Web Summit 2022 | Commerce Media: The Bedrock of the Next Digital Era| Brian Gleason Fireside Chat

So I figured we'd get right into it, Brian. I'd like to begin by talking about, accountability in the advertising business. It feels like, I don't know, this is my conspiracy theory, but over the past number of decades, millions, if not billions and billions of dollars has been spent with very little follow through in terms of actual customer purchases. Show more

Somebody spends millions of dollars on a Super Bowl ad and they hope that they sold more widgets the following quarter, and that's about all the accountability there is. But I believe Commerce Media is starting to change that. And I wanted to see how you feel like it can tackle that problem. Sure. So I agree with you. I spent 10 years of my career Show more

at an agency and I would say there is accountability and I think we're improving on it. And you've seen that, whether it was viewability of ads, media mix modeling, we got into last click attribution. I think we relied on that very heavily. But then what we've recently seen is this introduction of commerce media. And commerce media focuses predominantly on the transaction, and there's probably nothing more accountable than the transaction. And that works in a variety of ways. Meaning, okay, if I went to a website, Show more

you know, and purchased an ad, obviously I see the value of my media execution, but it was very difficult in the past to be able to see the transaction. With the introduction of retail media that allows the stores, because obviously they have loyalty data and they can tie closed loop measurement back, there's a level of accountability that hasn't been seen before, I don't think, in digital. And it's what's really driving this next wave of growth. I guess we should define commerce media. Sure. I work in journalism and when I told my colleagues I was hosting this panel, Show more

most of them assumed it was referring to affiliate links. You know, what Wirecutter does, what we do at Yahoo, which recommends, you know, Roombas you can buy or other products related Black Friday. But as I was doing more and more research for this panel, I realized it was much broader and I want to see if you can help define it for us. Show more

Sure. I honestly think, you know, if I look at Commerce media, there's two things that really bring it together. The first component of it is one that we've known for some time. When the internet came to fruition, it really was the ability for digital native companies to be able to build a storefront without a physical location. And I would think Commerce Media started to build around that aspect, which is really performance driven, which is how do I acquire new customers and how do I retain existing ones? And that continued on. On retail media that really started to build momentum. It started with Amazon, Show more

which has been in the game for 10, 15 years. Also internationally too. If you look at Ali and other amazing apps or retailers in Asia, they began to build it out. But in the US and in now Europe, we're seeing this massive growth that's tied to more retailers coming to the space. And what that really is, suddenly it invites the brand into this conversation. Because a brand now can advertise on a retailer site, and that could be an onsite sponsored ad, it could be an onsite display ad, it could be offsite. And suddenly you've seen this new category begin to take shape, which is really around shoppable moments in the point of discovery. And we've seen this, you know, begin to develop, but when you start to look at look at the numbers around it, they're massive. I mean, McKinsey and others have framed it at least a hundred billion in terms of the overall size. Group M and WPP came out a few weeks ago and they quoted the overall percentage of digital that is now allocated towards retail media is 19% and they expect it to go to 25%. So as a category, I think it's really the third wave, and I've said this a few times, but the third wave of digital. First we had search and Google owned that, and then we had social with Meta leading the charge there. And now I think commerce media is this next evolution or next area of growth for our business. So the upsides of this are pretty obvious to me because you're going directly to the point of sale Show more

and you can immediately sell the widget or what have you. Are there any downsides to this? The only downside I would say is it's complex and the speed in which we can go. We all like discovery, and I think about how I shop. If I go into a store, I'm comfortable if someone knows who I am and knows to direct me to the right area of the store because that's my discovery pattern. And then I don't necessarily need people messing with me when I'm in the store, Show more

you know, I'm shopping. Well in a digital environment, the same is true. Like how do we do discovery but not be too invasive, right? How do we use privacy and the legislation that's put in place, but still make it a personal experience to the point of acceptance? There's a benefit in retail media in the fact that we've given our loyalty data, we go to those stores, we're comfortable with them, and if I can make that consumer experience better, well then that's going to help me buy more. And again, I think if you look at how we buy now, we've seen a massive change in buying behavior since the pandemic where if you look at e-commerce sales, for example, e-commerce sales is now 25% of all retail sales. That's massive. And I think that's beginning to grow. So the only thing I would say is speed and not breaking the ecosystem. Like how do we get this done quickly without making it too complex, which is something we tend to do. What about for smaller brands? Like I was recently on Amazon, Show more

I was buying a new cat scratching post. And you know, it has three sponsored cat scratching posts. I'm going to assume you have a cat. Yes. I bought one of the sponsored ones. But theoretically a smaller brand could have the best scratching posts and you just would never see it because they don't have as big of an advertising budget, right? Yeah. I think for smaller brands, there's, and we've seen this as well. Show more

