[00:00:00] Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
[00:00:16] Hey everyone, Peter Crosby here from the Digital Shelf Institute. Are you tired of wasted ad dollars
[00:00:21] and subpar consumer experiences? Of course you are! The DSI partnered with Stradibly to interview
[00:00:28] digital leaders and found that 71% of them from 78 consumer brands say PDP quality significantly
[00:00:35] influences their ROAS. What to do about it? Well, this is an audio rebroadcast of a webinar
[00:00:42] focused on just that led by Lauren Levak Gilbert with guest experts Russ Derringer,
[00:00:47] founder and CEO of Stradibly, and Claire McBride, VP Research and Education at Stradibly.
[00:00:54] What do PDP content and retail media have in common? The data says quite a lot. I am
[00:01:00] personally very excited about this report because I think retail media is a really hot topic
[00:01:05] and we know as people who work on the digital shelf, and a lot of the people who are attending
[00:01:10] today probably work on the digital shelf, that content is a really big part of retail media
[00:01:15] and PDPs are very much connected and we need to have all those teams, all those conversations
[00:01:21] brought together to have a really comprehensive strategy. So like I said in the intro,
[00:01:25] this webinar is based off of a report that we did create so please do scan the QR code
[00:01:31] and you can download that report. So for those of you who do not know me, my name is Lauren
[00:01:37] Levak Gilbert. I am the Director of the Digital Shelf Institute. If you are a DSI member,
[00:01:42] thank you so much for being a member. We love seeing you on all of these webinars
[00:01:46] and I'm so excited to be joined by Russ and Claire from Stradibly and I'll pass it to Russ
[00:01:51] to give a quick intro. Yeah, thanks Lauren and hello everyone. Great to be with you all today
[00:01:56] and excited to share the results of this benchmark that we did with Lauren and company
[00:02:00] over there. For those unfamiliar with Stradibly, we're an independent research firm that provides
[00:02:05] objective insights, benchmarking data and forecasting to large and mid-size consumer
[00:02:11] brands that want to understand how the retail market is changing, what capabilities they need
[00:02:16] to be building and generally close that omnichannel knowledge gap inside their organization.
[00:02:21] We house all of our work at Stradibly.com so if you want to go check it out after
[00:02:26] the session today that's where you can learn more. And Claire? Thanks Russ and thanks Lauren
[00:02:33] for having us. My name is Claire McBride, VP of Research and Education here at Stradibly.
[00:02:38] Writing the research, doing webinars like this, hosting shared groups with brands,
[00:02:43] love to get involved in all of that and very excited to share some of the results of our
[00:02:47] research today with you all. Great, thank you so much and a few quick housekeeping items.
[00:02:52] If you have questions, please do type them in the Q&A section of the chat. You can also use
[00:02:57] the chat to make sure you have any messages or if you want to talk to me or ask me a question
[00:03:02] you can get to me there as well. In terms of what we'll be discussing, retail media market
[00:03:07] overview and grocery outlook so really some great data around kind of where we're at from
[00:03:12] a retail media space. Brands current state of investments, where are they spending their money
[00:03:16] on retail media? How many retailers are they working with? The link between PDPs and retail
[00:03:22] media spend? How PDPs contribute to ROAS? Those two bullets are my favorite to dig into
[00:03:27] and then PDP improvement opportunities and how you can use this report inside your organization
[00:03:33] to have bigger broader conversations and really kind of bring all those teams together. So
[00:03:38] without further ado, Russ, how about you take us away? All right great so good stuff. So for
[00:03:44] this study we got both quantitative and qualitative insights. On the quantitative side
[00:03:49] we benchmarked 78 different CPG companies. We had good category representation, food, personal
[00:03:56] care, beverage, snacks, health and wellness, pretty widespread coverage. The participating
[00:04:04] company skewed towards a larger size. The average revenue across their business amounted
[00:04:10] into $4.6 billion and we felt good about the quality of responses. We were getting most
[00:04:15] commonly digital marketing managers, customer account managers, CDOs, CMOs, those types of
[00:04:21] individuals filling it out. So that was the quantitative side and then we filled in the
[00:04:26] gaps in our understanding with qualitative insights doing a dozen interviews with
[00:04:32] e-commerce and marketing leaders inside of those large consumer brands all with a goal
[00:04:36] of trying to understand the link between PDPs and retail media better. So we both got both
[00:04:42] the quantitative and the qualitative insight to inform our perspective on this particular study.
[00:04:51] So the first part to understand is just how critical retail media is to doing business
[00:04:58] online and we can use Amazon as an example here. They're obviously the leader in retail media.
[00:05:04] Amazon's business essentially relies on its advertising component to be viable. If Amazon did
[00:05:12] not have its advertising business, then it simply wouldn't be as competitive as it is today or as
[00:05:18] big and it is very big. We estimate that Amazon is larger than Walmart in the U.S.
[00:05:25] and a big reason why is because it's been able to generate profits from its advertising business
[00:05:31] and reinvest those profits back into speeding up its fulfillment capabilities,
[00:05:36] offering competitive prices and so on. What this chart illustrates is the makeup of its
[00:05:41] profitability over the last couple of years and as the callout suggests going back even further
[00:05:46] in time since 2017, it earned an estimated $63 billion in ad profits compared to the $35 billion
[00:05:54] that it lost from its pure retail business. And we see others echoing this remark like Doug
[00:06:03] McMillan at Walmart where he talks about the retail P&L shifting as a result of new high
[00:06:09] margin business lines including retail media and its analytics division. If you're selling into
[00:06:15] Walmart, you likely have been asked to invest in Luminate and Luminate and Walmart Connect go
[00:06:20] hand-in-hand as a part of the business model to make walmart.com viable.
