New Retail Media Strategy Benchmark Study - Where do you rank?, with Gregor Murray, VP of Strategy, Digital Commerce Global

Transcript

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Lauren Livak Gilbert (00:00):

Welcome to Unpacking the Digital Shelf, where industry leaders share insights, strategies, and stories to help brands win in the ever-changing world of commerce.

Peter Crosby (00:22):

Hey, everyone. Peter Crosby from The Digital Shelf Institute, Digital Commerce Global, recently came out with their third annual deep dive benchmark study on how brands are managing their retail media strategy or not. The study's author Gregor Murray, VP of strategy at DCG shares with Lauren Livak Gilbert, and me, all the key results that point towards the urgent opportunities for instituting organizational, financial and measurement rigor in this critical but complex part of your digital commerce success strategy. Welcome back to the podcast. We love having you on bring all the best data stuff to us, and we're really grateful.

Gregor Murray (01:06):

Hey, it's my third time. I'm so pleased to be back. How many do I need to do to get a set of steak knives or something?

Peter Crosby (01:12):

Two. So they haven't arrived.

Gregor Murray (01:14):

Oh, cool. They've not arrived. I'll keep checking the place.

Peter Crosby (01:19):

It's international shipments. They're always a little dodgy. So the data for today is you just did a benchmark on retail media, which is top of mind with everyone trying to control expenses, but also get incremental revenue. So the forces fighting against each other. So it's a real challenge to get that right, and I think your benchmark uncovered a lot of those challenges. So let's just dive right in. What are you hearing? What did the data tell you?

Gregor Murray (01:51):

Yeah, no. So yeah, we've spent from April through to the tail end of May benchmarking across the industry around digital retail media. So over a hundred manufacturers markets participated. It's a huge wealth of information, 27 different product categories we've had responses for. So a huge breadth across CPG across food, beverages, consumer electronics, baby clothing and apparel, lots of manufacturers, lots of perspective about how different manufacturers are facing into the same question, into the same challenges. We asked about 130 questions in total, so it was a big commitment from people participating in Thank you to everybody that did, especially all of the DSI members that I know are listening. And we got back a huge wealth of information. The questions are structured around 11 different focus areas, and they're all of basically the hot topics in retail meter right now. So we asked about strategy and objectives, structure and ownership planning, prioritization, optimization and measurement processes and guardrails, funding and investment, which I know is a really big topic.

(02:55):

I'm sure we'll talk about that a bit later on. Partnerships, performance and obviously the behemoth that is incrementality the data that's coming back, it's absolutely fascinating. The first thing to probably say is we did this benchmark two years ago. We've had more than twice as many people participate in it. The challenges that we were seeing two years ago in digital retail media, sadly they have not gone away. In fact, they've been joined by a few more challenges, very, very common across the industry. And so the first thing we've done is we've looked at all of those challenges and we've broken them into what's the internal challenges like the manufacturer stuff that they can do something about straight away, what are the external challenges? And then what are the industry challenges? What's the stuff that actually manufacturers are not really going to be able to do anything with?

(03:46):

And firstly, the challenges. Some of the internal ones, cross-functional misalignment. I'll share some stats with you in a little bit in terms of them, but cross-functional misalignment, budget ownership, confusion, lack of internal know-how, disconnected measurement. Those are the big challenges that are internal to the manufacturers right now. We look at the external ones. So retailer capability gaps. Not every retailer, not every network is offering the same level of capability. You've got retail and maturity and expectations is a big challenge as well. So some of the retailers, some of the networks not offering very much, but asking for a lot of investment in return for it, whereas others offering a lot more capability for the same levels of investment, sometimes less. And then access to data. So the networks, the retailers, not giving up the data to manufacturers to actually help them understand how well their campaigns are doing and what they're getting back in return for it.

(04:43):

And then finally, those industry challenges. So media cost and competition are on the increase inconsistent, ROI metrics, very, very common across all geographies, all markets, all retail challenges that we've looked at. Very time heavy in terms of reporting, actually getting understanding, getting analysis back. And then this question around incrementality. So weak understanding of what incremental actually is, how to go about calculating it. I know we're going to talk about that in a little bit as well, but when manufacturers can't understand what they're getting back in return for their investment when they're being faced with constant challenges and increasing challenges, it's becoming a lot harder for manufacturers of all scales and sizes to get on top of this hot topic, this big issue, and really turn it into something that is sold as and should be a huge growth driver for manufacturers. But the reality is not necessarily matching what is being sold.