A smaller brand, suddenly you can enter the conversation. So a sponsored ad gives you, and there's organic search and inorganic search, so paid versus organic. For paid search, and we've done a lot of studies around this, it allows smaller brands the ability to compete, which typically they couldn't do. The nice thing about that is for a smaller brand, the ability to compete, suddenly I can rise up to the top of that list and I can be discovered. The same is true if I think about the consumer experience. If Amazon didn't give you, you know, if you went down, you weren't happy with your purchase, that would impact your view of Amazon. So I think most companies or most retailers have to put the consumer first, and you have to be incredibly diligent around the attention, the time that we put enhancing that customer experience and not just making a revenue driving vehicle because that would hurt everyone. Right. And what are the opportunities for publishers and commerce media? Show more

I work at Yahoo and obviously we're a big content publisher, but we're not as big of a site to actually go out and purchase things, but we have lots of advertising inventory. Yeah. What are the opportunities there? I think publishers, it's massive. So if you look at the ecosystem around commerce media in general, you have the brand, right? And the brand is looking to engage on a site. You have the retailer, which again, is easier once they set up their media business, that's a straight point of engagement. Where it becomes incredibly interesting for publishers is what we're seeing now is this idea of offsite. So the ability to take retailer data and extend to a publisher site, Show more

which for me is incredibly exciting. Because to do that, and you have to remember onsite closed loop attribution, I can see exactly in real time. So it's a four hour reporting loop that tells me exactly what was bought, how it was bought. When I go offsite, I want those same closed loop metrics. So for a publisher, if we're able to match the data in the appropriate way, whether it be through a clean room or other types of IDs, suddenly now I have a greater value for my audience for the time spent Show more

with it, which I think we greatly need in terms of the open marketplace. And that solves another problem as well. Like if you look at the overall time spent with the three big platforms versus money spent. I mentioned that, I mean, Google, Amazon, and Meta, which are great companies, but when I was in an agency, they received roughly 50 to 55% of the overall spend. And if I look at time spent, in no way does that equate. We know that the majority of searches for products start on the open internet. They start on publisher sites, whether it be Yahoo or others, to be able to explore and find new things to buy. So I think by connecting these ecosystems it's going to benefit publishers in the sense that you're going to get the proper value for the engagement that you deliver, which is exciting. So data collection is an incredibly important part of commerce media, Show more

but that data collection is getting harder and harder with increasing privacy concerns. Whenever I log onto the internet here in Portugal, it gives me eight, you know, questions. Are you sure you want the site to have your cookies? Yeah. Are you sure again? Yeah. United States is not quite like that. So how does the media industry, sorry, the advertising industry keep up with this trend towards increasing people's privacy? You know, I think, we're incredibly diligent around privacy as we all have to be. I think, Show more

you know, the first thing is a first part, retailers sit on first party data. So it's an opted environment where we've given our consent. And I think that's the important thing always to remember with these relationships. If we give consent and we're comfortable with it, then it enables the ecosystem to run. So, if I look at it in total, the ability to have first party data, which isn't reliant on the cookie, is incredibly valuable. And I think it's why you see so much increased attention to commerce media as a whole. Predominantly because when I go offsite, now I have an identifier from the retailer that's first party data, which again, isn't relied upon whether Google sticks with 2024, Show more

pushes to 2025 or any of those other. But it also brings a level of complexity that we need to solve. How do I match data? Is that in a clean room environment? How do the clean rooms work together? What's the actual identifier that I'm matching to? In what place does a hashed email have a place in that? I think the industry as a whole has to simplify that. When I referenced earlier that we can make it too complex, that's an area of it. So we have to come up and as an industry, push ourselves forward. And I don't think it's on one company to build the identifier, it's more the ecosystem. So what's next for commerce media? What are the trend lines in the industry? Show more

That's a cool space to be in. I mean, you know, for me, I've spent, again, 10 years as a publisher, 10 years on the agency side, and 10 years here. Well, I'm starting this journey here in Ad Tech. I think the coolest thing that you're going to see is you're going to see commerce media extend in three ways. I think the first way we see it extend is you're going to see more unique experiences in the retail environment. So on the website. And that could be in-stream videos that we're seeing that help us educate us on something. So for example, if you're going on a camping trip, how cool would it be to have a video showing you how to set up the tent, how to use the grill, how to actually, what to bring, how to pack a backpack. That would be relevant material. And in that, I think you can get things out of that. The same is true for cooking, right? If I'm thinking about putting a recipe together, what if you, and they have this now, but imagine if you went to a recipe site, it had a link back with everything and knew the brands that I prefer, and automatically I could hit a link, it goes to the retailer, and those items are delivered to me. That would increase the customer experience and brand loyalty. And then the final one, and you know, I think we're going to get into taking the shop from the retail environment Show more