[00:06:27] Another good example from a numbers perspective is with Instacart. If we take that same operating
[00:06:32] margin assumption that we used for Amazon and we apply it to Instacart's business,
[00:06:37] its advertising division is estimated to have brought in nearly $300 million in profits in 2022
[00:06:45] compared to $234 million in losses for the retail business. So putting it simply,
[00:06:52] Instacart wouldn't have been able to IPO if it hadn't been for advertising and it pretty
[00:06:57] much wouldn't be in business at this point. And for Kroger, similarly just one more example
[00:07:03] here, Rodney McMillan has talked about seeing a future where digital ultimately offers the same
[00:07:09] margin profile as its store business because they have retail media and analytics offerings
[00:07:15] collectively what they call alternative profit streams. And you think about its digital business
[00:07:20] estimated to have around negative 6% operating margins maybe steeper but $1.2 billion in
[00:07:27] alternative profit streams helps to offset that. And so what we're saying with all of this is that
[00:07:35] you need to have a retail media business in order to make the economics of e-commerce work
[00:07:40] if you're a retailer or a grocer in this case. If you don't have it then it becomes
[00:07:44] essentially impossible to have a thriving digital business. Now on the next slide,
[00:07:51] what's interesting is when we think about how the grocery market is expected to evolve over
[00:07:56] the next several years, our forecast call for the market to grow about 2.8% per year between
[00:08:03] 2023 and 2027 which is fairly consistent with historical growth rates but how that growth arrives
[00:08:11] is changing to a degree as online becomes a more important channel. So in our forecast we
[00:08:17] assume and we think it's reasonable to do so that online penetration is going to grow
[00:08:22] 100 to 150 basis points a year between now and 2027. And when you make that assumption
[00:08:30] that implies that physical stores over that time frame are going to grow at 1.5% per annum
[00:08:37] while online channels are going to grow at 10.7% per year. So online far outpacing the
[00:08:43] growth of stores. And from a dollar's perspective that means that digital is
[00:08:48] projected to account for more than half of the total dollar growth between now and 2027.
[00:08:55] So even though in grocery online penetration might only be 10% of the market today,
[00:09:00] it's contributing a significant share of incremental dollar growth as consumers shift
[00:09:05] how they buy groceries. And while Amazon, Walmart, Instacart, Kroger have a thriving
[00:09:12] retail media business along with some others like Target as an example, there are real questions
[00:09:17] for middle to longer tail grocers that are trying to meet the consumer online.
[00:09:23] Now retail media network budgets for retail media are healthy and growing. In our research
[00:09:30] 40% of brands are telling us they're planning to, I'm sorry 74% of brands are telling us
[00:09:38] that they're planning to rapidly grow or grow their retail media budget this year.
[00:09:43] And on average brands are investing about 7-8% of their sales back into retail media
[00:09:48] and they're growing that percentage rate by about 50-100 basis points each year. So if
[00:09:53] you're at 7% today, a year from now you're going to be around 7.5-8% on average. And
[00:09:59] that pattern has been pretty persistent over time. So it feels like there's a lot of money
[00:10:05] to go around for a variety of retail media networks. But the issue is that consumer brands,
[00:10:14] the issue for grocers is, consumer brands are concentrating their efforts with just a small
[00:10:20] number of retail media networks as this chart shows. Primarily the ones that we've talked about
[00:10:26] so far. Amazon obviously, Walmart, Instacart, Kroger and Target to a degree if you're in
[00:10:32] grocery. So while dozens of retail media networks have launched, even a new one launched last week,
[00:10:37] I think Wakefurn announced a new one, on average brands in our study are activating
[00:10:42] on just four to five networks. And so if you're one of these mid to longer tail grocers,
[00:10:49] you know you need to do retail media in order to be able to meet the consumer online and
[00:10:56] evolve as their shopping evolves. But there's just not a lot of money flowing in your
[00:11:02] particular direction. And so if you don't have the scale or the online traffic to attract a
[00:11:07] brand's attention, it's difficult to develop a thriving retail media offering. So Lauren,
[00:11:13] before we get into the factors, yeah, if you want to ask the polling question,
[00:11:16] then we'll get into the factors that drive allocation decisions.
[00:11:20] Yeah, definitely. So we want to poll the audience we have here. Let's see how many
[00:11:24] people do you plan to hire over the next year to be focused on PDP content? This will be
[00:11:30] interesting to see just based on what Rust has shared around where you're investing and
[00:11:35] what you're thinking about retail media and how it connects to overall PDP content in general.
[00:11:41] So if everybody can go back to their screen, take a look at the poll and put in a response,
[00:11:47] I am going to close it in five, four, three, two, one.
[00:11:56] Okay. So it looks like 46% say no one, 38% say one to two people, 8% are three to four and six or
[00:12:04] more. So I feel like that kind of checks out on my side based on what I hear from brands that
[00:12:10] are looking to hire maybe one or two people to focus on PDP content because it's a really big
[00:12:15] investment for them. How about both of you? Are you hearing anything different?
[00:12:18] Same. I think that aligns with the benchmarking that we did. I think maybe six or nine
[00:12:22] months ago where you're adding maybe a couple of people. I think content, as you know, Lauren,
[00:12:28] is something that can be overlooked a little bit. I bet if we asked how many people are you
[00:12:32] hiring for retail media, it would be higher than that. But we're going to get into the
[00:12:38] linkage here. So let's talk about the different factors that go into how consumer brands make a
[00:12:46] decision to allocate budget to different retailers. The first of these is internal resources. So we
[00:12:54] always tell retailers when we get the chance to talk to them that activating on your retail
[00:13:00] media network is not a zero marginal cost activity for brands. They need the technology
[00:13:06] to do it. They need actual people to do it. Now, fortunately, brands have been hiring
[00:13:13] and building out that retail media capability, particularly over the last 12 to 18 months.
