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Interview

Interview: Rob Gonzalez Spitballs Commerce With the CPG Guys, Sri Rajagopalan and Peter V.S. Bond

Podcast cross-over event! Rob Gonzalez recently went deep on commerce in 2021 with the renowned Sri Rajagopalan and Peter V.S. Bond on their podcast CPG Guys. A rollicking survey of some of the biggest trends and opportunities in the year to come in commerce.

TRANSCRIPT

Peter:

Welcome to unpacking the digital shelf, where we explore brand manufacturing in the digital age. One Peter Crosby executive director of the digital shelf Institute here, podcast crossover alert. My co-host Rob Gonzales recently had the tables turned and went deep on commerce in 2021 with the renounced Sri Rajagopalan and Peter SV bond on their podcasts, CPG guys, a rollicking survey of some of the biggest trends and opportunities in the year to come and commerce. Take a listen.

PVSB:

Hello everyone. And welcome to a special episode of the CPG guys podcast. I'm your cohost Peter VS Bond. I'm also the vice president of retail strategy at power view for product ratings and reviews software company. This is a special episode because it will also be appearing on unpacking the digital shelf podcast, which is produced by our friends, Peter Crosby, and Rob Gonzalez at the digital shelf Institute and is designed to help manufacturer strategize to win in the digital age. A little more about that and in a couple of seconds, as always, I'm joined by my co-host, he's an e-commerce SUPA star of notable. CPG is like PepsiCo J and J and Revlon. He's also an accomplished entrepreneur. He will tell us all about that in a minute. He's the Wiz to my Philly cheese steak the Carnie Assata to my French fries. That's the San Diego thing. And of course Jersey shore, the Taylor ham to my egg and cheese sandwich. Please join me in welcoming my friend Sri, Rajagopalan. Sri, How are you today?

Sri:

I'm doing awesome. Peter's always a pleasure doing this week or week with you and Rob to be noted. I think he earned the title of the college bragging rights that you were referring to with this superstar. 

PVSB:

So you're still stinging from the Yankees loss last year. Asterisk season is like the Bay month's seven 61 is bragging rights. We got, we got the trophy. Doesn't matter how you got it. Go ahead and free. What do you, what do you do? What are you doing to pass the time these days?

Sri:

Yeah, so when I'm not doing this with Peter, I'm also helping logs and a hundred percent natural supplements brand to help aid your sleep energy, better movement, stress, and anxiety relief, mailed wellness to check us out at www.zenfuel.com or simply search Zenfuel on Amazon. Zenfuel, your where your happiness is our ambition, and I am thrilled to do this episode and talk to a practitioner from the industry. 

PVSB:

Yep. Great. Let me, before we get into that, let me remind our audience that you can find all of our content, our audio podcast is now on, wow, 20 platforms, Sri. I don't know if you know, we just got listed on Pandora. So that's big. We have a YouTube channel that includes playlists from our profit series, our retail series and our women leadership series. We have so much more it's all free, but w Sri and I have Venmo Venmo accounts rather. And if you want to send us money, you can, I'm not going to stop you from it, but just go visit CPG guys.com and you can find it all there. So the reason we have a special episode playing on both CPG guys and unpacking the digital shelf is because our guest today is from the digital shelf Institute, which he and his colleague, Peter Crosby founded in 2019. He's also, co-founded, Salsify the premier commerce experience management platform that empowers brand manufacturers to win on the digital shelf. That is phenomenal.

PVSB:

You've got a blue chip background of credentials. He worked at Oracle and IBM Sri. We've heard of those, right? Those are good companies. I'm also pleased to share that he like myself earned his undergraduate degree from a little three university Williams college. And we are always happy to have little three alums on the podcast. I think you may be the first one in addition to me, but anyhow, it's great to great to have you go NESCAC by the way ESPN said NASCAR, new England, small college athletic conference, the only remaining truly amateur athletic conference in North America. So that's always good. No idea what these guys have. I know, I know you don't have to Sri. It's a little it's beyond you. If Virginia tech worried about your stuff please join me in welcoming Rob Gonzalez to the podcast, rod, how you doing today? I'm

Rob:

Doing great. Thanks so much for having me.

PVSB:

Absolutely. And for those of you watching on the YouTube channel, you see that I'm blinging out my Westland alum sweatshirt I'd say it's a little bit of an homage. As I said to Rob before the podcast, it could be worse. I could be wearing a sweatshirt from Amherst. There we go. So he's got some, he's got some bling too from the, from the shelf Institute. So that's wonderful

Rob:

This week. This is all

PVSB:

I can do to absolve that's that's good shirt. That's good stuff. And Rabo, we'll send you one of those t-shirts as well. But before we get into this Rob we'll do this at the end of the episode too, but I want people to be able to listen to this, to be able to do that. Can you tell how people where they can find more about Salsify in the digital shelf Institute?

Rob:

Yeah. The digital shelf Institute is at the digital shelf institute.org. We've got the podcast, we've got a bunch of member produced research reports, including one that Chris Perry has been working on. He was a former head of e-commerce at Kellogg and Reckitt Benckiser and other places like that on retail understanding retail ad spend on the, all the retail ad programs that are launching everywhere. Walgreens being the latest one announced this week. And, and so there's a lot of stuff that you could find on unpacking the digital shelf and the digital shelf institute.org. Otherwise just find me on LinkedIn. Okay. Rob Gonzales. I'm the bald guy.

PVSB:

Anyhow, thank you. That that's really great. Now I'll say Chris Perry is a friend of the CPG guys podcast. He is he's both appeared as a guest and co-hosted with me and in SSRI's absence. So we're very familiar. I think we're going to pick your brain about that research in some ways. Yeah.

Sri:

Rob be noted when you're not doing this, like me are chasing guns.

