Expert Connect: Traditional Performance Media vs. Amazon/Retail Media

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In this episode of Intentwise Expert Connect, I spoke with Diana Gordon, SVP, client services at 3Q Digital, about traditional performance media versus Amazon/retail media. Watch or read the interview below.

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Alan Osetek: The topic of the day, and I’m sure we’ll cover a few things, is similarities and differences between what we’ll call traditional performance digital media, things like search, social, and programmatic, and the new Amazon retail media environment. So, Diana, let’s jump right in. Well, first and foremost, tell us a little bit about yourself, your background, and how you arrived at 3Q Digital.

Diana Gordon: Sure, sure. Thanks for asking. So I’m almost a 20-year vet of the performance media and marketing space. I got my feet wet and cut my teeth many years ago at a performance agency just west of Boston. And they eventually ended up actually getting acquired by Verizon Information Systems—so the yellow pages of the Verizon ecosystem. From there, I did stints at a number of search performance agencies—iProspect, iCrossing. And then before joining 3Q Digital, I spent eight years at WPP’s Mindshare, where I wore two hats in the time there. First, leading their search and social practice for a Midwest roster of brands, before making a switch over to the Shop+ program and group at Mindshare, which was a global differentiator focused on shopper and retail media. And now I’ve been at 3Q coming up on a year here where I lead, as you said, ecommerce and marketplace best practices.

AO: Excellent. Well, tell me a little bit about how did you make the journey from kind of the old world of search and social into retail and performance?

DG: Yeah, sure. It actually happened by chance a little bit. So I had been at WPP’s Mindshare for a couple of years, leading search and social, and was looking for just a change, something, change of scenery, some different things, when I was approached with the opportunity to join the Shop+ group, and so I sort of made the assumption that Shop+ was going to be performance marketing and something that I knew a lot about and it was going to be old hat for me. It wasn’t until I was actually in role that I started to learn about this new to me form of marketing—shopper marketing—and learning all about how FMCG brands really did business with their retail partners. And it just so happened that in that role, really the timing was fortuitous because in the same year that I took the position, Amazon announced to TheStreet that they had raised $2 billion in ad revenue that first year, and then in very short succession, you saw Walmart launch their Walmart Connect offering, Kroger offer their Kroger Precision Marketing, Target Media rebranded as Roundel. And it’s all kind of grown from there.

AO: All right. So let’s dig right into it. So, you come into this new role of retail, ecommerce. You had this history in digital performance marketing. So tell me a little bit about as you’re making the journey into kind of the new area within digital: What are the things that you took with you, the skill sets you took with you? And then as you moved into retail, what are some of the nuances that you had to either relearn or learn?

DG: I think the single biggest nuance that anyone making that transition from sort of traditional performance media to retail media is understanding the complex dynamic and relationship that exists between a brand and their customer. In this new retail media environment, a brand’s customer, their retail partners, are also their media sellers. And so, it’s a strange dynamic where you’re working with a brand and they’re used to, quote-unquote, “letting the retailer call the shots.” And now as they’re trying to sell you media, you’re also trying to have an unbiased and objective reaction to what they’re selling you, how the performance is, and how those investments that you’re making are ultimately in your best interest as the brand champion. And so I think the skills that a performance marketer can take with them, if they’re making that shift from SEM (search engine marketing) over to retail media is the things that have made you successful in the past. Having a keen analytical mind and the ability to interrogate data and look for trends, look for performance indicators. I think an ability to think beyond the data that is in front of you. What are the different compelling pieces of how a product gets into a shopper’s cart, and then ultimately that transaction is completed? What can’t you see in the current data that also could be affecting your performance? And then I think lastly, the ability to sort of read the tea leaves a little bit. And in the conversation between the retail media partner and the client brand, are you sort of able to pick up on some of those more nuanced goals and objectives that the retailer has for that brand in their store? And how are you helping to create mutual opportunities for both the brand and the retailer to succeed in this particular marketing initiative?

“In this new retail media environment, a brand’s customer, their retail partners, are also their media sellers.”