[00:13:20] And in our research, we found that they do want to expand to more networks as they've gotten
[00:13:26] that foundation in place, but they need the capacity to do so before they can expand.
[00:13:34] Size and strategic importance is a very important element. A big reason why brands are working
[00:13:39] with the networks they're working with is that these are their biggest and their fastest growing
[00:13:43] accounts. So you think about Walmart, Walmart size or Kroger size compared to a Giant Eagle. And
[00:13:49] I'm not knocking Giant Eagle. I mean, it's a $12 billion business, but these others are such
[00:13:56] a larger scale opportunity for brands to put money to work. And these retailers, because of their
[00:14:02] size and scale are going to have a lot more leverage over a brand and also just have more
[00:14:07] site traffic and more opportunity to put money to work. In-store impact is a big one for
[00:14:14] brands too. I think the whole promise of retail media is closed loop measurement. And so
[00:14:19] brands are going to be able to do that. And so we're going to have a lot more
[00:14:25] brands want to be able to influence not just the online shopper, but also shoppers that might be on
[00:14:31] digital channels, but ultimately by inside of store. We just saw Walmart come out with its
[00:14:36] new sponsored search in-store impact beta, which is help going to illustrate that. So anything
[00:14:44] a retailer can do to close that loop, the better. Effectiveness and efficiency or reach in
[00:14:51] performance on effectiveness brands need to put real money to work. So while they have added
[00:14:57] capacity and they want to expand in more networks, they still want to get some leverage out of it.
[00:15:02] So you need to, if you're a retailer or a grocer offer brands a real reach opportunity.
[00:15:07] And that's onsite in terms of paid search, but it also explains why we're seeing more and
[00:15:12] more retailers form partnerships with the trade desk or media channels to extend their
[00:15:18] offset reach. And then on efficiency, the ads obviously have to perform. It can be difficult
[00:15:25] for a brand to compare performance across retailers. There's very fragmented, there's
[00:15:29] limited standardization, but the main point being that brands need to be getting a return
[00:15:34] out of their spend. Now I think right now effectiveness has been more important in a
[00:15:40] brand's calculus than efficiency. Meaning you could be a smaller retail media network offer
[00:15:46] a great percentage return on ad spend, maybe because it's not as competitive as a site like
[00:15:51] Amazon or Walmart, but you're still going to have a tough time attracting dollars because
[00:15:55] the brand isn't able to put real money to work. So they're just not going to prioritize
[00:16:00] it even if efficiency is really good. Number five capabilities, what type of ad units
[00:16:06] does a retailer have? Do the ads convert well? Do they have full funnel capabilities
[00:16:10] or is it relegated mostly to paid search? Amazon leads the way here as you can imagine.
[00:16:15] And so oftentimes brands when they evaluate a new network, they're looking for what is this
[00:16:21] retailer offers that's similar to Amazon or better yet are there unique offerings that a
[00:16:26] smaller retailer has that maybe an Amazon or a Walmart can't do or haven't thought to do.
[00:16:32] And then measurement, do brands spending money with a retailer have conviction in the
[00:16:38] performance measurement? Amazon as a chart illustrates is leading the way here. They've
[00:16:44] come to market with really interesting tools such as Amazon marketing cloud, attribution stream,
[00:16:49] and so on. This is an important one around measurement and the more a retail media network
[00:16:55] can give a brand confidence in their measurement and bring new measurement innovation to market,
[00:17:00] the more brands are going to spend with them. Hey, Russ question on that one. Do you think
[00:17:04] with the new standards that came out with the IAB and the MRC that this is going to change the
[00:17:09] way retailers are thinking about measurement and maybe make some of the smaller ones maybe
[00:17:14] more appealing because there's a standardization and so it's easier to invest or brands understand
[00:17:19] what they're getting into. Do you think that will have an effect on some of these factors?
[00:17:23] I think it's definitely a positive effort in a positive direction to take because of because
[00:17:28] it's a well-known issue around the fragmentation and the lack of standardization,
[00:17:32] like what does a click mean or things of that nature. I think that is a net positive, but what
[00:17:41] I would encourage retailers to think about is that's almost like a starting point and then
[00:17:46] it's what type of measurement can we offer particularly if you're a mid to a longer tail
[00:17:51] grocer? What can we offer that is uniquely demonstrating the value of our retail media
[00:18:01] network. I think it's a positive, it'll allow brands to compare. Hopefully you compare favorably
[00:18:06] if things get standardized half will, half won't, but then it's like all right what can we do
[00:18:11] beyond that? I point back to Walmart in-store attribution. Are there unique ways to tie in
[00:18:16] in-store influence or just something that's a little bit different that Amazon can't do?
[00:18:22] One other quick question from the audience. I'm not sure if we covered this in the
[00:18:24] beginning, but I want to make sure we clarify. Were there any European grocers
[00:18:28] included in the research or was it just North America for the data?
[00:18:36] In terms of the benchmarking of the consumer brands, Claire maybe you can chime in. Do you
[00:18:40] recall? It was mostly the U.S. market, but Claire I can't recall if there were any European
[00:18:47] brands. Most of the benchmark questions didn't ask specifically about specific retailers,
[00:18:55] but rather the linkage between PDP content and retail media broadly. In terms of respondents,
[00:19:02] that would have been largely U.S. digital leaders inside sometimes global consumer brands,
[00:19:10] but the U.S. digital leaders answering that benchmark if that makes sense.