PVSB:

There we go. So let's just jump right into the questions I know Sri and are excited about this conversation because I mean, me personally, because I think the digital shelf is where in my, my alter-ego world of working with power reviews I spend an inordinate amount of my time worrying over how brands and retailers can engage consumers. So I think there'll be some great content we can discuss there, but let's just start off very simply. Rob, why don't you tell us a little bit about the mission of the Institute and why did you and Peter decide to found it and what, what kind of other content and learnings can people get by getting involved in this?

Rob:

Yeah, so the history, if you go back to the two thousands I worked at a company called Endeca technologies, which Oracle acquired for a little over a billion dollars in 2011 in DECA invented search navigation, merchandising technology for e-commerce. And so we built the search and navigation and merchandising capabilities of walmart.com, target.com, home depot.com, all the big ones. Amazon tried to acquire and DECA about 2005 to become what would, what would become the AI and algorithm. And so I had a lot of experience working on the retail side of e-commerce and then in two thousands, the retailers were all moving towards e-commerce, at least the big ones were, but the manufacturers still really couldn't even spell e-commerce. It wasn't something that, that people at J and J or really anywhere, anywhere cared about. So ever since Oracle acquired Endeca and founding Salsify in 2012, I've been spending a lot, all my time, really on the brand manufacturing side of the supply chain.

Rob:

And as you guys know, as the CPG guys, there, aren't very many places to go. If you're a brand manufacturer and you're trying to learn digital, you're trying to win online. You're trying to make this transition from brick to Omni. And we want, we founded the digital shelf Institute to be a place where a brand manufacturing thought leaders could come together and learn as peers and try to lift the whole industry and, and accelerate forward. All of the other places to congregate that that had been around the last 10 years tended to even on a honestly, even today be more retailer focused and all the big conferences, all the big shows, all the podcasts, yeah. Really heavily weighted on retailers. And we felt that the manufacturers needed a voice.

Sri:

You know, when you said in DECA, it brings back a memory from 2009, when I was running the technology innovation center at PepsiCo, and we

Sri:

Were looking at best buy and its use of Endeca to help him consumer down select televisions or the exact product skew that they wanted to find. And we were, we eventually ended up getting it at PepsiCo for our brand websites to help consumers with the dropdown. So like bars, et cetera, you know, when things that are like obvious these days and people take for granted back in 2009, we were actually talking to y'all on how this can even be put in play for a consumer down. So like, it was a big deal back then. That said, when I think of Salsify the first stop that comes to mind, especially from my Alma mater is Johnson and Johnson and Revlon where we used it is the word PIM. I would love for you to explain to our audience, what is a PIM, how can it enable success in a brand support in the journey of a brand, especially as brands navigate packaging and the future of branding away from physical to product detail pages as you're in copy and the search bar, which is how things are found today. I believe your thoughts on that, Rob.

Rob:

Yeah. So the, it, it's now I think a big topic for manufacturers and it absolutely was not a big topic for manufacturers 10 years ago. And the reason is the shift to digital. So PIM, for those who don't know the term means product information management, and it's a software category that's been around for over 20 years now. And what the PIM does in essence is it gives you a center, single source of truth for your product data and provides things like workflow insecurity and governance to allow you to make sure that the data that you're storing and mastering within the system is exactly as you want it, want it to be right. So the goal of a PIM traditionally is to create a golden record for every single product that you sell and make that golden record available to other systems within a company. Now, our, our view on Pam and, you know, we founded Salsify around 2012.

Rob:

Our view on the traditional pins is that this sync, this idea of a single golden record is actually a broken idea. I mean, think about your product, if you're J and J your record you're any, any manufacturer that has broad distribution, and you look@thewaythatyourproductcanberepresentedonamazon.com on your own Shopify site, on Facebook marketplace, a tic-tac on Walmart, on Walgreens. These websites look totally different from each other. They've all got different rules and regulations about how long a product title should be, how many images you can have, how many feature bullets you can have, how long the feature bullets are and so on and so forth. There's just a huge variety of content differences between, between all of these different sites. So our view of the role that a PIM should play in a manufacturer in the digital age, you know, we're in 2020 now is the PIM has to be multichannel by default.

Rob:

Instead of there being a golden record, there's got to be a golden Amazon record. There's gotta be a golden Shopify record. There's gotta be a golden Facebook record. And these records necessarily are different from each other. They're different between because the search algorithms of these sites are different. They're different because of the layout to the sites are different, the different, because the content requirements of the sites are different. And, and that's the, that's the take that we've got in the PIM market. So the traditional players like SAP Hybris, or Informatica or Steve-O, or in river or river sand, or all, all of those folks were built in this era of a golden record focus. And, and we're really the, the first to take an omni-channel view on product product data, and product

PVSB:

Content management. That's terrific. You mentioned tick talk at some point, Rob, we're gonna have to pick your brain over whether the CPG guys should have a Tik TOK account because we've are, we've got some people saying, yes, our audience saying no, but we'll, we'll leave that for another day. I was in a, in a quarterly business review yesterday, Rob, with a mutual client of power reviews and Salsify, and, and we were talking a lot about how they leverage UGC on the product page particularly in product pages where where ratings and reviews don't exist. But what I want to ask you about is they all seem to hunger for an understanding of what moves the needle. So can you offer our audience, your position on what are the four or five things that a brand just has to get right on a product page for it to sing? Because I think increasingly, increasingly we all recognize that the product page is very much at the top of the funnel. And if they can't get that right, nothing else is going to work. So what are your thoughts on that? Yeah, man,

Rob:

There's a, there's a lot in there. I, my view on the product page, I think is a little different than, than most, which is online. The challenge is the product pages, the whole funnel and traditional brand manufacturers. Like you talking about CPG, they've got different parts of the funnel spread out across different functions within a company. So you've got the branding team, which is buying TV spots and they're being measured on reach and things like that. And then separately, you've got the trade teams, which are, you know, through co-op and marketing spend within the retailers. You've got the circulars and the end caps and shelf talkers and, and things like that, that they're investing in to drive conversion. And each team can sort of operate at its own section of the silo. There's the awareness guys over here. And then there's the conversion POS guys over there on the digital shelf.