Lauren Livak Gilbert (05:48):

That is, I feel like the million dollar question that anyone could solve, that they would be able to solve the entire industry. But we will talk about that. So the three challenges you're talking about the internal challenges, external challenges, industry challenges. Where do you see the majority of brands are either struggling or spending their time to fix?

Gregor Murray (06:09):

Well, I mean, this is part of the most surprising thing that's coming back from the data. We are seeing this huge inconsistency in the approach that manufacturers are having to retail media and in the responses that we're getting back to the question. So I'll give you a couple of examples, right? So 92% of all of the respondents across all of the manufacturers, all of the markets, 92% of them have said that they believe competition for share of voice in digital retail media has increased over the last year. Now, the only surprise in that is that it's only 92%. I would've said it should be a hundred, but 92% say competition has increased. Where the inconsistency comes in is that only 17% of manufacturers say that they actually have a strategy for dealing with that competition. So 92% saying this is getting more competitive, it's getting harder. We're having to invest more money. It's more competitive. Well, do you understand what your competitors are doing? Do you understand what the natives are doing? Nope. Do you have a plan? Do you have a strategy? Are you going to create one for dealing with this to respond to this increased challenge? Nope. So there's this inconsistency there, and it goes through almost all of the focus areas and almost all of the questions that we've asked

Peter Crosby (07:29):

Gregory, but Gregor could, I knew one of us was going to ask, go ahead, Peter. We both want to dig in here. Yes. Is it that they think that there's nothing to be done, or is it that competition is what it is and that's what an ad market is all about? And so I'll just keep,

Lauren Livak Gilbert (07:50):

Or are they overconfident in having, if they're bigger brands, just like, Hey, we got this, we'll figure it out. That's what I was thinking. I'm curious.

Gregor Murray (07:59):

I mean, they're really interesting questions. So I think the first thing is most manufacturers that I speak to on a regular basis still treat digital retail media the same way that they're treating in-store media. So in-store media is cardboard in a shop, it's there for three weeks, it's there 24 7 for that period of time. And actually they can only sell that space once. But with retail media, digital, retail media, the retailer, the network can sell that space a thousand times a second to completely different manufacturers if they want to. And I don't think many manufacturers, the leaders really get this, the ones that are working very closely with their media agencies, with their creative agencies, they are getting that. The ways to deal with some of the competition is to be very deliberate about who it's that you're targeting, what time of day you want to be targeting them, at what communication mediums, what channels there that your target audience are most receptive to.

(08:58):

How do we communicate, what should the message be? What should the creative be? They're testing, they're learning, they're experimenting, but too many manufacturers are still in this camp of we run an ad and it's exactly the same as putting something into store and it's just not. So I think there is a mentality shift here. I think reading through the data of the practitioners get that the people that are day-to-day working in media booking that are working in the commercial teams potentially as well, working some of those accounting, I think they get it, but at a much more senior level within an organization that drive to try and simplify things and make it more bite size, it's just not working. We have to lean into the complexity rather than trying to simplify it and box it up with traditional in store media. That's my guess.

Peter Crosby (09:52):

And have you found you are in the room with these executive leaders that you're bringing this to their attention, I presume, and have you found something, a set of data, a talk track, a way of discussing the issue that you've seen the light bulb turn on? Or is it still just kind of complacency or,

Gregor Murray (10:21):

I'm very fortunate because I have access to benchmark data that we've created or we've gathered. I'm able to sit with these people and show them how they are performing versus their peers versus their competitors versus the best in the interest rate, and really hold that mirror up and show them the reality of the situation and show them some of the disparities between their scores as a senior leadership team, as a market leadership team, whatever it might be, and the practitioners and then others within the industry. And there is progress being made. So a lot of the questions that we've carried over from the previous one, we've seen progress being made, but still there is this contradiction, some of the responses. So 85% of manufacturers have said that digital retail media is now a much higher cross-functional strategic priority in their organization. Wonderful. Right. That's great. So it's clearly being talked about. It's more important. It is becoming better. Understood. Sadly though, the only 35% of respondents say that their organization has the right capabilities they need in order to be able to deliver digital retail media effectively. So you've got 85% saying this is really strategically important to us cross functioning, but only 35% saying those functions have the capabilities that the Well,

