one thing. So this might not be enough to overcome shortcomings in other areas, but I think this is interesting that brands are excited to invest into a platform that helps make their brand look good. And that's really what this is. If the retailer, if it's low reach, but if they have a really great and impressive PDP content, it's going to help make that brand stand out.
Lauren Livak Gilbert (33:38):
I think I often get a lot of questions from brands around how do I create a prioritization framework or how do I decide how to invest in a specific retailer? These are some really great data points. Are you looking at their PDP content? Are you looking at their reach? Are you looking at how you're engaging with them? And same on the retailer side, if we have any retailers on the call when you're working with brands knowing that these are the factors that they're thinking about. So I just point that out because a lot of brands are trying to figure out what this prioritization strategy or formula or magic formula is, but this is a really big piece of it to consider because it does drive conversion if you have a better built out PDP.
Claire McBride (34:21):
Totally. Yeah. I think some of the most impactful for brands, some of the most impactful things that came out of the research was just those in a concise and digestible way, bringing some clarity around, Hey, ultimately what should you be looking at when you think to invest or not? Those seven things that Russ talked through at the beginning, and here we'll kind of dig into the PD P piece of it. And then I think the next step is, so there isn't a one size fits all prioritization framework per se, but the next step is taking that list of seven, marrying it up against your specific goals. And so depending on your goals, hey, in-store impact might be huge, huge, huge. Maybe you give that kind of a higher ranking so to speak, in terms of these different criteria or maybe reach is really important or anything else. So I think it's taking that list for starters and then kind of boosting up or boosting down some of the criteria just based on what's most important to you.
(35:31):
So a third of brands say, if PDPs are great, maybe we'll invest even if reach is pretty low. And this is one of the reasons why. So a large majority of brands, 89% of brands believe that richer and more accurate PDPs attract a higher quality audience within on that retailers platform. Higher quality meaning more loyal, meaning willing to spend more, et cetera. And so the idea here is that you'll ultimately get to better performance. Maybe the absolute reach numbers are lower, but if it's a highly engaged audience, very high quality, you'll get to a strong return from that investment as well. And I think this is increasingly important as brands continue to mature on the retail media front, they're getting more thoughtful and smarter about how they spend. And so maybe five or 10 years ago, it was kind of this wide spray and pray approach to retail media.
(36:38):
Brands are eager to know a MC is helping here and Luminate is helping here. They really want to know, Hey, what do the customer dynamics look like inside of these purchases? And who is loyal and who's repurchasing 3, 4, 5 times for me? And that's where I want to focus my spend. And so if the PDP as the benchmark is suggesting if the retailer can put a strong PDP in front of the consumer and that can help just up the quality of the audience that is as the benchmark suggests, kind of really helping those maybe smaller and newer networks gain some attention from brands.
Lauren Livak Gilbert (37:23):
And Claire, just to double click on that, when you said that the brands are really eager to get that information, I also think they have to because, excuse me, from a profitability perspective, brands and retailers are focused on profitability, right? Everybody's feeling it on every side. So brands now need to really understand where they're spending their dollars and where it's going to make an impact. So I see this broader theme of profitability across the industry, and that is translating very heavily to retail media and to data in general to say, are we making the right choices? We need to make them now, and we can't afford to make incorrect choices. So it's just really interesting to see that tied with that overarching theme of profitability that we see across all of our brands and retailers.
Claire McBride (38:07):
Totally, I think very well said here is where either brands are focusing first on their content or they would like and or they would like their retail partners to focus on first. So we asked which elements of A PDP are often lacking or inaccurate on grocer platforms? 73% said images, 64% said product descriptions, 58% said videos. Now I would've actually expected ingredients and nutritional information to be higher up on this list. So you'll see those are the last two things. When we were doing our interviews anecdotally, we heard some instances of, in some cases the link between PDP content and retail media is strongest when the PDP is incorrect from an ingredients or a nutritional information standpoint, particularly if the inaccuracies is posing some legal risk to the brand. And so my earlier comments of, Hey, in theory it makes sense to marry them up perfectly.