Rob:

You don't actually know where in a consumer's journey they're gonna, they're gonna find the product detail page. It might be the first time they've ever, ever heard of your brand, or at least the product line within your brand, or it might be the last time that they hear about it just before purchase. And we bought, we've all been in this situation where I, a couple of years ago I was buying a new blender and I was on one of these cross country flights. I had nothing to do. And so I started researching blenders. I go to Amazon, I searched for blender because Amazon is increasingly the search bar for products. And, you know, I don't let me know how many blenders show, but there's a ton of blenders out there. You've got osteo, you've got click KitchenAid, you've got Ninja, you've got Nutrabolt, you've got Breville.

Rob:

You've got, I mean, there's just a ton of blenders that are out there. So, so I started like everybody else opening up browser tabs and all of a sudden there's like 40 browser tabs. And I'm looking at the images of the different blenders. I'm looking at the, the feature benefits. I'm looking at the reviews and I'm trying to narrow down to a small set of blenders. And then once I get to that small set of blenders, I go to YouTube and I say, you know, Ninja versus Breville Ninja versus Nutrabolt, right? And there's people that'll do the live YouTube reviews that show them blending side to side by side, show the results. And then maybe I'll go back to Amazon. And and by the blender, or I think at that time, I actually did a price compare. So I went to Google and I did a search for the, for the blender that I ended up choosing and, and finding where I could buy it relatively cheap.

Rob:

And I think that type of journey is pretty typical. So in that case, the Amazon product detail page for the blender searches has got to support search and discoverability, which means that the title and the feature bullets have got to be optimized for showing up high in search. And it's got to got to support branding because it's literally the first time that I'm seeing some of these brands. So the image gallery at the image gallery is just like the front of the blender, the side of the blender, the back of the blender, the bottom of the blender, that's a bad experience. The image gallery has gotta be involving UGC. Like you're saying, user generated content, blender and usage things you can make with the blender stuff that sells, you know, aspirationally what the blenders brand stands for. And, and so on and so forth.

Rob:

And then, you know, of course at the bottom of the funnel, there's gotta be good supportive price and fulfillment and, and things like that. And, and so, so my view of the product detail page is that companies first and foremost, need to treat it as full funnel experiences. And we're the number one thing that most get wrong is they don't, they, they neglect the branding aspect of it. They treat it mostly as a transactional point with pictures of the product. And they, they don't, you know, like you're saying they don't use user generated content. They don't use brand assets as aggressively as they should. Like you look at Amazon, go to go to go to an Amazon product, go to like Kindle fire. There's not one classic product shot of the Kindle fire. They're all about the Kindle fire brand and usage. And it's all you, it's all, it's all like modern e-commerce marketing and most brands still don't do that. Most brands, you still see the front of the box, the back of the box. And that for me is the number one thing they get wrong. Yeah. Rob, I can tell you that I constantly

PVSB:

Refer on this podcast to research done, particularly by the beam art Institute around product page study. And they say very clearly that the image carousel at the top of the page is the most important part of the product page. In that one, you need multiple images. And two, if you're just doing to your point product shots and angles, you're missing the point. The, the image gallery is in the absence of actually physically holding the product for the first time your, your unique opportunity to help articulate what the scale of the product is. So showing someone, holding it, both displaying the product and some words and data so that you can communicate, what would otherwise be complex, complex concepts if you're not doing that, and then understanding that the image carousel can, can be much more to your point, then just the image of the product in the absence of other components of the product page. It is the fundamental way you can, can build trust in your product, help them understand really what it is and, and convert it. So

Rob:

I'll give you a great example. There is like the data shows that the first thing a shopper does typically is they'll mouse over the images in the gallery, and you don't have to click on it. If you just mouse over the it, the, the, the zoom image we'll, we'll switch out. Right? Yup. And so a smart thing to do then is to use the image gallery, to make whatever key points and feature points that you want to make about the product. Most people don't read people don't go to the feature bullets and read them most of the time. And so if there's a major point that you want to make, you can't make it in the feature bullets, you've got to make it in the title or the images. And so, so one example that I really liked in this space is I like it because it's like a relatively boring product and a boring product category, but it did branding quite well is a GlaxoSmithKline Sensodyne brand.

Rob:

Since I'm brand is for people who have sensitive teeth, right? It's not, not exactly a glamorous product, but when you mouse over the image gallery, the second image was an image of acidic foods. And the third image was an image about, eh, the third image had mostly texted, said, acidic foods, you know, cause your teeth to ache Sensodyne, right? And so rather than use the feature bullets to make the product case and the feature case in the brand case, they use the image gallery creatively to make the points that they want to make, because they know that people see that way more than they see the feature bullets. And so, I mean the really good brands that are out there that digital native brands like anchor just absolutely dominate this type of point of view and classic CPG brands tend not to do as good a job on a classic CPG brands. I think it may be maybe legacy due to having spent so much design time on the physical package. They want to show off the physical package. And that's just, that's just a mistake, you know, in the journey

PVSB:

Zinfandel, if you never get over to products, Zen

Sri:

Chills, Sano, zest, whatever the case might be over on Amazon and look at our a shelf, the digital shelf, AKA the images and the video. You'll notice it's very different from the traditional product. The only blueprint we followed is the front of bottle. And then we switch immediately to storytelling on the efficacy effectiveness as well as get into how we're different from the competition and how the product actually works. The interesting thing though, Rob is the feedback I've collectively gotten back from agencies and the industry is that's a bad idea, and I need to comply with the classic front of bottle back a bottle ingredients shot things of that nature things of that nature and lifestyle images, things of that nature, but I've chosen not to. But that said, you know, as we define this notion of the PDP as the entire funnel, a question that comes to my mind at least is if brands are still thinking of the PDP as merely bottom of the funnel, then they're still sticking in their marketing mix to advertising on offline mechanisms in big ways, such as television. What evidence is there that this is irrelevant? Or is there any data points or what have you all seen case studies, et cetera. And then with this data, what should brands be doing? Like how does a brand really get started on this journey of the PDP is the full funnel.