[00:19:14] This as an example, this benchmarking data that is a little bit more retailer specific.
[00:19:19] This is some of Stradivly's other research, which again is largely typically U.S. focused
[00:19:26] in terms of who is answering the benchmarks. Hopefully that helps.
[00:19:29] Yeah, so I would say for if there's European attendees on the line or Asian attendees on the
[00:19:36] line that you could think of this mostly as sort of a U.S. focus report and presentation.
[00:19:42] Thank you. Okay, last factor in our work,
[00:19:46] PDB quality. That's what we're going to spend the balance of time talking about brands,
[00:19:51] rightfully so. They don't want to spend money driving a consumer to a lousy PDP.
[00:19:56] If a retailer can't deliver strong PDPs, whether it's accuracy or the general
[00:20:01] formatting of them or if they just don't convert, it's going to be pretty difficult
[00:20:05] to get brands excited about spending money with you. That's the last part of my first
[00:20:12] section of the webinar. I'm going to turn it over to Claire in a minute, but Lauren,
[00:20:16] you have another polling question and then we'll hand the baton to Claire.
[00:20:19] Yes, so one more polling question. Go back to your computer and answer this one for us.
[00:20:24] How does your company prioritize PDP and retail media capabilities?
[00:20:28] So as we dive into understanding the connection between PDP content and retail media,
[00:20:34] we want to understand where that prioritization comes from because it will be very interesting
[00:20:39] to see what teams are on the call and where you spend your time.
[00:20:44] So if everybody could go back to their computer, pop on the poll and just give us a quick vote
[00:20:49] so we can get a perspective here. I am going to give everyone a couple seconds and close it in
[00:20:58] five, four, three, two, one. Here we go. All right, so it looks like we have 49% said retail
[00:21:10] media gets more of our attention. I feel like that checks out for me because that's a lot of
[00:21:13] where the budget is. Then 20% both get an equal amount of love. I love that. I think that's how
[00:21:19] it should be. And 18% PDPs get more of our attention, 5% we're not doing much with either.
[00:21:26] So I feel like based on those results and the conversations I have with brands, there's a large
[00:21:31] budget behind retail media, right? Spending with Walmart and Amazon is in the millions of
[00:21:35] dollars and content creation, there's definitely money behind that. But e-commerce is still, I think
[00:21:42] in some organizations up and coming. And so new investment, new research behind needing more
[00:21:49] investment is a conversation that needs to happen. Claire Russ, what do you think about this?
[00:21:54] Yeah, I think part of it's related to retail media is sort of a newer element of e-commerce
[00:22:01] and so it is getting a little bit more attention and the budgets are a little bit bigger. But again,
[00:22:07] you need both. They go hand in hand. All right, I will hand it off. Sorry,
[00:22:12] go ahead, Claire. We'll share our research which should hopefully encourage a little bit
[00:22:17] more of that balancing out because just as Russ said, we don't want to spend money to drive
[00:22:22] to a PDP that doesn't look any good and doesn't do what we need it to do for the
[00:22:27] consumer, which is where we're going to focus the remaining of our time here today. So that
[00:22:32] seventh consideration that Russ mentioned all about PDP content and in our research,
[00:22:39] that was the original question. Hey, does this matter within retail media investment decisions?
[00:22:45] And the answer is yes, it does play a role and it's exactly the reason is exactly what
[00:22:50] Russ described. It makes no sense to spend what are limited retail media dollars, pretty
[00:22:55] precious dollars for you all to drive a consumer to a PDP that ultimately is not going to convert.
[00:23:04] And so you'll see here, we asked how much does the completeness and the accuracy of your PDPs
[00:23:10] influence the amount that you spend? In those hot pink bars there, 67% saying it has a
[00:23:17] moderate significant or full influence over the amount that you spend on a media network. So
[00:23:23] roughly two thirds of brands are day in and day out kind of looking at
[00:23:28] PDPs in concert with retail media as they go to fund retail media. Some more specifics here,
[00:23:36] 74% say that they're assessing PDP content quality before investing incremental dollars
[00:23:43] into a retail media network that they are already invested in. Another 74% are looking
[00:23:49] at PDP content quality before investing into a new retail media network. And then within a
[00:23:56] particular retail media networks budget, 66% of brands are allocating more ad spend to those
[00:24:04] products that have higher quality content. On the flip side of that, 50% of brands said
[00:24:12] that they've reduced ad spend on a product due to poor PDP content. So again, these really
[00:24:19] kind of high numbers are showing yes, brands are looking at this. It makes sense to not
[00:24:24] kind of waste those dollars on a PDP that is not really serving the need for to convert
[00:24:32] the customer. And Claire, I feel like this also speaks to the fact that if your retail
[00:24:36] media network team is not talking to your content development team, that is a big gap
[00:24:42] that needs to be closed because if your PDP doesn't have the right images, the right
[00:24:49] descriptions, the right enhanced content, then you're not driving to a conversion and
[00:24:54] you're not actually having that ad be worthwhile. So making that connection I feel like is a big
[00:24:58] piece of this as well. Totally. I think from a brand's perspective, a lot of this research
[00:25:05] culminates in, okay, those teams need to be working together. I think that's the big call
[00:25:08] to action and there's still an opportunity there. So I think I would caveat these benchmarking
[00:25:17] numbers with a lot of anecdotal feedback that we heard within the interviews of, hey,
[00:25:22] in theory this is how it should be on paper. It makes a ton of sense to make sure that
[00:25:27] those PDPs are buttoned up before we spend. In reality, not every brand is doing this.