Peter Crosby (11:38):

I would imagine that part of that is goes to your point about external challenges because probably a lot of them feel hamstrung by the networks that they are interacting with. And doing it at that level is challenging with all, but probably a few of the networks that they work with. I'm imagining,

Gregor Murray (12:00):

I would completely agree with you, Peter, but there's more and more networks being offered up every single day. It feels like we went through a period of six months where almost every retailer started launching their media network and manufacturers were coming under calls from all over the place to invest into different media networks. And that external challenge of network maturity and network capability, they're very, very different. They're different stages of maturity, different stages of capability, and it's difficult for the manufacturers to identify where to put their budget, where to place their strategic bets, who they want to invest with, where they're going to get the best return on their investment. But having said that, to say that this is a 85% strategic priority across manufacturers, across markets, across markets, but then to only have 35% say we've got the right capabilities, just building on that one, only 48% of the manufacturers are the minority of manufacturers are saying that they have defined what the cross-functional roles, responsibilities and objectives are when it comes to digital autonomy.

(13:10):

So these are actions that manufacturers can take. They can be very, very clear about saying internally, this is a priority marketing. You own this media, you own this, digitalcommerce owns this commercial, owns this, finance owns, you can do that internally, you could do that tomorrow. Right? It's not difficult to do, but the majority of manufacturers, even though it's a strategic priority, have not done that yet. And we did our first retail media benchmark two years ago, so 24 months have passed. There has been plenty of opportunity to define some of these things, but it's not happened yet. The other thing that I find quite concerning for some of this data is that 80% of manufacturers are respondents are saying, we believe that digital retail data is adding incremental ROI to our business. So that's great. So there's great positivity about the opportunity, there's great positivity of intent behind digital true retail media.

(14:14):

But then when you dig a bit deeper, only a fifth of manufacturers are factoring into true cost of media into those ROI calculations. So if you're not factoring in the cost of creative, the cost of booking, the cost of price promotions, which sometimes have to happen as well, the cost of retailer investment, the cost of resources. If you're not factoring all of that in, how can you be saying that this is generating your positive ROI? How can you have an 80% belief that this is incremental, that it's driving benefit to your business when less than a fifth of manufacturers have actually take the full cost of what they're doing? And again, we did this benchmark for the first time two years ago, 24 months have passed, and those stats haven't changed. And I find that concerning.

Lauren Livak Gilbert (15:07):

And actually this is a perfect transition into talking about one piece of this, which is budget clarity, right? It seems like from that stat, brands aren't clear on how much they're spending on different areas and how they're connected together and what the clear ROI is. So when you're talking about budget clarity, tell us how are people approaching it? Who's owning the budget? Is it split between teams? Let's dive into this really challenging question.

Gregor Murray (15:35):

Yeah, I mean, this is a really challenging question, but I think first before we jump into who and what, let's talk about budget to begin with. So we ask all of our respondents within certain bandings, how much are you in retail media? So we asked them, what percentage of your gross sales value are you investing into retail media? What percentage of your media spend your ad budget are you investing into digital retail media in North America? Roughly the average across all manufacturers in North America is 6.4% of gross sales are being invested into digital retail media. 6.4% of gross sales being invested in, when you look at it as a percentage of ad budget is 22% of ad budget is being invested into digital retail media. These are huge numbers when you consider the manufacturers that are participating at the global multinational, multi-brand manufacturers that have participated, we're talking about huge numbers by category. Frozen is by far away the highest advertiser, it's 45% of their budget on average is now going into digital retail media, 45% in frozen, it's about a third in pet care, right? The lowest household care about eight and 5% health and wellness is just over 10%. Soft drinks is about 12.5%, right? That's the proportion that budget they're putting in. But these are huge numbers

(17:01):

When you look at the manufacturers.

