Ask the Expert: Commerce media in digital advertising with PubMatic

Hi, and welcome to the next episode of Ask the Expert, where today I’m going to be talking to Babs Kehinde from PubMatic about the rise in commerce media.

Hi, Babs.

Thank you very much, Debbie, and lovely to be here.

Can we start off with some really basic questions?

Can you just tell me a little bit about your role at PubMatic?

I currently run the Commerce Media Practice for PubMatic in EMEA.

So that essentially involves working with our commerce media partners and buyers and trying to connect both ends of that spectrum and make sure that we’re delivering value in the middle as a partner.

My role at PubMatic has really grown in the four and a half years since I’ve been there, and I’ve focused on commerce for the last, I’d say probably about 18 months now, really supporting the growth of our commerce media proposition, and that’s been with the launch of our Convert platform, which is our technology solution for commerce businesses looking to embark on their own retail media strategy.

Fantastic.

In terms of retail media as it started off, commerce media, can you give me a definition that you tend to work?

Yes.

We settled at PubMatic on a particular definition, and it’s really around any business that has the ability to capture a financial transaction online and make those audiences available for targeting, because we feel that really encompasses the value and really the benefits that this part of the industry is bringing to digital marketing.

And it also means that we encompass all of the traditional retailers and retail organisations that would form part of retail media, but the broader definition of commerce media means that we can start introducing more companies like an Expedia, who aren’t necessarily a traditional retailer, but they also obviously sell products, whether it be that flights or hotels, etc.

So we think that broadly sits as a definition that encapsulates what the opportunity is for marketers.

Okay, useful, and does that cover both on their own site, on their own inventory, and then also off site as well?

It does, again, that core functionality, the ability to capture that transaction and make those audiences available, that can be both for onsite marketing, whether it’s through their onsite targeting and onsite usability for marketers, but also, and increasingly, where we see a lot of growth coming from is the audience extension and offsite capabilities.

So that ability for us to support those businesses as they expand their audiences off their own individual platforms, giving them greater ability to scale, giving marketeers a greater ability to reach those audiences in different environments.

And in terms of the types of organisations, where do you see that shifting now?

It’s been fascinating because the range of companies that are now moving into this space and seeing how they can also start to add their own both the wealth of the data that they have, but also their own strategy and convert it to a commerce proposition.

So essentially, as we’ve already identified, you do have the traditional retailers.

They’re always, I think, going to be, just because of their nature and their heritage, they’re always going to be traditionally the first thought of when you think of retail media, but as we broaden it out and we look at commerce, then, yes, there’s a whole raft of different businesses.

So you have the likes of an Uber or a Deliveroo also forming part of that whole commerce media ecosystem.

Similarly, a TripAdvisor or an Expedia or even someone like a Live Nation, which I think are a great example of a commerce media proposition in so much as the amount of insight that they can provide based on actual user purchases and user habits, and how that can influence the way people message and target those audiences.

It really starts to present a compelling offering to buyers and advertisers.

I think you’re right.

So, Babs, in terms of the newer organisations that are looking to enter the commerce media market, what types of challenges do you see that they’re coming up against?

A great question, because ultimately, we want to be positioned to support these businesses, overcome these challenges and really help them realise the opportunity that commerce media presents.

I think one way of encapsulating the challenge is really around the concept of inertia.

A lot of these businesses, because this isn’t their core business, it’s not traditional to them, they’re not publishers, they are not traditional advertising companies, so all of this is new.

So I think they face a raft of challenges that really sit both internally and externally.

When we look at some of those internal challenges, it’s everything around their own particular infrastructure, both in terms of their people and organisation, having relevant stakeholders who are really going to drive and champion the drive towards retail media and commerce media.

Additionally, their data infrastructure just generally around how they can connect all the various disparate pieces of data that they may have on those users, connect all of that together and present a unified view that’s really compelling and interesting to buyers to try and target.

And also, when you’re looking at their organisational infrastructure, just the way that these particular companies look at who is relevant within the organisation to focus on commerce media.

Who’s going to be both pulled away from their day to day, or are they going to look to scale up a whole different side of their business?

So all of these different challenges are things that these businesses are grappling with.

They’re trying to come to terms with just around their own internal processes and internal structure.

And then when you look externally, I think just because of the nature of commerce media and the way that it is still relatively new.

I say this knowing that traditional trade and shopper marketing that’s been in this space has been running for many years, but in these new developing areas, this is still relatively new, especially on the buy side.

The way that buyers can currently look at commerce media and almost default to the way that we’ve traditionally bought digital media in the past, it’s definitely something that I think as an industry, we’ve got to be really mindful of.