—Diana Gordon, 3Q Digital

AO: Excellent. What about in the world of search and social as an example, so you had SEM and SEO, and while they were semi-intertwined in the worlds of Google, as an example, there was some separation. Whereas in Amazon, they are so much more closely aligned. Can you talk a little bit about that?

DG: Yeah, I can. I mean, I think the biggest difference, first and foremost, is that Google has always said SEM are paid search ads, and SEO or organic ranking are not integrated. One does not impact the other. Whereas Amazon is actually saying the total opposite, they’ve been very vocal that organic health is impacted by investment in paid search ads, and paid search media within Amazon will in fact sort of spur the flywheel. And that’s what Amazon talks about, their A9 engine that sort of gets everything going. And so more paid media means more clicks to the landing page. More clicks of the landing page means more sales of the product. More sales of the product means that an Amazon shopper is having a positive experience with that product, and therefore Amazon is awarding that brand and that product with higher organic ranking in their organic listings.

AO: Cool. Jumping around a little bit. How about in terms of as you’re looking to make hires to your team, what are the types of skill sets you look for? How are they different from, you know, other digital channels that you’ve hired for in the past?

DG: When I’m looking to bring somebody onto the team, the single biggest thing that I’m looking for is someone with potential, right? The skills that got you where you are today are not always going to be the skills that are going to get you where you want to go tomorrow. And so it’s great to have people who have a pedigree in paid search marketing or a pedigree in programmatic media. But we also want people who are excited about new challenges and new things. And retail media is still relatively nascent. These platforms are not as sophisticated as some of the platforms that a traditional performance marketer may be accustomed to working in. Amazon’s paid search UI, for example, does not have all the bells and whistles that a Google AdWords does, and so working with that partner to help develop capability and sort of hack the system to get the same functionality that you’re accustomed to is necessary. And the other thing I would say to that is these retail media environments are not singular media channels. It’s not just paid search. It’s not just programmatic. We like to think about it as an ecosystem. And so you want to have someone who is excited about the prospect of deploying that entire ecosystem, whether it is paid search ads, plus programmatic display media, plus a sponsorship opportunity or a next-generation idea, like an Amazon Fire ad unit or some audio campaigns. How all of those things come together in totality to create a really comprehensive and holistic marketing program.

AO: Excellent. And how about when you are working within 3Q Digital across multiple practice areas on behalf of a client? How do the practice areas intertwine between search, social, programmatic, and retail?

DG: It’s a little bit of what I just talked about, which is we are taking this platform-centric approach. And so 3Q Digital is structured with our subject-matter experts by media channel. We have our SEM experts, who handle all our paid search and search-engine marketing tactics. We have a programmatic display expert. We have a team that is dedicated and focused on emerging media and a team that is dedicated and focused on sort of marketplaces and sellers’ environments. And they all come together under our lead client advocates, our client services teams, to deliver holistic solutions to our clients and brands, regardless of where the brand wants to transact or has the opportunity to transact. And one of the keystones of that is making sure that we have a measurement or decision-sciences team that sits atop all of this that can help us connect the data, reach those insights, and then action for future and potential growth.

AO: You mentioned marketplaces. So in terms of trends you’re seeing in 2022, obviously one of the trends that we’re seeing is the emergence of a number of new marketplaces. Talk about, how you and 3Q Digital thinks about some of these newer marketplaces and what you foresee as trends in 2022.

DG: From a marketplaces perspective, I think what we’ve really seen is the ramp up for the large national big-box retailers. So today Amazon is not the only marketplace game in town. Walmart has a thriving marketplace. Target has a thriving marketplace. Kroger is beginning to offer marketplace offerings and is starting to, on a limited basis, bring non-endemic brands into their program. But you’re also starting to see reemergence of some of the old realm as well. So eBay, as an example, just released last year, a new paid sponsored search product and offering. You’re starting to see Mercado, you’re starting to see Capital One Shopping. All kinds of different marketplaces come up with different types of offerings. And I’m talking marketplaces purely from sort of the products perspective, but you think about the marketplace economy, there’s also in the housing and the real estate space, in the services and the services and the subscription model. So marketplaces are here to stay. I think the key trend is going to be about helping brands find the right connection for their brand, what is appropriate for their brand, where is their target consumer, and then making sure that the brand has the appropriate infrastructure on the back end to facilitate distribution through that marketplace and make sure that consumers have a really positive experience with their product and their services.