[00:25:34] It's not fully buttoned up 100% of the time. There's maybe some good moments but then also
[00:25:41] a lot of pickups along the way of, oh, geesh, something fell out of date within this PDP or,
[00:25:47] hey, we did this major refresh. The PDPs across the board aren't looking very good
[00:25:51] but the retail media spend is not being adjusted reflectively. That is exactly
[00:26:00] what Lauren is saying, is that, hey, those teams are just sitting in two different silos
[00:26:05] and not working together enough. I think processes is a big thing as well in speed.
[00:26:11] Right? So a lot of times the content creation side of things, that timeline can be rather
[00:26:18] lengthy versus oftentimes moving at a quicker speed within retail media. So aligning those
[00:26:26] timelines and processes is difficult or it can also be that both of those functions are
[00:26:35] sitting in their silos and running at breakneck speed but sometimes just in parallel to one
[00:26:42] another or in different directions. So we know PDP content, that kind of optimized PDP is always
[00:26:49] a bit of a moving target. You're always iterating upon that content or you should be. It
[00:26:53] shouldn't be a set it and forget it thing so kind of navigating a lot of real time changes
[00:26:58] on the content side with real time changes on the retail media side, that can all be,
[00:27:04] it can be challenging to marry up. So in theory, it's simple. In actuality and practice,
[00:27:09] it can be difficult but I think that's the opportunity for brands that we want to highlight
[00:27:14] today. I would say too, I'll just chime in is I does feel like anecdotally brands have gotten
[00:27:20] pretty good at closing these silos on new products and new product launches. I feel like
[00:27:26] there's been a lot of improvement in that in the last couple of years. I think there's,
[00:27:30] but there are a lot of SKUs and ASINs out there that have been in the market for a while
[00:27:35] and getting those the same degree of cohesion between PDP and retail media. I think that's been
[00:27:42] a little bit more challenging, particularly for brands with a huge number of SKUs that can be
[00:27:49] particularly challenging. Use this data, take it internally, have a joint conversation. As Claire
[00:27:55] keeps presenting, there's going to be so many great numbers and nuggets that you can take
[00:27:59] internally to really kind of bridge those gaps and really kind of help be the catalyst.
[00:28:04] Go ahead, Claire, take it away. Totally. This quote is just one example that we heard within
[00:28:10] one of our interviews of quite literally saying, hey, Instacart came to them,
[00:28:16] hey, we want you to invest in Instacart ads. Maybe they went through a lot of the other
[00:28:21] criteria that Russ covered and it's a great opportunity but at the end of the day, they
[00:28:26] said, hey, our catalog looks very, very messy. Before we invest a dollar, we're going to
[00:28:32] partner up with Instacart to really get this catalog cleaned up. They were able to see
[00:28:39] really meaningful results just on the organic front from cleaning up those PDPs
[00:28:44] and ultimately improving conversion. That made them feel much more comfortable of, okay,
[00:28:48] we know these are in a good place. We know that they're working hard for us already. Now
[00:28:52] let's double down and put some paid media spend behind it. This is the ROADS formula,
[00:29:01] as we've called it in this report, which really just kind of unpacks, okay, why does content and
[00:29:07] catalog matter within retail media? On the left-hand side of the slide, if you're looking at
[00:29:14] advertising performance, which most commonly is looked at from a ROADS standpoint, you first
[00:29:20] need the ad to connect to the right shopper. Right ad, right shopper, need it at the right
[00:29:26] place and at the right time. If you can do that, then you get them to the PDP and it turns into
[00:29:32] a game of conversion, right? And that ultimately is what's going to get you your return on that
[00:29:37] ad spend. Now price, buy box and Instac, of course are critical in order for you to capture
[00:29:44] that conversion, but listing content, ratings and reviews, catalog management, of course,
[00:29:49] just as important to drive the conversion. So that's really where it plays, where it plays
[00:29:55] in here. If you whittle it down to where you're getting your return, again, on what are very
[00:30:02] limited retail media dollars, this is why PDP content plays such a big role.
[00:30:09] And then we have a couple more stats that just quantify from the brand's perspective,
[00:30:15] how PDP content really is impacting ROADS. So 71%, again, in the hot pink bars,
[00:30:21] say that the quality of PDP content either significantly or very significantly influences ROADS.
[00:30:31] You'll see on the next slide, 83% indicate that ROADS improves as PDP content improves,
[00:30:38] again with conversion rates being kind of the strongest link between the two.
[00:30:44] A small caveat here is that, and Russ touched on it earlier, and Lauren,
[00:30:48] measurement can be challenging. Just retail media measurement can be challenging. I think
[00:30:54] PDP measurement and just set aside the retail media piece looking at, hey, overall sales lift,
[00:31:00] it can be hard to really distinguish, hey, this improvement to PDP is what drove a change.
[00:31:06] And so then you put that together, like we really want to measure the impact of PDP
[00:31:13] improvements on ROADS. It's not perfect. So in the previous slide, we asked about upside.
[00:31:20] If you do an improvement to the PDP, do you see an improvement in ROADS?