That lack of standardisation across the market, the fragmentation that currently exists within commerce media and retail media networks, it is going to mean that…

There’s going to be an element of as an industry, all of us pulling together to make sure that we can prove the value that retail media brings and really attract the dollars that effectively are looking to be deployed in this space, but realistically need to be deployed effectively.

That’s around building that understanding, having that collaboration across different businesses to make sure that we’re all pulling in the same direction.

Yeah, you make some really good points there, just one in terms of that organisational challenge.

It is something totally new for many of these types of organisations, so actually thinking about that, making sure that they are geared up for success within this area, a really strong point.

And then I think on the other side around that fragmentation in terms of everybody’s got different types of data floating around at this moment, how actually, if you think about it from the buy side, do we make it easier for people to buy against this, because every single different commerce media play is going to be slightly different in terms of the types of audiences?

The bit that I’d expand on from your question there is really around making it easy.

The one thing we don’t want to do is introduce more complexity, introduce more challenges for buyers to do what they’re trying to do.

They want to reach audiences, they want to help their brands deliver targeted messages to relevant people.

The core concept of marketing, right message, right person, right time.

The power of retail media does offer that, because it’s trading off real actionable insights, off actionable commercial insights that users are generating with those retailers with those commerce businesses.

It’s incumbent on us as an industry to make this as easy as possible, try and reduce those barriers to helping buyers understand what they’re buying against, understand who they’re targeting, understand the incrementality of the spend that they’re driving into commerce media, and really giving them that confidence to reinvest and grow the spend that everyone’s talking about and everyone’s chasing in this marketplace.

Yeah. I couldn’t agree more from that side.

Can you give me a bit more background in terms of the types of challenges that commerce players will face into around the data and complexities in terms of how they need to onboard data?

Yeah.

This is where our partnership has been really valuable, I think, both from a PubMatic standpoint, working with someone with such a rich heritage and data, and working to almost give our partners a route to helping us onboard that data, helping us be able to ingest it in a readable and usable fashion for the buyers that we work with.

And I think it is really around retailers and commerce businesses having all of these various insights to their customers, be that their loyalty card data, or it could be in store offline activity, or it’s just the general first-party data that they hold against those users.

Being able to combine it all into one single 360 view of that user, of that audience, it’s really through working with valuable partners that can help them understand the data that they hold.

It’s amazing how where we’ve seen and what some of the challenges that we’ve seen within some of these businesses is, the data sits in individual silos that don’t necessarily interact so they need that additional support.

They need that layer of intelligence to help them extract the value from that data and then allow it to be commercialised.

So there is a little bit of work that we will always advise new partners and new players in this space.

There’s some homework that they have to do on their side.

There’s just getting their own internal structures in place, which then, and that is, by definition, in a lot of cases, through partnerships with experts in that space, like in Experian.

And that’s where we can then come in, because with that first step done, it then allows us to be that much more effective in how we can support them in all of that growth opportunity that we can then bring to bear as PubMatic.

Yeah, and if we think about some of the areas that we’re working together at this moment in time, very much where organisations might have a lot offline insight that they want to bring on board to be able to play into that digital ecosystem, from that side, not putting that to one side, actually thinking you can do something with that offline data.

We can help to onboard at scale to then feed into a platform like PubMatic to be able to buy against.

I think that’s a key area that we’re talking to commerce players around at this moment in time.

And then again, in terms of the ways that we can help extend those audiences who we were talking about buyers previously, then they need the scale to make things efficient.

So taking first party audiences from a commerce player and then pushing those and extending those audiences out into market, I think is a really strong play for some of the organisations that we’re working on together.

Even outside of some of the largest players, they need no mentioning, but some of the largest players in the space.

I think there’s a commonality with a lot of commerce businesses and retailers in that the scale that they have within their own personal digital ecosystems is relatively limited.

Even some of the larger traditional bricks and mortar retailers that we know and we will all engage with as consumers, they don’t actually have the biggest digital footprint.

So that ability to take that incredibly valuable asset, this first party data, being able to combine it with all of the touch points that they have against that user and work with partners to help them extend that and allow buyers to scale the reach of that audience across a wide swathe of different digital touch points, I think that’s where you really start to see the power of retail media, the power of digital media come into its own.

Yeah, and I think it’s around then allowing buyers to understand different elements that maybe they’d buy against elsewhere within the ecosystem, within that commerce media buy as well.

I definitely see value in that in terms of the agencies that we’re talking about around commerce media buy as well.

If we think around measurement, then how advanced is that within the retail commerce media play at the moment, or how do you see it developing?

There is definitely…

The insight is available, that internal view of how a user has interacted with marketing messaging, what that has ultimately gone on and driven?

Has it driven increased brand loyalty?

Has it driven increased sales to that particular brand?

Has it driven offline purchases to that particular brand?

All of that data is there.

Now the challenge and the ability to realise and pull those insights out, that’s where I think there is still some development work across the industry that we could get to because we know the data is there.