Peter Crosby (17:03):

I guess it's easy for me to say from sitting in the cheap seats here, but it seems like that's what surprised me when you talked about the lack of rigor built around this because it is such a heavy area of investment. It's grown super fast. And I'm just wondering if you have a sense of, because usually by this time the CFO has marched downstairs and said, what's happening here and how do we know where? I'm just wondering if you have some prescription or some sense of what's happening there that allows us to kind of muddle

Gregor Murray (17:41):

Along. Yeah. So look, in my commercial career, if I had started giving away an additional 6% of gross sales that somebody lived all over me the next day to find out what was going on there and what my plan was behind earning that money back, and when I first started working for one of the big manufacturers that I worked with, we had to do sales training. And one of our sales trainers used to say to us first day, big mantra, if you want to give money away for free, go work for a charity. Everybody else has to earn money for our business in order to make money from our business. And yet, it feels like with a lot of manufacturers, they're just giving the money away. When we look at things like, do you have a unique line on your p and l for digital retail media? It's less than a third of manufacturers that have a line on their account p and l relating to the digital retail media that they're spending

Lauren Livak Gilbert (18:38):

Because they can't pull it apart. I think that's the problem. They just don't have visibility and they don't know what it is. Right? It's not lack of wanting to do that.

Gregor Murray (18:46):

No. Well, I know a number of manufacturers who have now gone into that process, they've forced themselves into it because the numbers they're talking about, it's not like people are investing 20 grand here, we're talking tens of millions of dollars that is effectively profit. That's going from the manufacturer's pocket into the retailer's pocket. And if you're not putting that rigor behind it, you can't possibly seek to control it. You can't possibly work out whether or not you're getting a decent ROI on it. You can't possibly work out what else you need to do in order to be able to improve it. And yet the data is really clear that rigor is not there. And we talked about ownership. So we asked the question around what percentage do you have one person who owns digital retail media in your market or in your region? So we've got manufacturers of all shapes and sizes.

(19:43):

So some are very market focused, some are regional focused, some are global responses. Do you have one person in your market or in your region who is responsible for digital retail media and 65% of the manufacturer said, yeah, we do. That's great. You would think, okay, there's a lot of visibility there. There's going to be clear ownership there. But then when you start breaking into the different elements, that confidence disappears. And this is where that inconsistency comes in. So you asked about ownership, right? So budget. Who owns the budget in digital retail media based on the responses that we've had? Trade marketing 28% of the time, commercial, 30% of the time, marketing 27% of the time, digital commerce, 15% of the time, no consistency at all.

Lauren Livak Gilbert (20:34):

Do any of them say there's like joint ownership where it's like three departments or own? No, they said individually.

Gregor Murray (20:40):

Okay. No, it's all, who's got primary responsibility for the budget? So who's the main owner of it? So basically you've got four departments, and roughly speaking, three of them have broadly the same level of ownership across categories, across markets, across regions, across brands, channels. And then you've got one that is occasionally involved in it. We asked about who is the primary owner of your digital commerce, digital retail media strategy, right? Digital commerce team, 34% of the time media team, 22% of the time, the commercial team, 5%, marketing 2%, and everybody else, all of the other functions kind of the rest of the time. So again, there's no real,

Peter Crosby (21:21):

You seem to say media was some scorn, or at least, well, I shouldn't cast pejorative on it, but was it,

Gregor Murray (21:31):

So the reason why I had a little hesitation in my voice there is because actually in a lot of the cases, the media team are third party agencies. So it is basically the manufacturer passing over responsibility for their digital commerce strategy to a third party with a vested interest in making money from buying media that's marking your own homework. I mean, I'd love to have that gig. I really, really would. Anybody that wants to pay me to do their strategy and book their media at the same time, happy days. But I say it with a hesitation because manufacturers need to control this. The amount of money that is involved in it, tens of millions of dollars across multiple retailers, multiple networks, every single year, they need to be controlling it. And a lot of the time, yes, there are some manufacturers where the media team is in-house and all credit to them for doing that, but in the majority of cases that I'm aware of, media teams are typically aligned more to agencies and media buying houses than they are necessarily internal to the organization. We,

Peter Crosby (22:50):

Sorry, I'm endlessly curious, which is probably going to get annoying very soon. But do you feel like, are there lessons to be drawn from the birth and maturity of the SEO, or sorry, the Google ad buying process and all of that, or any of that stuff where we've seen what a maturity curve looks like here? Or is this really different and there's something kind of wonky about this one that's going to just, do you know what

Gregor Murray (23:26):

I mean? I think that's a really great question. I had the same conversation with somebody, but from a slightly different perspective earlier on today where they were saying, are there lessons to learn from social commerce, from social media, from investment into meta and what have you? Are there parallels to be had? And in some cases, yes, I think there are. The difference here though is that, again, for the majority of the manufacturers that we're talking to, the media is being spent in the place where the majority of their sales are also being generated. But if you are a big multinational multi-brand manufacturer, a very, very small percentage of your total sales is being generated on Google or on Facebook, but it is being generated in Walmart. It is being generated on Amazon, it is being generated in Target and Kroger and Albertsons and everybody else.