[00:31:24] Here we asked about the downside. Have you ever seen a decrease in ROADS
[00:31:28] for an ad connected to an incomplete PDP? 41% saying yes, which is kind of in line with
[00:31:35] what you'd think. 47% saying not sure. And we interpret that as it can be hard to truly
[00:31:42] measure and tick and tie these two things. Like Lauren and Russ's comments earlier, just
[00:31:50] more of an effort around reporting in general and getting our arms wrapped around performance as
[00:31:56] an industry. That'll continue to make this a little bit easier. But also in the meantime,
[00:32:02] you've got to be okay to a degree of less than perfect measurement and ticking and tying
[00:32:10] of these two things. Switching gears a little bit, I think these data points were super
[00:32:18] interesting when they came back to us. If you think back to Russ's list of investment criteria
[00:32:24] for retail media, one of them was performance, which we certainly just talked about. One of them
[00:32:29] was reach as well as size of the retailer or size of the retail media network. Of course,
[00:32:36] if the retail media network has a very, very expanded and impressive reach, that's going to
[00:32:40] get the attention of marketers that are looking to spend those retail media dollars. But nearly
[00:32:47] a third of brands, 31% of brands said, I will consider investing in a retail media network
[00:32:53] if the PDPs are excellent, even if their reach is lower. And again, this is interesting because
[00:33:00] most of those larger retail media networks are just naturally going to win the budgets.
[00:33:04] But this kind of illuminates the opportunity for smaller and newer retail media networks. Now,
[00:33:11] again, it's never just one thing. So this might not be enough to kind of overcome shortcomings
[00:33:17] in other areas. But I think this is interesting that brands are excited to
[00:33:24] invest into a platform that helps make their brand look good. And that's really what this is.
[00:33:29] If the retailer, if it's low reach, but if they have a really great and impressive
[00:33:33] PDP content, it's going to help make that brand stand out.
[00:33:38] I think I often get a lot of questions from brands around like, how do I create a
[00:33:42] prioritization framework or how do I decide how to invest in a specific retailer? These are
[00:33:48] some really great data points. Like, are you looking at their PDP content? Are you looking
[00:33:52] about at their reach? Are you looking at how you're engaging with them? And same on the
[00:33:57] retailer side, if we have any retailers on the call when you're working with brands,
[00:34:00] knowing that these are the factors that they're thinking about. So I just point that out because
[00:34:05] a lot of brands are trying to figure out what this like prioritization strategy or formula
[00:34:11] or magic formula is. But this is a really big piece of it to consider because it does drive
[00:34:17] conversion if you have a better built out PDP. Totally. Yeah, I think some of the most
[00:34:23] impactful for brands, some of the most impactful things that came out of the research was just
[00:34:29] those kind of in a concise and digestible way, bringing some clarity around, hey,
[00:34:38] ultimately what should you be looking at when you think to invest or not? Those seven things
[00:34:43] that Russ talked through at the beginning. And here we'll kind of dig into the PDP piece of
[00:34:49] it. And then I think the next step is, so there isn't a one size fits all prioritization
[00:34:53] framework per se, but the next step is taking that list of seven, marrying it up against
[00:35:00] your specific goals. And so depending on your goals, hey, in-store impact might be huge,
[00:35:07] huge, huge. Maybe you give that kind of a higher ranking, so to speak, in terms of these
[00:35:12] different criteria or maybe reach is really important or anything else. So I think it's
[00:35:18] taking that list for starters and then kind of boosting up or boosting down
[00:35:24] some of the criteria just based on what's most important to you.
[00:35:31] So a third of brands say if PDPs are great, maybe we'll invest even if reach is pretty low.
[00:35:39] And this is one of the reasons why. So a large majority of brands, 89% of brands believe
[00:35:46] that richer and more accurate PDPs attract a higher quality audience on that retailer's platform.
[00:35:54] Higher quality meaning more loyal, meaning willing to spend more, et cetera. And so the
[00:35:59] idea here is that you'll ultimately get to better performance. Maybe the absolute reach
[00:36:06] numbers are lower, but if it's a highly engaged audience, very high quality,
[00:36:12] you'll get to a strong return from that investment as well. And I think this is
[00:36:20] increasingly important as brands continue to mature on the retail media front.
[00:36:26] They're getting more thoughtful and smarter about how they spend. And so maybe five or
[00:36:32] 10 years ago, it was kind of this wide like spray and pray approach to retail media. Brands
[00:36:38] are eager to know AMC is helping here and Luminate is helping here. They really want to
[00:36:45] know, hey, what do the customer dynamics look like inside of these purchases? And who is
[00:36:51] loyal and who's repurchasing three, four, five times for me? And that's where I want to
[00:36:57] focus my spend. And so if the PDP as the benchmark is suggesting, if the retailer can
[00:37:05] kind of put a strong PDP in front of the consumer and that can help just up the quality of the
[00:37:12] audience, that is as the benchmark suggests, kind of really helping those maybe smaller
[00:37:20] and newer networks gain some attention from brands. And Claire, just to double click on
[00:37:24] that when you said that the brands are really eager to get that information, I also think they
[00:37:28] have to because, excuse me, from a profitability perspective, brands and retailers are focused on
[00:37:35] profitability. Right? Everybody's feeling it on every side. So brands now need to really
[00:37:40] understand where they're spending their dollars and where it's going to make an impact. So
[00:37:44] I see this broader theme of profitability across the industry. And that is translating
[00:37:50] very heavily to retail media and to data in general to say, are we making the right
[00:37:55] choices? We need to make them now and we can't afford to make incorrect choices. So it's just
[00:37:59] really interesting to see that tied with that overarching theme of profitability that we see
[00:38:03] across all of our brands of retailers. Totally. I think very well said. Here is
[00:38:13] where either brands are focusing first on their content or they would like, and or they would
[00:38:18] like their retail partners to focus on first. So we asked which elements of a PDP are often
[00:38:25] lacking or inaccurate on a grocery or platforms. 73% said images, 64% said product descriptions,
[00:38:33] 58% said videos. Now I would have actually expected ingredients and nutritional information
[00:38:40] to be higher up on this list. So you'll see those are the last two things. When we were
[00:38:45] doing our interviews, anecdotally, we heard some instances of in some cases, the link
[00:38:52] between PDP content and retail media is strongest when the PDP is incorrect from an
[00:39:01] ingredients or nutritional information standpoint, particularly if the inaccuracies
[00:39:07] is posing some legal risk to the brand. And so my earlier comments of, hey, in theory,
[00:39:13] it makes sense to marry them up perfectly. In actuality, it's harder to do that. It is more
[00:39:18] of a hard and fast rule of we're not going to spend if the PDP is bad. That's more hard
[00:39:23] and fast when it's related to ingredients, nutritional information, safety information,
[00:39:28] that type of stuff. So it's interesting to see it lower on the list. I'm hoping that that
[00:39:32] means in the rare instances, we have a bad PDP from an ingredient standpoint,
[00:39:38] we're definitely stopping spend, but maybe that's just more rare than not.