Rob:

Yeah, let me, I have two great stories there about the online shelf being your offline shelf. And the first is this is an old oldie, but goodie when by brands was acquired by Dr. Pepper Snapple group for over a billion dollars, the Dr. Pepper Snapple group funded a market mix model study that John Denny, who was the head of e-commerce at buy brands. He's now, he's now a venture capitalist in New York designed and the market mix model study for the first time included Amazon advertising in the mix for a regional store sales. And what they found unequivocally is that when by brands increased Amazon advertising spend then sales of byproducts, Danny oxidant drinks in CVS went up when they decreased Amazon advertising spend CVS sales went down and it was black and white. So that's just a, a single advertising data point that shows that looking at these online channels and, and the advertising spend that brings you top of shelf online, you know, the first, the first results in the, in the SERP, those are the ways that you're going to drive in store sales a few years later.

Rob:

And this is a story from Proctor and gamble. A few years later, Proctor and gamble found the same thing by accident. They were launching the tide pure clean brand, which is the plant based detergent that came out a couple of years ago. And they were launching it mostly in regional. It, through regional distribution, you know, their market studies showed that, you know, the coastal populations and some of the more liberal populations in the middle of the country were the ones that were most likely to gravitate towards plant-based detergents. And so they were launching it through like Albertsons on the coast and things like that. And the, the, the PNG team screwed up the lunch and they screwed up the launch because the packaging wasn't designed for Amazon. So they, the, the pure clean brand wasn't SIO C compliant, SOC is shipping your own container.

Rob:

And it meant that the product showed up on the shelves at Albertsons, but not on Amazon on day one of the lunch. The first I forget the timeline was six or eight weeks goes by when the, when the product is in store, but not online. And the sales report, the sales are very disappointing for tide. And, and they're not really quite sure why then the product goes live on Amazon and the Procter and gamble team. They didn't change their Amazon sales targets for the year. Even though there was a delay of a couple of months, they said they want it to play catch up. So they just dropped a bunch of money on promotion to have a really big spiky launch on Amazon to drive engagement with the PuroClean brand on Amazon, as soon as they started doing this, the Albertson sales picked up.

Rob:

And so it's basically the Amazon launch power, the Albertson's launch. And, and there's a there's, I mean, I'm using Amazon as these examples, but there's a whole bunch of others. Two, two that are really interesting that are coming out. One is that Walmart buyers who have almost entirely turned over since Walmart, but yet the Walmart buyers are increasingly in a lot of categories, not the ones that get to pick what Walmart purchases for in store sales, it's the online sales and online trending that that feeds into their decision-making process. So if you're dominating walmart.com as a third-party seller, as a, as a drop shipper, that will earn you, earn you a place on the shelf, right? And so they're winning the algorithm like literally gets you in the shelf. And another place is a direct to consumer spikes McCormick in February, launched the old Bay hot sauce on their website, sold out in 30 minutes and broke the site.

Rob:

And they use the data from that to negotiate very, very good deals with all the grocery chains to distribute the hot sauce, hot sauce is a crowded category. The world doesn't need another hotspots on some level, McCormick's able to get it on shelf rapidly because they prove the demand using online to go off upline. I mean, there's just like, there's a thousand of these stories, right? It's, it's basically the view that the online world is a sales channel in the end is is I think absolutely not correct where the, where the consumers are, where the shoppers are, where they do their research, where they're, where they're engaged, where they spend time is digital. And so the digital first physical later, that's, that's, I think the big shift that a lot of people have missed, know what the CPG

Sri:

Guys couldn't agree more with you. And we share this exact same, as well as our reading the industry. This, this industry is the reason why we felt this industry has always struggled with adopting, you know, commerce, unified commerce in a larger way this morning, Peter and I were talking to another practitioner and they disagree with the word unified commerce. We tend to stick to e-commerce, which is bottom of the funnel because of the waiver segmented and siloed in our structure, in the company, which has sales teams. And therefore Amazon becomes just another sales team at the end of the day. The huge difference is Amazon with its global and national outreach as a marketing vehicle, before it is a selling vehicle. And the brands that recognize that understand that your DDC engine is not radically different, no matter big, small, whoever you are, your website is your primary storytelling vehicle. When the consumer searches for data, insights, education, things of that nature, and the brands that recognize that and do an awesome job of it in my humble opinion, or the CPG guys, as opinion are going to be the winners in the long run.

Rob:

Totally agree. I mean, we've got not to plug the podcast, but one of my favorite all-time episodes of our interviews, we interviewed Mike, McNee just from good baby, which is, which is part of even flow. And they, they were, if you look at, if you look at CPG, Newell brands is one of, those is one of those companies that just spends like crazy on Amazon advertising. So if you're competing with Proctor and gamble or you're competing with Newell, you're just going to get buried by their advertising spend, you know, nobody has, has deep pockets. Like those guys have deep pockets for Amazon advertising. And so, so brands struggle to, to figure out how do they come out on top when they're just being just outspent by a giant pile of money. And so what, what the good baby folks did, and of course they were competing with Costco, the new brand, right.