(24:21):

So while there are some parallels to be learned from above the line, digital media that the majority of these manufacturers, it doesn't carry through to the point of purchase, the point of sale to a place where their performance is actually generated. And so I think there is a slightly different context that needs to be learned here, but we need to learn it really quickly because while we're not, all we are doing is enhancing the retailer's margin. And when Walmart is standing up and saying 30% of their operating revenue is now coming from media won't be long before it's 50%. At what point, what are they? Are they a media house? Are they a retailer? Are they a hybrid of the two? Can they be a hybrid of the two? I'm sure they're thinking about this, and I really cannot wait to hear what they've got to say on that subject. But there are other retailers that are close to 50% already. Yeah, Amazon already make more money from selling media than Walmart make money from selling products.

(25:28):

The retailer p and l is being reshaped live in front of us. We've never seen this before. Retailers are going from 1.8% to 3% margin businesses to shortly becoming 5, 6, 7, 8% margin businesses, which used to be the discounters. How is this going to change their approach to everything? It's going to evolve very, very quickly, and manufacturers are funding it. If they don't get a handle on it very, very quickly, they're never going to be able to walk this back. I remember coming on this podcast the last time, and I was talking about digital shelf optimization. One of the things I was saying was no data, no dons, right? I had T-shirts printed. I even have that right? I say it so often. We had tshirts printed for it. No data, no dollars, particularly when it comes to digital retail, media manufacturers are still handing over money in return for no data.

(26:30):

The benchmark shows us that the challenge that they now have is because so many of our end upper marketplaces as well, and because there's so much competition for media now with so many other manufacturers, if one manufacturer doesn't accept no data in return for their dollars, somebody else will. And this is putting a huge challenge to manufacturers. They've got to try and make the ROI. They've got to try and manage constant calls for more investment into media at a time when their cost of goods is going skyrocketing. The price of coco last year went up by 300%. Manufacturers are being squeezed from both sides. They're being squeezed from raw goods, they're being squeezed by the retailer. And it's not like they haven't spent the last 20 years being squeezed from both sides. Something's going to have to give at some point. And sadly, if manufacturers don't get a handle on this soon, what's going to give is them and their profitability in general.

Lauren Livak Gilbert (27:35):

It already is Gregor, right? I think we're already seeing that shift. And I was actually speaking to a bunch of leaders at CPG companies the other day, and one thing I thought was interesting was one of the companies was like, we need to pivot the way we think about our retailers as media companies, but that means we treat them differently. And that's a muscle that the brands need to understand that the retailers are media companies, but the retailers are also trying to figure out how to be media companies. So there's learning on both sides, and it's sometimes unclear who it is you need to talk to make these transactions happen, how you need to have a collective conversation across the retailer team who you need to pull in. And then the brands, I don't think they understand necessarily how much, to your point, they're feeding the retailer just their dollars.

Gregor Murray (28:24):

Yeah, yeah.

Lauren Livak Gilbert (28:25):

But if you shift it to they're a media company that I'm working with, it shifts your perspective.

Gregor Murray (28:31):

Yeah. Look, I've been criticized a couple of times now for being negative about digital retail media, right? I've been called a naysayer on digital retail media. I've had retailers message me saying, this isn't the reality of how things are. Stop being so critical. I want to be positive about retail media. I want it to be the hugely engaging customer generating incrementality driving medium that it is meant to be. But when I look at the reality of what I'm seeing in the benchmark, it doesn't match up with the reality of what manufacturers are saying. And I'm really concerned about it. And I made a comment on LinkedIn. It's where I was criticized because I put up a post which basically said, in an age when the only way to know if your retail media campaign was successful is because it wasn't unsuccessful. That isn't a good enough metric.

(29:32):

The only way that you can prove that something worked is because you can't prove that it didn't marketing. And that isn't right because we're spending millions of dollars every single year on this in the hope that it is going to generate the elusive incrementality that, and I know you want to talk about this. I'm going to jump ahead just a couple of second. We asked every single one of the respondents, what's your definition of incrementality in retail media? And I put all of these comments, and some people have written me a hundred word essays on what incrementality means for their business. I put it into chat g pt, and it crashed. It was like too much you Chad gbg. Yeah, please give it to me in smaller chunks. Because I was basically saying, take all of these responses and turn it into one definition for me. And it came back to me and said, please give me the data in smaller chunks. I can't do that.