and pushing it out onto the open web. And I think what that means is we don't, we live in a see, click, buy world, right? And a lot of that came from Instagram and the work that they did, which is, it was so easy to see it click it, and Amazon's done this as well. I think we want to be able to take those same features that we're comfortable with, but extend them out in the appropriate way. So if we're in one of those how-to videos, if we're in a recipe or a cooking site, suddenly I can have this new experience. Or linking in-store activity as well is another one. You know, if you think about commerce media, it's existed in a physical store. You know, that was the end cap that you've seen or the points of, you know, whether it's digital billboards, outside. Connecting all of those things in a way that benefits the consumer is where I think we're going to see us extend. Of course, you know, every consumer only has a finite amount of money if their entire existence is Show more

shoppable moments. I mean, is there going to be a cap in terms of how much juicy can squeeze out of that orange? No, I mean, again, what you're really doing is we're traveling as the consumer travels. So it's not as if, you know, we've gone from a physical world to a digital world with eCommerce sales, and all we're doing now is trying to open up points of discovery in that digital environment that enhance the customer experience and do it in a way to learn from our past. If we all think back to the early days of digital with the ads that simply followed you anywhere you went, that weren't relevant to you, nobody wants to go back to that. Or when we had those massive takeovers of a page that you couldn't click out of, well, that you can't do. So I think we want to learn from our past, but we want to enhance the customer journey and experience and enable it. So I think that's the path in terms of what we're building. And, how has the role of CMO changed over the course of your career here? Show more

CMOs dramatically changed. So if you think about a brand, we're starting to see the convergence coming together. I'll use a few examples. If you're familiar with Best Buy, which is a large electronic store in the U.S., they now have the individual overseeing two sides of the business. Show more

So if you think about a typical activity, you've got monetization, which is a revenue driver, setting up a retail media business, which is a revenue driver, which requires everything you would think: billing, sales teams, marketing. And then you have an activation side, which is buying on behalf to be able to bring more customers back to your store. And then there were trade dollars, which was separate from that. And now what we're starting to see is these worlds begin to come together where Show more

one individual, in many cases is responsible for all of it. And that's a different change, right? Because one's a revenue driver, one, you are growth for the organization. So trying to navigate that. But we're seeing that both on the retailer side. I also see it on the large consumer CPG brands as well, where it used to be siloed in terms of different areas of budget, again, trade and brand. And now that we have these new closed loop measurement tactics that can extend to upper funnel activity, meaning branding activity, I think you're going to see more and more dollars begin to flow around that. The output of that is, it's also changed the buying community, so ad agencies. Where ad agencies are faced with this challenge now of an efficiency problem, right? So suddenly if you look at numbers from last year, I think the average agency bought four retail media networks. This year they'll buy eight. And the way that that was bought in the past, Show more

there were different tactics. Search may have been as a team. I may have had a commerce team that sat within a vertical. Suddenly those things are coming together. And that's much of the work that Criteo is trying to build, is to bring efficiency to a fragmented market, ecosystem. We're trying to educate with it as well. Because again, as it emerges and as it grows, I think we need to level it out. I see our clock thing has just turned yellow, so I think I'd like to bring it back to the accountability question that I began Show more

with. In the digital space, you're accountable down to the last penny a lot of times for your advertising campaigns. Is that exciting? Is it scary? Because if an advertiser spends $75,000 and they only sell $74,000 worth of profit, from the advertising campaign, it's worth it for them to perhaps stop the campaign, right? So I mean, Criteo is probably mostly in the digital space. It, is. No, yeah. I mean, accountability is the world in which we live. So our ambition is to be the fourth ad stack where you would have Google for search, Meta for social, Amazon for commerce within the walls and Criteo for commerce beyond the walls. But since we founded the company back in 2005, we've lived on accountability. Because every dollar spent, we go to day-to-day contracts on our performance, Show more

which is, it's tied to a return on ad spend. And that ad spend is not tied to a click or a completed view. It's tied to the transaction on the page. So we see a trillion dollars of transactions. And I think, you know, when you live in that world, it could be incredibly rewarding in the sense that our engineering team, who we've got, we're fortunate, we have 800 engineers in our team. The excitement that they get when they solve a problem or when they build something or the AI team comes up with a new algo that can help the discovery process is immense because immediately you can tie it to an outcome, immediately you can see the lift. And the same is true as that moves to retail environments now, which is if you live in an outcome-driven world, the accountability is with you every day. And I think that's something we need more and more of, because the reality is you can't fake a transaction, right? Somebody spent the money on it. All right. And our final minute here, do you have any predictions for the advertising industry next year and year after that? Show more

I think this year's going to be interesting. I know the macroeconomics are choppy right now, and I think we're trying to see what happens and where it goes. I think we saw that last week with the report, you know, some of the larger reporting from the big ad tech companies. But what I would say is I think moving forward, it's going to be sustainable. I think we're going to see significant growth around commerce in general, and I think that category will persist. I think we're going to see it move into different avenues. I'm anxious about what's going on with connected TV as that expands in different markets, which is exciting. Netflix coming out with their ad, but there can't be, again, that's a fragmented ecosystem. So I think you'll see significant growth, fragmented, and then a few key players emerge. Amazing. Thank you so much. Show more