AO: Excellent. Any other trends that you’re thinking about in 2022?

DG: At 3Q, we’re thinking about lots of trends, but I think specific to the retail media in the ecommerce space specifically, I think the biggest one that we’re watching and we’re advising clients on is the convergence of omni. And so, you know, 2020 and 2021 ushered in this prolific year of ecommerce and everything is facilitated and enabled by digital. But we have to understand that still a lot of these brands, their years are made by their brick-and-mortar sales or what they do offline as well. And so we’re really helping our brands to merge that divide of online to offline and really sort of changing the conversation from ecommerce and brick and mortar to one that is just omni-commerce.

AO: Excellent. Switching topics a bit, how about on the brand side? What are you seeing in terms of the evolution of the brands’ marketing departments, in terms of how they organize to work both internally within the brand as well as how they work with 3Q as an agency?

DG: That’s a really good question. And I would say that this is probably one of the biggest nuts to crack in unlocking retail media’s potential. You know, retail media really sort of came of age working with consumer packaged-good brands. And so many of those brands are 100-year-old organizations. And so they’re organized to do business in a certain way that has worked for them for many, many years. And what we’re seeing today is that the line of demarcation between your marketing team, your digital center of excellence team, and even your sales and shopper team is starting to blur. And so these teams are having to come together more now than ever and help create holistic solutions regardless of channel, regardless of platform. So the brands that are being successful in this are the brands that are recognizing that operational and organizational silos need to come down. And so they’re collaborating in more ways than they ever have and in some cases, that means that there is a relinquish of responsibility or relinquish of control for things that might have historically been solely in your camp to bring partners to the table and have conversations about how does it impact everybody’s department in a more comprehensive way.

AO: Excellent. Last question, and I’ll just leave this one kind of open-ended. Anything else you’re thinking about, with the laundry list of opportunities in 2022 in retail and ecommerce? I know you mentioned different categories or verticals that are emerging in this channel. What other things are you thinking about in terms of 2022 and in how we’re going to tackle this kind of massive emerging new channel?

DG: Yeah, there are a couple of different things that I think about on the regular basis with respect to retail media. I think the first thing is category adoption beyond the core. So as I mentioned, it sort of got its lightning movement working with CPG brands that were already transacting at retail and that made a lot of sense. But what I’m really curious and excited to see is how does it cascade to other verticals? So specifically, you think about verticals that are in the hard line or the soft line categories. You have apparel, you have fashion, you have footwear in the soft lines. Or in hard lines, you’ve got consumer electronics or large appliances. So all of those categories are also prime for taking advantage of the massive amounts of traffic that these retailers have. And so that in and of itself should also usher in a new cohort of retailers adopting or rolling out retail-media networks themselves. I think that’s the first thing.

I think the second thing is sort of how is the retail-media trend going to transcend retail itself, and what other categories are going to look to monetize their site traffic for ads and media? So think of properties like the banks, right? Your financial institutions who you’re going to to check your checking account or your transactions or to complete a bill. Now there’s an opportunity for your brands to transact there and get in front of eyeballs as well.

And then I think the third thing that is coming online and is curious, right, is how does this new world of marketplaces, which really sort of democratizes the buying and selling of goods, what are the systems and the services in place to make sure that that all remains on the up and up? I had the opportunity to sit in a webinar earlier this week specifically on marketplace fraud and what systems and third-party partners are there to help a retailer who is building a marketplace control the environment so that there isn’t any bad actors getting in, either from the buying perspective or from the selling perspective. And it can maintain its integrity and its positive experience for shoppers.

This interview has been edited for clarity and length.

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