(39:15):
In actuality it's harder to do that. It is more of a hard and fast rule of we're not going to spend if the PD P is bad, that's more hard and fast when it's related to ingredients, nutritional information, safety information, that type of stuff. So it's interesting to see it lower on the list. I'm hoping that that means in the rare instances we have a bad PDP from an ingredient standpoint, we're definitely stopping spend, but maybe that's just more rare than not. And by and large, the retailers are keeping up with that, which would be great, but these findings can be taken a couple different ways. If you're a brand and you're looking at this, if you're kind of overwhelmed by all of the things you feel like you need to do to get your content in shape, this benchmarking can give you some clues on where your biggest needle movers may IE images and product descriptions.
(40:09):
And then if you're a retailer, these are the first few areas you want to focus on to ensure your capabilities are robust and by robust capabilities, it not only means, Hey, let's give the brand the ability to upload a robust set of images as an example, but just as important is the infrastructure for them to keep those up to date and accurate. Again, back to those interviews in our broader research, we hear of so many just headaches from the brand side of, Hey, this content keeps reverting back to old content that we don't want anymore. We see an inaccuracy and it's so hard to get it fixed. It takes so long to get it fixed. And those headaches, I would say those are some of the biggest headaches that we hear about just in talking to e-commerce leaders broadly. And those headaches aren't going to make you want to dive in and invest money with that retail media network. And so if you're a retailer, again looking to build out that retail media network and secure more funds, these are some of the areas that you want to focus on from a content standpoint and the infrastructure being just as important as the front end PDP checking the box in terms of the different attributes that you have.
(41:30):
Any questions for now before I close it out with some takeaways and action items?
Lauren Livak Gilbert (41:36):
We had a question. I was trying to pull up this slide quickly, but maybe Claire, you can just clarify as we went through all that data, the size of the data pool, how many people you interviewed, and then how many people were in the survey. And I don't know if Russ, you know that off the top of your head or Claire
Claire McBride (41:51):
74, right? Benchmarked I think, and then a dozen qualitative interviews.
Lauren Livak Gilbert (41:57):
Perfect. Thank you Claire.
Claire McBride (41:59):
So some takeaways and action items for brands on this slide and then we have a slide for retailers next. Again, we've been talking about it, but really for brands it's all about breaking down those silos and bringing these teams together. So for starters, as Lauren already said, Hey, start by sharing this report to all of those relevant teams. I think that's why we wanted to do this research. We hear about the challenges as we talk to digital leaders and sometimes just to bring in some outside research that can really help open up the conversation on why a topic like this is important, but really organic, paid digital shelf, all of these teams need to be aligned in terms of content and campaign. And again, this can be easier said than done. So Russ mentioned, Hey, we're moving along and getting better from a new product standpoint.
(42:53):
That's a perfect example of let's start somewhere. Let's start with the biggest fish. And so I would encourage you if you are seeing this and seeing this data and listening to us and saying, yes, this all makes sense, but gee, I just think this is an uphill battle inside my organization. Start with the 80 20 rule. That can be, hey, an easy place to start is new innovation. If you've already done that, look at biggest, best sellers, kind of biggest products within your own p and l and the products that you're just most spending the most heavily on from a retail media standpoint. Those are the places to start in terms of getting campaigns and content aligned. The more mature next step, if you're already doing a good job with maybe a select portion of your catalog is really at a higher level, building out that digital strategy that's going to acknowledge all of the different touch points a consumer may have with your brand, whether it's organic, whether it's on the server, on the PDP across the digital ecosystem. How is the consumer interacting with my brand and how are we making sure that we're all working together? Again, a lot to unpack that can encompass a lot of different things, but in this context, a great place to start is just again, looking at the infrastructure that's underpinning content and underpinning retail media and how can we better align those so that we're aligned from the start rather than kind of these bandaid patches and aligning as an afterthought, which I think is where a lot of brands are today.
Lauren Livak Gilbert (44:34):
Just putting, oh, sorry, go ahead, Claire. Keep going.
Claire McBride (44:37):
Last bullet point is just to use this data with your retail partners. And so if you're advocating for more content support and your retailer is kind of shrugging it off, bringing in the retail media business into the conversation is really a great way to get those retail partners to lift their heads up. Like Russ said, this is where the money is. They need this retail media business to do digital profitably. And so bringing the retail media conversation into the mix in order to get the progress that you want on content, I think that's a great place to start. Or otherwise just justifying, hey, we can't spend right now, right? If you're a brand, every retail media network is knocking on your door for funds, and so you don't have enough funds to give everyone. And if one of those retail media networks is asking for funds and the PDP content quality is not there, a good place to start is, Hey, let's clean it up. Or even before that, it's, Hey, we can't spend right now because the content isn't where it needs to be and this data can kind help validate that.