Peter Crosby (30:33):

Oh my God. Okay, that's a new T-shirt. I broke chat, g pt.

Gregor Murray (30:38):

Yeah, defining incrementality, broke chat, GPT. That's the T-shirt, right? But that's the reality of where we are at the moment. There's no consistency. And that's one of the big takeouts from this benchmark report as I'm writing it, is there's no consistency in ownership. There's no consistency in budget, there's no consistency in investment. There's no consistency in what incrementality means. And the thing about CPG is it's kind of been set in stone for like 70, 18, 90 years, right? These manufacturers have been trading with retailers pretty much the same way for decades. They've optimized their supply chain, their value chain, everything like that. And so there are standardized ways of working that every manufacturer basically does. They all think they're unique, but every manufacturer typically operates the same way. And then it comes to things like digital retail media, and there is no playbook. There is no standard definitions.

(31:39):

What metrics should we be using? The 65% manufacturers are still saying we're using ROAS as the primary measure of digital retail media success. And yet every single one that I speak to when I say, but the best way to get high ROAS is to just buy your own branded search terms. You'll get an amazing roas, but guess what? All you're doing is advertising to people that we're going to buy anyway. They all know that. They all know that already. And yet they're still using ROAS as that primary measure of success. And again, that's just not good enough.

Peter Crosby (32:11):

Is there a part of this Gregor, that when something's this complex and there are these many challenges, it sounds like a breeding ground for imposter syndrome in a leader, and when there's not clear ownership, then you either can sort of shift over to the side and go, well, that's not really, I don't really own that. I'm just doing my piece of it. And this is not criticism, it's just a natural human response. Or I'm thinking back to when you were saying, well, some people are just handing it over to their agency. Well, that's because it is so freaking complex and so complicated and broken at so many retailers just because it hasn't matured yet that in some ways the best thing you can do is hand over to people that are doing it for a bunch of other people and probably know best how to, you know what I mean? I'm trying to think of how to get over that. And I think

Gregor Murray (33:12):

It's handing it over to people who are experts. Yes. I completely agree with you handing it over to people who also have a vested interest in making a profit from how you do it. I have a real issue with,

(33:30):

I think part of the problem here is that, and I hear this a lot, we've all heard this in our careers. We need to simplify this. We need to make it simplify that. What's the simple way of doing this? What are the two things that we need to do here in order to do this? Well, it's too complicated. In politics, they call it the 10 word answer. If you can give the 10 word answer to a problem, you are halfway to solving it. But retail media is too complicated for the 10 word answer. We have to lean into the complexity. Manufacturers are going to have to build capability to be able to deal with some of this stuff, and they're going to have to do it in house because people who've got a vested interest in profiting from you, not necessarily doing it as well as you could do, are not going to help you get where it is that you want to go.

(34:20):

So I think you raised an interesting point there, Peter, around do people necessarily understand the complexity of the issue, the leaning into the complexity of the issue? And I think the simple truth is no. I mean, I've spent weeks going through the data. I still don't consider myself to be an expert in retail media at all, and I can't understand how a lot of people at manufacturers certainly are. I think though we need to start with conversations. We need to start with questions in relation to retail media, and it starts right at the very top of the organization. And the first one that I would ask is, what do we want the role of retail media to be for our organization? What purpose is it going to serve for us? Are we using it to drive immediate conversion or are we using it to drive future demand?

(35:16):

Build awareness, build consideration. Now, clearly it's a balance of the two, and it's going to change depending on certain conditions, but I think we need to start by approaching it of is it about a media conversion? Is it about generating for the future? What is the right balancing point in between? The other thing we need to decide about is, is it about incremental purchase? So getting new people to buy new brands, getting new to brand, is it about incrementality or is it about repeat purchase? Because all brands are actually reliant on getting their existing customers to buy more or buy more often. And again, there's a balance between the two. Now, I was talking to a manufacturer about this two nights ago. We were having a very intricate conversation about if you marry those two things up, you create a four box grid. And so you have immediate conversion and future on one access.