Rob:

But the good baby folks datas, they launched a direct to consumer line for their, their biggest fans. And they did, you know, product line extension through the direct to consumer, and that's been incredibly profitable for them. And, and so the, the, this, this, you know, this view that you're taking, which is, it's like, whatever, route to the consumer that you can get this like universal commerce. I couldn't agree. I couldn't agree more with and you know, to your point on the brand.com, just the second thing, just to build on what you're saying, how many companies spend more money on their, their.com than on their Amazon product detail pages. It's like literally a hundred percent of them. But if you look at traffic, like how many people see your Amazon product detail pages, more people see those product detail pages, then we'll see your TV commercials, then we'll see your homepage there, and we'll see almost anything that you do. And, and so the way that these companies traditionally think about branding, I think is backwards. The Amazon team belongs under the CMO. The Amazon team doesn't belong under sales and sales happen on Amazon, but, but it's different right on Amazon,

Sri:

Just to wrap up this portion of the conversation. The interesting thing that is almost a hundred percent of the time, the Amazon's team sits under a sales team, but that also becomes peers with the Walmart team and the target team and from a P and L the first thing that comes to mind as a result is PNL Wars or PNL competition. And who's more profitable lose less, which I think at some point this, if, if this doesn't change, we're looking at not driving value for the money.

PVSB:

I think if brands are, if brands are going to follow that suggestion of moving it under the CMO part of it is also also a culture shift of encouraging the sharing of information between Amazon and the other sales teams, so that it doesn't look like there is a most favored nation status. You need to be using what you're learning to drive your success elsewhere. If you can create that kind of culture, then you're going to be successful. Rob, you mentioned the example around CVS and Amazon and investing against that. I think it bears doubling down a little bit more and, and really saying to our audience what it is they should do around this, but how should brands be valuing their digital ad spend, including kind of that attribution measurement outside of the individual meeting medium platforms where the investment is being placed how, what should they do to make this much more of a standard operating procedure?

Rob:

Yeah, this is, this is again, getting to the shopper journey that I was talking about earlier. The shoppers are not following the linear buying model that they had before. Hear about a product through advertising you're in the store. You recognize the product, you buy the product, right? So there's, there's not this step one, step two, step three, step four process that I think CPGs over the last several decades are used to following nowadays. It's you don't know where the consumer is going to first see whether it's on the shelf, whether it's on Instagram, whether it's through Google search, whether it's, whether it's on Amazon search, whether it's on Instacart, you just don't know. And, and, and so the, the challenge there is, if you look purely at the advertising through these online channels and counted against just sales through the same channel, you're, you're missing the omni-channel influence that especially the major search engines are going to have.

Rob:

So we've already talked about winning on Amazon is helps you win on CVS. I would argue that winning on Instacart is the same thing and Instacart launched an ad platform earlier this year. And I would, I would also argue that winning on Walmart and winning on Google these days are about the same. These are all major destinations with large audiences where audiences go there. First Kroger, increasingly Kroger just cracked the top 10 in e-commerce Kroger. Similarly, people go to kroger.com as a to shop. And so in any of these key destinations where a user will initiate anything from research and discovery, all the way through purchase, where if they initiate on the site, then you need to start thinking about it less as ads to drive sales through that site. And more as at least a mix of yes, you know, drive sales through the site, but also drive overall awareness.

Rob:

And so I look at just as a, you know, a hard line, you could look at any of the top 10, 15 e-commerce destinations in the U S for example, you could look at Amazon Walmart, target Kroger, or best buy and so forth as places that you can, you can look at increasingly as brand marketing. You can look at it increasingly as this is where your reach is. This is where your discovery is. This is where your influences and, and the B the market mix models that have been done that showed that cross channel influence, you know, show show that this, this bears out the challenge of course is, well, what percentage of the ad spend do you attribute to brand? And what percentage of it do you attribute to sales? You know, what, what, what, like, how do you actually calculate your ROAS return on ad spend in those situations? We've got OSHA from Revlon and Chris Perry and a couple others working on a research report right now, which is effectively ROI on ad on cross-channel ad spend. It's a model that companies what's that

Sri:

I was asking Peter, if he know those folks, you never heard of them OSHA and Chris Bay.

Rob:

I think they might've been on our podcast. I mean, look there, you got, you guys have great people here. And so, so what they were working on is a, a spreadsheet basically that has, you know, input your ad spend here. And we'll try to, we'll try to break down how you should value it. And of course, it's, it's a model like any other model that you probably need to tweak based on the category and things like that, but it's at least a first stab at trying to work out what multichannel attribution means in a world where the consumer journey is unpredictable in all over the place.

Sri:

So that, that said, right. So we talked a lot about awareness. We talked a lot about how this word e-commerce, which is really bottom of the funnel is starting to take on prominence as the entire funnel and how retail platforms, whether it's your own DTC, which is Google Shopify, things of that nature, as well as Amazon and the walmart.com are really awareness and storytelling vehicles for brands to kind of captivate and build lifelong relationships with the consumer, not a lot of doing it, but you gave a handful of examples. Let's jump into the world of trade. So media conversation with the consumer on a P and L is below the line and comes from a media mix, traditionally owned by CMO. We've kind of declared it early on. They show Amazon should be under a CMO, which we couldn't agree more. What happens to the selling aspects, which is above the line, AKA the trade to net

Sri:

Trade sales. How should a brand invest against all forms of trade in 2021, given what happened in 2020,

Rob:

Man? I it's a, it's such a hard question. I mean, there's I think brands generally speaking, there's a big trend where brands want to have a better handle on what the ROI and the trade spend is. So, you know, you go back 20 years and there's, you know, the co-op line items. There's a little bit of like a shrug. I got to know exactly where this money is going. They, you know, the retailers requiring it of me. I don't know, like you try, you, you, you try to negotiate as much discrete value in, in the, in the trade spend with the retailer as you can. But a lot of it's sort of a lot of it's, I don't know, a kind of wasted money. It's almost like a tax that the, that the, that the retailers imposing on you and what the overall trend in the, in the world is, is you're moving from really hard to measure advertising mediums, you know, like television co-op things like that to performance marketing, which have better ROI and at least measurable ROI associated with them.