It then is around being able to build it in an actionable way that all buyers can get benefit from.
And that will give them, as I mentioned earlier, that will give them the confidence that a dollar spent here is going to generate X in growth or X in sales return or just increase ROAS from that marketing activity because they can actually see the data and they can see how their marketing has been impacted all the way through the line.

That’s it, and I think it is with anything new, then it’s around testing, isn’t it?

It’s around really understanding what’s working for you, what’s not working for you from that side.

So, yeah, anything in terms of that broader return on investment calculation is going to be key to buyers.

Yeah.

That testing methodology is so key, because again, a lot of this is so new.

The approach from different organisations, different retail media outfits is different in its own.

Those nuances are going to be different across different businesses.

The ability to test and continue to refine the activity, continue to refine the audiences that they’re messaging or refine the way that they’re targeting these audiences, that’s really going to help drive those incremental benefits that they can see as they repeat campaigns over and over again.

We will always advise on a continuous testing plan that buyers are always looking to so they can continually eke out benefits with every repeat campaign.

Yeah. Brilliant.

What are the benefits for the consumer in terms of retail media?

So I think the real benefit to us as consumers is really around value, and it’s the value exchange for you having access to my data.

I want that value back.

I want that relevance back from the messaging that I’m receiving.

I want an improved user experience.

I don’t want to feel that I’m losing out in that value exchange, being that I’m now just a commodity as part of your overall business strategy, that I’m just one commodity that’s been utilised for you to make money off.

There has to be that fair trade as a consumer that for the benefit of utilising my data, my overall engagement to this particular retailer, to this brand, will be that much more improved.

My overall experience as I travel through the site will be much more relevant.

The messaging that I will receive will be much more relevant and targeted to me, and that will give me, as a user, confidence that I can spend more time and ultimately money with this brand, with these advertisers who are messaging me.

I think so, and I think people are so much savvier than they used to be in terms of that value exchange, and they are giving information away, but they want something back in return.

So people’s expectations are so much higher than they used to be.

So an industry that can deliver on that, I think, is key.

I’m sure there’s many organisations out there considering this commerce media play at this moment in time.

For those who are thinking about it, have you got any key pointers that you give them in terms of what they should be considering?

Yes, again, a great question, because there are so many businesses who are really at the start of this journey.

They are starting to consider, they see the opportunity that this market can bring.

They see the figures, what is it, 220 billion forecast to be spent across retail media within the next three years?

And everyone wants a piece of that pie, quite rightly.

In terms of advice, the way we think about it, and we try and boil it down to three key areas, or the three C’s, if you will.

And that starts with collaboration, complexity and competition.

And when we talk about collaboration, that’s this, these partnerships, seeking out partners who can help you with everything from understanding the data that you have, understanding how best to commercialise it, understanding how best to work within a privacy, safe and regulatory framework that gives you that confidence that you are working in the most efficient way with that data.

Partnerships that will help you both in terms of your organisational setup, so whether they need to outsource some of their commercial activities to partners externally.

That collaboration is key, really finding partners that can help support you realise your commerce media ambitions.

In terms of the complexity, we’ve talked on a couple of these areas again.

The internal complexities, the market complexities, really trying to break down those internal silos that they have so that they can look at how best to build a business that is both easy for buyers to interact with, but also gives them the greatest opportunity to access new revenue that will really drive their growth in this retail media space.

And then the competition element is really, I think we’re likely to see many more retail media networks before we start to see some level of consolidation.

I think lots of businesses are incredibly interested in this as an area, and I think being mindful of that from a retailer perspective or a commerce business perspective, and what that means to buyers, that competition of understanding how they can stand out.

What is it that’s unique that they’re bringing to the marketplace?

Is it their unique audience?

That niche audience for some of these retailers is really going to be key to buyers.

Is it a unique proposition in terms of how those businesses are going to access and engage with them commercially?

Those are things that they’ve really got to be mindful of and working out how best to differentiate themselves from the competition.

And those are just starters, really.

It’s such a broad topic that commerce businesses are really grappling with, that we make ourselves available and we sit there and really try and help them understand or understand where we can start to interact in some of those areas.

And it’s bringing partnerships like this Experian partnership to them to take a lot of that heavy lifting away and say, “Look, they’re areas that we can really support you with.”

They’re things that are going to be inherent to those businesses.

They’re going to have to manage and solve as a starting point before they can really get to grips with the overall challenges for commerce media.

It’s a combination of these different areas that I think working with partners like Experian and ourselves at PubMatic can help and support these businesses as they try and realise their true ambitions within commerce media.

Amazing. Thanks very much, Babs, for joining me today. I really enjoyed the conversation.

Thank you very much, Debbie, and I enjoyed being here with you.