(36:12):

You have incrementality and you have repeat purchase and another access. You end up with four boxes. And each one of those boxes, one of them is going to be about building baskets. One's going to be about creating demand, one's going to be about protecting your existing equity, and one's going to be about preventing your existing customers from switching to arrival product. And then we start working through, okay, well, in what situations, what budget do we want to put against each one of these things? And then we want to talk about which media channels are most effective within these things. Which retailers provide the media channels that help us deliver those objectives? What proportion of our budget do we want to put against each one of these things? How frequently do we want to do it? What strategies, what tactics, what enablers are we going to put in place to make sure that we are maximizing the opportunity in each one of these grids? Now, I've just said we shouldn't try and overly simplify this, and then I've gone away and immediately overly simplified this. But yeah, the more I get, perfect

Peter Crosby (37:16):

Podcast. Thank you.

Gregor Murray (37:17):

I know, right? I've contradicted myself and undefined peasy. I've done this three times. Now I can do it that quickly, right?

Peter Crosby (37:25):

Yes, exactly.

Gregor Murray (37:27):

I think we need to start with some basic questions and then dig deeper and deeper and deeper and deeper. And we're going to need to bring the partners in. We're going to need to bring the agencies in, the media, booking partners, the creative agencies, in some cases, the retail media networks. We need to bring them into the conversation and start having those conversations about how to get the most out of this for everyone, not just for the retailer's profits. Two thoughts.

Peter Crosby (37:55):

Oh, sorry, go ahead.

Gregor Murray (37:56):

No, go ahead. Go ahead.

Peter Crosby (37:57):

No, one thought that I have was that when you're doing the four box, which I love, the four box I would imagine should include what are the KPIs for each one of those various approaches? Exactly. And agree on that even before you get to the next thing. Because if you don't understand what KPI you're going to use to measure whether or not it worked, then what's the point? And if you discover there is no great KPI, well, then that's good information as well.

Gregor Murray (38:26):

Yeah. And exactly. And ROAS is probably not going to be one of them for any of those boxes. And that's the thing. I think that's, but certainly new to brand is going to be important in some of those boxes, but not all of them. ROAS may be important on some of the occasions, but not all of them. Things like advertising, cost of sales, a rolling average advertising cost of sales. Again, it's going to be relevant to some instances. It's not going to be relevant to others. But we can't treat everything as being the same because this isn't cardboard in shops anymore. This is highly dynamic, highly complex, ultra targeted. It's an opportunity to create incrementality if you want to, but that might not be always what it is that you are trying to do. So don't try and always create incrementality. Sometimes you've got to try and create future demand, and your calls to action are going to be different. Your media channels are going to be different. Your creative is going to be different. Your targeting is going to be different to treat it forwarding. And sometimes you're going to get an immediate conversion payoff, and other times it's building to the future.

Lauren Livak Gilbert (39:33):

And Gregor, I kind of compare this to, there was always the conversation about PDP content. Should it be the same PDP content for every retailer? The answer is no. Right? You have to have different versions of the content based on the algorithm, based on the consumer. And I think we're finally getting to that place from a retail media perspective. You can't just broad brush stroke. This is my retail media plan for every single retailer, but they're serving different purposes. And I also think about it as your omnichannel strategy. You're pulling different levers at different times based on what you're trying to achieve and who you're talking to. But nobody thinks about retail media like that.

Gregor Murray (40:09):

Yeah. I mean, nobody thinks about retail media like that, right? Here's another thing that I find very few manufacturers are thinking about in terms of retail media. Many, many manufacturers are what I would describe as investment heavy capability pool. They're putting millions and millions and millions into investing into retail media, but not spending any money at all building their internal capabilities. And those manufacturers are at huge risk. And I don't understand why manufacturers are prepared to make long-term million dollar commitments to investing into Walmart or Amazon or Target or Gregger or whoever it might be, but they're not prepared to make the investment into creating talent in their organization, developing that talent, growing that talent, increasing that talent, improving that talent.

(41:01):

For every million, yes, you're putting in put in a headcount for the love of God, put in a headcount, it's going to generate you more back than just chucking another million dollars into a retailer. Build the capability. And yeah, I get that. I'm probably preaching to the converter when it comes to the people that are listening to the podcast, because they do tend to be the manufacturers that are more engaged with this stuff. But honestly, if you are putting millions into retail media and you haven't grown your team, if it's still a fraction of somebody's job, you are just throwing money down the drain. In which case, throw it at me. I will gladly take it, and at least I'll give you some advice on the back end.