[00:39:42] And by and large, the retailers are kind of keeping up with that, which would be great.
[00:39:47] But these findings can be taken a couple different ways. If you're a brand,
[00:39:52] and you're looking at this, if you're kind of overwhelmed by all of the things you feel like
[00:39:58] you need to do to get your content in shape, this benchmarking can kind of give you some
[00:40:02] clues on where your biggest needle movers may be, i.e. images and product descriptions.
[00:40:08] And then if you're a retailer, these are the first few areas you want to
[00:40:12] focus on to ensure your capabilities are robust. And by robust capabilities, it not only means,
[00:40:20] hey, let's give the brand the ability to upload a robust set of images as an example,
[00:40:26] but just as important is the kind of infrastructure for them to keep those up
[00:40:31] to date and accurate. Again, back to those interviews in our broader research, you know,
[00:40:37] we hear of so many just headaches from the brand side of, hey, this content keeps reverting back
[00:40:45] to old content that we don't want anymore. We see an inaccuracy and it's so hard to get it
[00:40:49] fixed. It takes so long to get it fixed. And those headaches, you know, I would say some of
[00:40:55] those are some of the biggest headaches that we hear about just in talking to e-commerce
[00:41:00] leaders broadly. And those headaches aren't going to make you kind of want to dive in and
[00:41:04] invest money with that retail media network. And so if you're a retailer, you know, again,
[00:41:09] kind of looking to build out that retail media network and secure more funds, these are some
[00:41:14] of the areas that you want to focus on from a content standpoint and the infrastructure being
[00:41:19] just as important as kind of the front end PDP, you know, checking the box in terms of
[00:41:24] the different attributes that you have. Any questions for now before I close it out with
[00:41:33] takeaways or an action items? We had a question. I was trying to pull up this slide quickly,
[00:41:38] but maybe Claire, you can just clarify as we go, as we went through all that data,
[00:41:42] the size of the data pool, how many people you interviewed and then how many people were
[00:41:46] in the survey. And I don't know if Russ, you know that off the top of your head or Claire.
[00:41:50] The 74 rate benchmarked, I think, and then a dozen qualitative interviews.
[00:41:56] Perfect. Thank you, Claire. So some takeaways and action items for brands on this slide. And then
[00:42:03] we have a slide for retailers next. Again, we've been talking about it, but really
[00:42:09] for brands, it's all about kind of breaking down those silos and bringing these teams
[00:42:13] together. So for starters, as Lauren already said, hey, start by sharing this report to
[00:42:18] all of those relevant teams. I think that's why we wanted to do this research. We
[00:42:23] we hear about the challenges as we talk to digital leaders and sometimes just to bring in
[00:42:27] some outside research that can really help open up the conversation on why a topic like this
[00:42:33] is important. But really organic, paid, digital shelf, all of these teams need to be
[00:42:40] a lot aligned in terms of content and campaign. And again, this can be easier said than done.
[00:42:47] So Russ mentioned, hey, we're moving along and getting better from a new product standpoint.
[00:42:53] That's a perfect example of let's start somewhere. Let's start with the biggest fish.
[00:42:57] And so I would encourage you if you're seeing this and seeing this data and listening to us
[00:43:03] and saying, yes, this all makes sense, but jeesh, I just think this is an uphill battle
[00:43:07] inside my organization. Start with the 80-20 rule. That can be, hey, an easy place to
[00:43:13] start is new innovation. If you've already done that, look at biggest best sellers,
[00:43:20] biggest products within your own P&L and the products that you're just spending the most heavily
[00:43:25] on from a retail media standpoint. Those are the places to start in terms of getting campaigns
[00:43:33] and content aligned. The more mature next step, if you're already doing a good job
[00:43:39] with maybe a select portion of your catalog is really at a higher level building out that
[00:43:47] digital strategy that's going to acknowledge all of the different touch points a consumer
[00:43:52] may have with your brand, whether it's organic, whether it's on the server or on the PDP,
[00:43:57] across the digital ecosystem. How is the consumer interacting with my brand and how
[00:44:02] are we making sure that we're all working together? Again, a lot to unpack that can
[00:44:07] encompass a lot of different things, but in this context, a great place to start is just,
[00:44:14] again, looking at the infrastructure that's underpinning content and underpinning retail
[00:44:19] media and how can we better align those so that we're aligned from the start rather
[00:44:25] than these band-aid patches and aligning as an afterthought, which I think is where a lot
[00:44:31] of brands are today. Last bullet point is just to use this data with your retail partners.