Rob:

You know, search search engine marketing is the leading example of that, but there's, there's, there's a ton of others that you could look at for performance marketing. And I, I think in the COVID times, especially where a lot of people just aren't going, you know, foot traffic is way down. And a lot of the things that you would spend trade on are measurably less important because there's less foot, foot traffic. I think it's like a lot of things with COVID accelerates these types of conversations, retailers in the face of a absolutely giant advertising giant like Amazon advertising is becoming are, are under a lot of pressure to prove ROI and to, and to defend their, their their trade requests from brands and, and show data along those lines. Folks like Kroger are ahead of the game there with their 84 51 team.

Rob:

But, you know, I think the rest of them are going to have to follow suit. So in 2021 to the, to the extent that it's possible, I think brands are in a, in a better position than they ever have been to, to actually, you know, demand the models and demand, demand the data and, and try to try to build ROI studies with their, with their retail partners, because they can bring data from, from other retail partners that, that, that are providing that value. And, and I think that that's where the that's where the trade spend overall just has to go in the market.

Sri:

Terrific. Rob, I want to, I know you wear a bunch of different hats, including the one you're physically wearing right now, but let me turn to your other responsibility, which is at Salsify specifically, I'd like you to talk about the open experience Alliance. What's that all about what were the market conditions that necessitated Salsify to launch it and has it been successful? Yeah, so the 

Rob:

Fundamentally we, you know, we've all talked. What about the importance of the product detail pages and how pack shots are not the thing that is going to win when online it's not practice? The way that a lot of the, the, the systems have been built for the physical shelf is around pack shots. It starts with the planogramming systems, you know, groceries, groceries, we'll use JD Edwards, they'll use Nielsen, whatever to do their planigram re besides in order to do the planigram resets, they need planigram data. So they need the the, the app actual dimensions of the eaches of the cases they need the weights, they need the GS one planigram images, you know, the front shot front left, front, right top and so on and so forth. And so systems were built like companies like Gladson, which has, you know, I don't know, 50, 60 year old company we're built around the idea that you needed to create planet data for planigram systems to do planogramming.

Rob:

And that's a big part of how grocery operates in the nineties when circulars were really blowing up. I mean, that's where, that's where the huge explosion of circular spend really, really happened. The images that were available to use in circulars were also from these planograms systems. So the, the planigram images, the, you know, the front shot front left shot in particular, started to be used for circulars and other trade other trade programs that the retailer was was, was doing now. That means that the data pipelines that have been built that are just a little bit ossified go through these legacy planning, gram content providers, the glad sins item, masters, quickies, and so forth in the world that are really just doing, you know, brand pack shots, and then loading up the data in the groceries planet gram system. As we've talked about, that's totally insufficient for the digital shelf on the digital shelf.

Rob:

You need to have lifestyle images. Do you need to have words that sell the value of your brand and your product in the image gallery, you need to have three 60 spans. You need to have videos. You need to have user generated content. You need to have all that stuff. That's how you win. That's how you outperform competition. It's, it's how you drive conversion. It's how you drive search, search relevance. And, and so the, the, these old systems don't support it. I mean, they, they were rigid classic on-prem software systems designed 30 years ago that are just not, not designed for all of this volatile consumer facing content. So w what we wanted to do is we wanted to open up the data pipelines to the retailers to allow for additional experience content that's required to win online. Now, the way that the retailers work is let's say that you're setting up an item for Publix, are you setting up an item for Albertsons?

Rob:

They still require that you go through Gladson. So it's like a toll road to get your data on there. And then that data shows up on the.com. They're basically treating the.com like a circular, and in our view of the opening, and what we were trying to do with the open experience Alliance was get together tons of leading CPG companies, their Coca Cola's and L'Oreals and Tysons, and so forth to the world to lobby the major retailers to say, look, we have great e-commerce experience content. Just give us a way to express this, this, this old way of doing things where you're getting planogramming data, and you're putting it on the website is broken. We need a new way of doing things where you allow us as brand manufacturers to express our brands on your web properties, the same way we can on Amazon. Right. And, and I mean, as you guys, as you guys know, a lot of the, a lot of the grocery chains, especially in the U S are traditionally run, they're run by people that have been in the chain for 35 years, that don't really have a lot of digital experience, and they need this type of lobbying pressure in order to prioritize changes to the way that they do business, so that the OSA was designed to break these break.

Rob:

These traditional walled gardens down of planigram setups and open up the world to brand experiences on, on these.com sites. And it has been successful. I mean, this is you know, we, we've worked pretty closely with folks like the big ones, Walmart target, Amazon home Depot, others to build experience pipelines that allow for greater brand control of what shows up on those properties. And it's because of the lobbying efforts of this, this group of CPG leaders. So the, the OSA is still in full force. We're doing, doing a lot of work with dozens of the majors today. And anyone who's interested can go to open experience Alliance, just search forward on Google, and you'll you can sign up.

PVSB:

That's very helpful. Robin I'm, I'll be as decorous as I possibly can. In my commentary on this, you did mention the fact that there is a toll road associated with the legacy mechanisms of getting at that offers companies and opportunity to monetize access from brands to retailers. And it can, at times be excessive. We certainly are experiencing that at power reviews and retailers need to be more aware of making opportunities for brands to share content and collaborate as much as possible with them, particularly new and emerging brands. Like some of these mechanisms really ultimately deliver only big brands that can afford to pay to play with those retailers through these toll roads. And that is to the detriment of retailers, because it discourages D to C brands and new and emerging brand from being able to share content. So I appreciate you walking our audience through exactly what that was. Thank you.