Peter Crosby (41:46):

A side business. Exactly.

Gregor Murray (41:47):

Yeah, exactly.

Peter Crosby (41:50):

To close out, if anyone uses this to time, their 35 minute runs, we've gone over, but this is fantastic. But to close out, when I hear data and tell me if my impression is wrong, when I hear data, like all of these things are spread out over departments, different people own it, that tells me that most companies are making decisions on who owns it based on a human being that they trust to give this money to that to a certain degree. They're going, alright, this is happening fast. There's a lot going on here. I need somebody that I can take this, that I know I can have a conversation with. If I'm the cfo, maybe I'm wrong, and maybe it's more random than that, but let's just say one way or the other, it's all over the place now. And so if you were to guide people on where you see the leader facing the leadership companies in this segment doing, how are they choosing where it lives? Is it human? Is it organizational? Is it some combination is? It's depends and there's no great answer.

Gregor Murray (43:07):

One of the things that I'm doing is I'm building another four box grid, and it is the classic crawl, walk, run, risk grid. And about 45% of the manufacturers that have participated in the benchmark sit in that risk box. By the way, they're the ones who are overly investing, but have capability for the ones that are doing the best, the ones that are matching their investment with their capability. They're the ones that have at least one person that is solely responsible for digital retail media in their organization. Now only don't really mind where that person sit, whether they sit in marketing, do they sit in commercial? Do they set in trade marketing, customer marketing? It doesn't matter. As long as you've got that person that's making sure that every market is, every function is delivering on their commitments, that every campaign that you've done is being reviewed and understood, what should we do differently next time?

(44:05):

How do we make it better the next time around? How do we get more out of our spend? If they're coordinating, they're bringing everything together. If they're being really deliberate about where money is being put, why it's being put there, who is being targeted? Which channels are most receptive to them? Which retailers are they shopping in? If there is somebody with overall control, that for me, it's better than nothing. Where it sits is of irrelevant. As long as somebody owns it and that person is responsible and they're being backed by the organization saying to them, we're spending tens of millions every single year, build us the team to do this the best way we possibly can. For us, it is going to vary by category. It is going to vary by market. It is going to vary by brands. I totally get that. But if you're not having somebody responsible for it, again, you're just throwing money down the drain, you're not getting anything back in return for it. And as my old sales trainer would've said, if you want to give money away for free, go work for a charity. Everybody else has to earn money in order to make money, in order to earn money.

Peter Crosby (45:17):

We would totally put some classic movie music behind this last answer because it's very story. Very, exactly. No, it should be triumphant. I hope this inspires some thinking as people at this point. You're thinking about, alright, what are we doing in 2026? And this is the time to be thinking about how you want to restructure what you're doing in retail media to get the most out of your investment. We have, I think, a smaller version of the benchmark report that's available on the, is this true Lauren available on the DSI site?

Lauren Livak Gilbert (45:52):

Yes. If you remember, you just go to the resources section and you can find it there.

Peter Crosby (45:56):

Perfect. And

Lauren Livak Gilbert (45:57):

Digital shelf institute.org. Sorry, I should,

Peter Crosby (45:59):

Oh,

Lauren Livak Gilbert (46:00):

If you, you're listening to the podcast and you don't know the name of the website. It's Digital Shelf Institute Tower.

Peter Crosby (46:05):

Oh my God. You should totally be the lead host here. Yes, I'm messing up all over the place. Gregor number three, knocked it out of the park. Can't wait for the home run. Crushed it. Yeah. Yeah. It's terrific to have you. Thank you so much for sharing your passion and your clarity on this stuff.

Gregor Murray (46:25):

Absolutely loved it. Love what the Digital Shelf Institute are doing. Thank you for giving me the opportunity to come on and talk about the benchmark and the results. Thank you to all of the listeners that participated in all the manufacturers that have participated as well. We really appreciate it, and we're not able to share insights like this and have conversations like this without the support, without people like you and people like the manufacturers that have taken part. So thank you to everybody that does that, and please carry on benchmarking.

Lauren Livak Gilbert (46:50):

Thank you, Gregor.

Peter Crosby (46:52):

Thanks again to Gregor for the great data and the spirited conversation. A reminder that a DSI specific version of this study can be found in our resources section at digitalshelfinstitute.org. It's only available to members, so register while you're there. It's free and almost entirely painless. Thanks for being part of our community.