[00:44:41] If you're advocating for more content support and your retailer is shrugging it off,
[00:44:48] bringing in the retail media business into the conversation is really a great way to get those
[00:44:52] retail partners to lift their heads up. Like Russ said, this is where the money is. They
[00:44:56] need this retail media business to do digital profitably. Bringing the retail media conversation
[00:45:06] into the mix in order to get the progress that you want on content, I think that's a great
[00:45:11] place to start or otherwise just justifying, hey, we can't spend right now. If you're a brand,
[00:45:18] every retail media network is knocking on your door for funds and so you don't have enough funds
[00:45:23] to give everyone. If one of those retail media networks is asking for funds and the
[00:45:29] PDP content quality is not there, a good place to start is hey, let's clean it up.
[00:45:34] Or even before that, it's hey, we can't spend right now because the content isn't where
[00:45:39] it needs to be. This data can help validate that.
[00:45:43] Perfect. The only thing I was going to say, Claire, is to your point about bringing that
[00:45:47] data into your organization, for all the brands on this call that you've been having
[00:45:51] this conversation so many times, this is the point where you can take this data to your
[00:45:55] leadership and say listen, this is what everybody else is doing. This is what we're seeing in the
[00:45:59] industry and this is the direction that it's going. I know from putting my old brand hat on,
[00:46:04] you always needed external research to help showcase the changes. Yes, I agree, Russ.
[00:46:10] So please use this research, download the report. You can find the link in the chat
[00:46:14] and share those data points to help the conversation and bring everyone together
[00:46:18] and just begin figuring out internally how to bridge those gaps if you haven't already.
[00:46:26] Absolutely. One more slide for the retailers. If you're listening to this and you're inside
[00:46:33] the retailer organization, it's really just the other side of the conversation.
[00:46:38] If you're looking to grow your retail media network, if you're struggling to win dollars
[00:46:42] from brands, again, if you're new or smaller and therefore lacking in some of the other
[00:46:48] investment criteria areas that Russ mentioned earlier, this can be your opportunity to
[00:46:55] overcome some of those other shortcomings or even just for better or for worse,
[00:47:00] just to have a seat at the table and entertain the conversation with brands.
[00:47:05] As we mentioned, many brands just consider this to be table stakes
[00:47:09] to even have a conversation about investing. So identify the gaps that you have in the
[00:47:14] world of content, whether it's technology, whether it's processes, whether it's people
[00:47:18] resources. Identify the gaps and build your roadmap to elevate the content up to brand
[00:47:26] standards, up to maybe competitive retail media network standards that we know are larger and
[00:47:32] are winning more funds. I would say share that roadmap with brands to the extent that you can.
[00:47:38] But even if your content capabilities aren't at a perfect place today, just letting them know that
[00:47:45] yes, we're working on this. Yes, we hear you and here's, we agree that it ties into retail media
[00:47:52] and we want the PDP to work the hardest for you. That will go a long way for brands.
[00:47:58] And then we touched on it already, but the data piece of it is important as well.
[00:48:02] So the more and unique kind of customer specific data, transaction data that you can share with
[00:48:10] brands that allows them to effectively improve the PDP, that allows them to spend in a smarter
[00:48:16] way to see greater performance. That's ultimately what is going to unlock more dollars for you
[00:48:23] within the retail media network. And within that, like we mentioned, they also need data,
[00:48:28] brands need data just to truly be able to understand what does performance look like.
[00:48:32] And so hand in hand with those content capabilities is, hey, what do our reporting
[00:48:37] capabilities look like? What are we sharing back with brands? Again, because some of that
[00:48:41] unique data is going to get brands excited. And then back to the table stakes, for starters,
[00:48:47] they just need to know kind of how the investment is performing for them.
[00:48:54] That's all I got. Hopefully helpful. Hopefully the action items help bring it home a little
[00:48:58] bit more. And Lauren, I'll turn it back to you. Great. Thank you so much, Claire. So if you have
[00:49:03] questions, throw them into the chat. A couple quick closing slides. If you have not registered
[00:49:08] for the summit in Nashville, please do come. Russ and Claire will both be there. Russ is on
[00:49:12] main stage keynoting and Claire has an awesome session about centers of excellence.
[00:49:17] I will be there as well and I would love to meet you in person. So scan the QR code or
[00:49:21] send me a note if you need a link to buy a ticket. It is April 8th to the 10th in
[00:49:25] Nashville, Tennessee. You can listen to some really great country music. And if you want to
[00:49:30] hear from Stratably, please do scan their QR code to get access or you can click on the link
[00:49:36] when I share out the slides. If you want to get in touch with them or read their awesome
[00:49:40] content that they put out. If you are not a member of the DSI, please join. We would love
[00:49:46] to have you as a member. You can see all of the great content that we put out. So scan all
[00:49:49] these QR codes. You will have access to this recording by email after this webinar. It will
[00:49:55] probably take a couple days and it will be popped up in your inbox and I can also share
[00:50:00] it with you if you did not receive it. All right, well Russ, Claire, thank you so much
[00:50:05] for sharing your insights. Thank you for collaborating on this report. I really do think
[00:50:08] that this is monumental for the industry connecting content and retail media. So really
[00:50:13] excited to have you. Thank you so much for being here today. Thank you, Lauren,
[00:50:18] and thanks everyone. Thanks again to Russ and Claire for sharing their expertise and their
[00:50:22] partnership in the research with us. The full research paper, The Role of PDPs in Retail
[00:50:27] Media Budget Decisions is available on the resources page using the research filter at
[00:50:32] digitalshelfinstitute.org. Become a member while you're there. Thanks for being part of our
[00:50:38] community.