Lauren Livak Gilbert (45:43):
Perfect. The only thing I was going to say, Claire, is to your point about bringing that data into your organization for all the brands on this call that you've been having this conversation so many times, this is the point where you can take this data to your leadership and say, listen, this is what everybody else is doing and this is what we're seeing in the industry and this is the direction that it's going. So I know from putting my old brand hat on, you always needed external research to help showcase the changes. Yes, I agree, Russ. So please use this research, download the report, you can find the link in the chat and share those data points to help the conversation and bring everyone together and just begin figuring out internally how to bridge those gaps if you haven't already.
Claire McBride (46:26):
Absolutely. One more slide for the retailers. I mean, if you're listening to this and you're inside their retailer organization, it's really just the other side of the conversation. And so if you're looking to grow your retail media network, if you're struggling to win dollars from brands, again, if you're new or smaller and therefore lacking in some of the other investment criteria areas that Russ mentioned earlier, this can be your opportunity to overcome some of those other shortcomings or even just for better or for worse, just to have a seat at the table and entertain the conversation with brands. As we mentioned, many brands just consider this to be table stakes, to even have a conversation about investing. And so identify the gaps that you have in the world of content, whether it's technology, whether it's processes, whether it's people resources, identify the gaps and build your roadmap to elevate the content up to brand standards, up to maybe competitive retail media network standards that we know are larger and are winning more funds.
(47:33):
And I would say share that roadmap with brands to the extent that you can. But even if content, even if your content capabilities aren't at a perfect place today, just letting them know that yes, we're working on this. Yes, we hear you and we agree that it ties into retail media and we want the PDP to work the hardest for you. That will go a long way for brands. And then we touched on it already, but the data piece of it is important as well. So the more and unique customer specific data transaction data that you can share with brands that allows them to effectively improve the PDP that allows them to spend in a smarter way to see greater performance, that's ultimately what is going to unlock more dollars for you within the retail media network. And within that, like we mentioned, they also need data. Brands need data just to truly be able to understand what does performance look like. And so hand in hand with those content capabilities is, Hey, what do our reporting capabilities look like? What are we sharing back with brands again, because some of that unique data is going to get brands excited and then back to the table stakes. For starters, they just need to know how the investment is performing for them.
(48:54):
That's all I got. Hopefully helpful. Hopefully the action items help bring it home a little bit more. And Lauren, I'll turn it back to you.
Lauren Livak Gilbert (49:01):
Great. Thank you so much Claire. So if you have questions, throw them into the chat. A couple quick closing slides. If you have not registered for the summit in Nashville, please do come. Russ and Claire will both be there. Russ is on main stage keynoting, and Claire has an awesome session about centers of excellence. I will be there as well, and I would love to meet you in person, scan the QR code or send me a note if you need a link to buy a ticket. It is April 8th to the 10th in Nashville, Tennessee. Can listen to some really great country music and if you want to hear from ably, please do scan their QR code to get access or you can click on the link when I share out the slides if you want to get in touch with them or read their awesome content that they put out.
(49:42):
If you are not a member of the DSI, please join. We would love to have you as a member. You can see all of the great content that we put out. So scan all these QR codes. You will have access to this recording by email after this webinar. It'll probably take a couple days and it'll be popped up in your inbox and I can also share it with you if you did not receive it. Alright, well Russ, Claire, thank you so much for sharing your insights. Thank you for collaborating on this report. I really do think that this is monumental for the industry connecting content and retail media, so really excited to have you. Thank you so much for being here today.
Claire McBride (50:17):
Thank you Lauren. And thanks everyone.
Peter Crosby (50:19):
Thanks again to Russ and Claire for sharing their expertise and their partnership in the research with us. The full research paper, the role of PDPs retail media budget decisions is available on the resources page using the research filter at digitalshelfinstitute.org. Become a member while you're there. Thanks for being part of our community.