Rob:

It's even, it's even worse than that, because I mean, you're the retailers, I don't think have understood that these exclusive toll roads pick their own pocket. They basically a brand manufacturer is taking money that they could spend in trade. Right. You know, cause it's fair and equitable treatment. The, the, the, the money that is spent on these toll roads is taken directly out of the retail team's budget. Okay.

PVSB:

They're not, they're not sharing that revenue back with the retailer. They literally are not only share they're taking all of the money from the brand and that is being sourced from the trade fund. So it is to their detriment that it could be used for other types of sales building activities.

Rob:

Yeah. I agree that this is brand brands brand should be able to work, to control their brand experiences, this to the best of everyone. And ultimately, you know, Jeff Bezos started Amazon to be the most customer centric company. The world has ever seen work from what the customer wants backwards and online. It's clear that customers want great experiences and, and any friction that you put in the play in the way of delivering a great experience is hurting the customer experience and is therefore hurting your business online. The competition's only a click away, and you've got to do everything that you possibly can to earn, to earn and continually re-earn the trust in the business and the loyalty of the modern digital shopper.

PVSB:

You couldn't, you couldn't have said it any better, Rob, that if you're a retailer and your competitor has more content that can help accelerate the path to purchase, then you do. And you've got a partner that is actively discouraging you from being able to source that content. I don't know how much longer is the retail I'd want them as my partner. So it is to their benefit. And that is the kind of conversation we're having with a lot of retailers over the last year and a half, since this kind of faced our part of the product page much as it has faced yours for quite a lot of time before that,

Sri:

After the decorous conversation between you both on retail in general, I feel I have the simplest question of this episode on the CPG guys today, which is very straightforward. Rob. I know that recently the digital shelf Institute released a retailer ad spend report. So we'd love for you to get into some of the inner workings such as when that was actually put together. How did y'all decide to do it? And what are some of the key insights that come out of this ad spend report in terms of what the what brands can learn?

Rob:

Yeah, the there's, there's there's a few different, we've been spending a lot of time on retail advertising spend. So we've got another one that's being launched next week, actually, as a, as a follow on that, that focuses more on these retail media groups that are proliferating now the, the previous one we, we got together with you, I sniff

Sri:

A retail media product coming from Salsify

Rob:

No, you know, it's, it's interesting. We I'll, I'll tell you it's that's in that space is incredibly interesting, is incredibly volatile in Boston where we're, Salsify's headquartered, there were a number of ad tech companies in the two thousands you had, you had Nanigans you had Localytics you had you know, there's, there's a bunch of them. And what they're the reason that the ad tech companies were good back in the two thousands was that there were a lot of competing digital properties, and there wasn't a clear winner. So you were syndicating advertising across a couple dozen advertising sites. It's much like in, in marketplaces and in the two thousands ChannelAdvisor was coming up and there were lots of these different marketplaces online, and none of them was particularly dominant. You know, you fast forward 10 years and online advertising in like 2015 is Google and Facebook, and that's it.

Rob:

And Google and Facebook had built their own ad stacks. And so basically any of these ad tech companies, they all, they all just hit a wall and most of them just don't even exist anymore. Similarly, you know, you look at, you look at what's happening with the, the, the retail media group advertising and every, every retail media group is launching an ad platform right now. And my view is that it's, you know, there there's, you, you, you faced a similar risk, right? You face a similar risk where you need a enough traffic on the retailer site to really support an auction model. And the 20th largest e-commerce retailer in the U S doesn't really have like a tremendous amount of traffic. Right? And, and so there's, there might be a really steep drop-off on on the, how these advertising systems work.

Rob:

And in the, in the meantime advertising programs that are more mature, like Amazon are so volatile that you really need a tremendous amount of human engagement. So you, you need managed services and folks like flywheel digital, which is now part of a central for example, or ideal clinic you know, do a tremendous job building strategy around Amazon advertising. And it's just hard to you can't really solve the problem with software, I guess, at the end of the day. And even if you could, the market risks, you know, consolidation. So for us, we pay very close attention to it. It's a key part of digital shelf execution strategy, but it's, it's one that it's one that from a soft, from a strictly software perspective, it's unclear what the solution would be

Sri:

When the, you used the word that I think is actually reasonably scary to the industry, especially commercial sales practitioners. And then to some extent, I would say leadership in marketing as well because traditional media buying the skillsets have really muscled around using an agency to do the buying and offline media. And while it's there still some sort of price, competition and media buying, there is no auction ecosystem. The world of online media buying is heavily CPC, CPM, and auction based system. We should you back soon on the show, would we hope you'll choose to come? So we can have a full debate on this topic, the world of media, how it's steadily and rapidly transforming to an auction based model and what that really means for brands, because it's scary because winning an auction is radically different than being the hippo in the room, writing a check for media buying.

Rob:

Aye, man, I would love to have that conversation. I mean, Mark, Mark Pritchard, the COO of Procter and gamble a couple of months ago said he's not signing upfront media contracts anymore. And I mean, this is we're we're, we're like we're on this precipice where we're going to just, we're going to go from locking in brand advertising, spend a year in advance with big upfronts to instead all of a sudden minute to minute auction strategy optimization,

Sri:

Not ready at scale for this. They still rely on agencies to do the Google ad sense marketing as well as to do the AMG marketing, to win in this sort of a new atmosphere that you're discussing. You have to be dynamic as heck and really know the art of long tail keywords. If you don't have big budgets and deep pockets and be on top of marketing, like 24 seven, this is no longer a game of buying large media on January 1st, like you said, but back to the,

Rob:

Yeah, so back to the report. So the one that most recently came out, we partnered with Ken shoe who does have software services for automating Amazon adspend and with Profitero which is a global leading digital shelf analytics company to try to try to figure out given, you know, the, the three companies and our different focuses and areas of reach and, and data data assets. Could we show links between experience management and advertising spend efficiency and, and here was the thesis. The thesis is basically really good on page experiences, inclusive of, you know, reviews, images optimized titles, things like that, you know, high product grades should increase conversion rate. And we know if you look on target, if you look on Amazon, you look at home Depot. We know that conversion rate on a PDP is part of the mix of metrics that go into search ranking.

Rob:

So all things being equal, a higher converting product will rank higher for search than a lower converting product. Right? And we also know that the the, the, the most mature auction based model for retail right now is Amazon. And we know that Amazon doesn't just give the ad spot to the highest bidder. They give the ad spot to the highest bidder that's likely to convert, right? So if you've got a crap product, you've just, you can't, you can't buy your way into the ads, into the ad spot. There's no amount of money you can spend. You could outbid by 10 times the second best price. The second product bid

Sri:

That drop single-handedly changes the game in advertising, because that says a lobby display, which is such a competitive ecosystem ecosystem terminology in the in-store world is no longer the boss, a lobby display,

Rob:

Man, you're, you're, you're exactly right. And, and it's, it's people don't understand that, like you can't negotiate with an algorithm, you know, it was like, it's math, you can't negotiate with math. And, and so the, the thesis that we went out to S to, to prove

Sri:

Talking to science before, the only problem was it didn't talk back to me

Rob:

Exactly. Is it it's, it's a poor dinner companion.

Sri:

I get to beaters, like what the heck is going on between these two advertising geeks?

PVSB:

Well, I just want to remind our audience that Rob was neither speaking French nor using profanity. When he said a crappy product in industry terms, crap stands for can't realize a profit. It's a term for items on Amazon that aren't profitable, just where we're a clean family podcast here,

Rob:

Clean family podcast. And so so we went out, we went out to, with this thesis, that if you, if you increased your product experience, keep a score on pages, then your advertising efficiency goes up, which means that all things being equal, you're paying less per click and less per conversion than you would if your experiences are worse. And this is huge because I mean, the whole discussion that we were having about earlier is like, does Amazon belong under the head of sales or the head of marketing? And with Amazon advertising becoming just this actual BMF, our view was, look, this, you should really treat this as marketing. And, and the thing that most marketers are not doing is they're not budgeting for creative. They're not budgeting for the images, the videos that below the fold content, all those engagement criteria that, that deliver a better experience and deliver conversion.

Rob:

And so what the report shows is that, yes, there's actually a pretty strong relationship between how good the experience is and how efficient the ad spend can be for product. Which means that if you're trying, if you've got a limited ad budget, which everybody does except, you know, maybe Procter and gamble at Amazon, but if you've got a limited ad budget and you want to make that money go as fast, as far as you can, the data shows, build an amazing product detail page first, and then that money will go further. You'll you'll, you just need to spend less to get the same amount of same amount of use and same amount of sales. And so it's, it's these types of insights that we're trying to understand about the relationships of experience and ad spend, and, and we're, we're going to do something similar in the new year with inventory as well. We think that there's a very, very strong correlation between inventory and stock management and performance on search ranking across a few, a few of the e-commerce sites. And we're going to start with, we started looking at that as well.

PVSB:

Well, this is terrific, Rob, we had Mike Black, your counterpart from Profitero on the podcast in 2020. I spoke to some of the initial thoughts around this. So we're very excited to see that research. I'll remind our audience that all of our content, our links to audio podcasts now on 20 platforms, including Pandora our YouTube channel, Adam roses, e-commerce glossary, all the content from our profitability series. It's all free. You can find it by just going to CPG guys.com. Also, if you have a virtual assistant, you're walking around the house, maybe cooking a meal, you want a little education and entertainment at the same time, you can always ask her or him. However you designate your, your virtual assistant to so simply play the CPG guys. And while you're at it, ask them to play on packing the digital shelf. Both are great. Great listens. Rob, thank you so much for joining this. The time just flew by on this. This was tremendous. We must have you back. Can you remind our audience exactly again, where they can learn more about the digital shelf Institute?

Rob:

Yeah. Go to a digital shelf institute.org search for unpacking the digital shelf on any podcast player. Find me on LinkedIn, Rob Gonzales, the bald guy, the second, second, most famous half Cuban bald guy in e-commerce that ended a happy to talk that

Sri:

Who's the first, most half Cuban famous guy in covers

Rob:

Jeff Bezos. Okay, there you go. There you go. I guess it's his adopted father. That's Cuban, but close enough.

PVSB:

And, and I'll, I'll close with you by thanking you for rebroadcasting this podcast on unpacking the digital shelf. I think it's great for us to cross pollinate our audiences. We're not in competition. We're trying to create conversations that are inclusive and that continue on whether they are in a future episodes of ours or future episodes of yours. So thank you so much for that

Rob:

Sri. This

PVSB:

Was another just horrific episode. I was chopped champion at the bit to get this recorded, and I know this is going to be pure gold, but thank you again for joining me on this

Sri:

Peter as always week over week. Thank you to all our audience. I want to say thank you for all the love you're showing us and for the organic growth. I want to remind you all. When you get a moment, if you have a chance, please do go to rate this podcast.com/cpg. Guys do give us a rating and reviews every now and then Peter Love to be told that we're good or bad, and we need to change the topics we're discussing and no better platform than to communicate with us with a rating and review drop. Thank you.

PVSB:

All right. And thanks to our audience for joining us. We look forward to you joining us on the next episodes of both the CPG guys, podcasts and unpacking the digital shelf. Thanks and have a great day.

Peter:

Thanks to Sri and Peter for hosting, Rob, you know, the best way for all of us to succeed at this thing called commerce is through banding together, sharing strategies, best practices in war stories. That's why the DSI is here. So as always, thanks for being part of our community.