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

Sure. So I agree with you. I spent 10 years of my career 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 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.

Sure. I honestly think, if I look at commerce media, there's two things that really bring it together. The first component 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 build a storefront without a physical location. And I would think commerce media started to build around that aspect, which is really performance driven: how do I acquire new customers and how do I retain existing ones? And that continued on. Retail media really started to build momentum. It started with Amazon, which has been in the game for 10, 15 years. Also internationally, if you look at Ali and other amazing apps or retailers in Asia, they began to build it out. But in the US and now Europe, we're seeing massive growth 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 around shoppable moments at the point of discovery. And when you start to look at the numbers, they're massive. McKinsey and others have framed it at least a hundred billion in terms of 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 of digital. First we had search and Google owned that, and then we had social with Meta leading the charge. And now I think commerce media is this next evolution or next area of growth for our business.

The only downside I would say is it's complex and the speed at 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 directs me to the right area because that's my discovery pattern. And then I don't necessarily need people messing with me when I'm shopping. In a digital environment, the same is true. How do we do discovery but not be too invasive? How do we use privacy and the legislation that's in place but still make it a personal experience to the point of acceptance? There's a benefit in retail media in 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, it will help me buy more. And if you look at how we buy now, we've seen a massive change in buying behavior since the pandemic. E-commerce sales are now 25% of all retail sales. That's massive, and it's beginning to grow. So the only thing I would say is speed and not breaking the ecosystem. How do we get this done quickly without making it too complex, which is something we tend to do.

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

I think it's massive for publishers. If you look at the ecosystem around commerce media in general, you have the brand looking to engage on a site, you have the retailer which 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 with offsite. The ability to take retailer data and extend it to a publisher site is incredibly exciting. Because you have to remember onsite closed loop attribution: I can see in real time exactly what was bought and how. It's a four-hour reporting loop. When I go offsite, I want those same closed loop metrics. So for a publisher, if we can match the data appropriately, whether through a clean room or other types of IDs, suddenly we have greater value for the audience and the time spent with it, which we greatly need in the open marketplace. That solves another problem too. If you look at the overall time spent with the three big platforms versus money spent — I mean, Google, Amazon, and Meta — when I was at an agency, they received roughly 50 to 55% of overall spend. And if you look at time spent, it doesn't equate. We know the majority of searches for products start on the open internet, on publisher sites like Yahoo, where people explore and find new things to buy. So by connecting these ecosystems, publishers will get the proper value for the engagement they deliver, which is exciting.

You know, we're incredibly diligent around privacy as we all have to be. The first thing is that retailers sit on first-party data. It's an opted-in environment where we've given our consent. That's the important thing to remember with these relationships. If we give consent and we're comfortable, it enables the ecosystem to run. So the ability to have first-party data, which isn't reliant on the cookie, is incredibly valuable. That's why you see so much increased attention to commerce media as a whole. When I go offsite, I have an identifier from the retailer that's first-party data, which isn't reliant on whether Google sticks with 2024 or pushes to 2025. But it also brings complexity 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 identifier I'm matching to? Where does a hashed email fit in? I think the industry has to simplify that. When I said earlier that we can make it too complex, that's an area of it. So we have to, as an industry, push ourselves forward, and it's not on one company to build the identifier — it's the ecosystem.

That's a cool space to be in. I've spent 10 years as a publisher, 10 years on the agency side, and now about 10 years here in ad tech. I think the coolest thing you're going to see is commerce media extend in three ways. First, more unique experiences in the retail environment on the website. That could be in-stream videos that educate us on something. For example, if you're going on a camping trip, how cool would it be to have a video showing how to set up the tent, use the grill, pack a backpack? That would be relevant. The same is true for cooking. Imagine going to a recipe site that had a link back with everything and knew the brands I prefer, and I could click a link, it goes to the retailer, and the items are delivered to me. That would increase customer experience and brand loyalty. The final one is taking the shop from the retail environment and pushing it out onto the open web. We live in a see, click, buy world, and a lot of that came from Instagram and Amazon. I think we want to take those same features we're comfortable with and extend them appropriately. So if we're in a how-to video or a recipe site, suddenly I can have this new experience. Or linking in-store activity as well. Commerce media exists in physical stores — the end cap, digital billboards outside. Connecting all of those things in a way that benefits the consumer is where we're going to see us extend.

No, what you're really doing is traveling as the consumer travels. We've gone from a physical world to a digital world with e-commerce sales, and all we're doing now is opening up points of discovery in that digital environment that enhance the customer experience, and doing it in a way that learns from our past. If we think back to the early days of digital with ads that followed you anywhere, that weren't relevant, nobody wants to go back to that. Or massive takeovers of a page that you couldn't click out of — you can't do that. So we want to learn from the past but enhance the customer journey and experience, and enable it. That's the path we're building.

CMOs have dramatically changed. We're starting to see convergence. For example, Best Buy, a large electronics store in the U.S., now has one individual overseeing two sides of the business: monetization, which is a revenue driver setting up a retail media business, and activation, which is buying on behalf to bring customers back to the store. Trade dollars used to be separate. Now we're seeing these worlds come together, with one person often responsible for all of it. That's a different change because one is a revenue driver and one is growth for the organization. We see that both on the retailer side and on large consumer CPG brands where budgets used to be siloed into trade and brand. Now with new closed loop measurement tactics that can extend to upper funnel branding activity, you'll see more dollars flowing around that. It's also changed the buying community — ad agencies. They face an efficiency problem. Last year, the average agency bought four retail media networks. This year they'll buy eight. In the past, search may have been a separate team, and there might have been a commerce team within a vertical. Now those things are coming together. That's much of the work Criteo is trying to do: bring efficiency to a fragmented ecosystem. We're also trying to educate because as it emerges and grows, we need to level it out.

No, yeah, accountability is the world we live in. Our ambition is to be the fourth ad stack: Google for search, Meta for social, Amazon for commerce within the walls, and Criteo for commerce beyond the walls. Since we founded the company in 2005, we've lived on accountability. Every dollar spent goes to day-to-day contracts on our performance tied to return on ad spend, not a click or a completed view — it's tied to the transaction on the page. We see a trillion dollars of transactions. When you live in that world, it can be incredibly rewarding. Our engineering team — we have 800 engineers — the excitement they get from solving a problem or building something, or the AI team coming up with a new algo that helps discovery, is immense because immediately you can tie it to an outcome and see the lift. The same is true as we move to retail environments. If you live in an outcome-driven world, accountability is with you every day. And I think we need more of that because you can't fake a transaction. Somebody spent the money on it.

I think this year's going to be interesting. The macroeconomics are choppy right now, and we're trying to see where it goes. We saw that last week with the reports from some of the big ad tech companies. But moving forward, it's going to be sustainable. I think we'll see significant growth around commerce in general, and that category will persist. We'll see it move into different avenues. I'm anxious about connected TV as it expands in different markets — it's exciting that Netflix is coming out with their ad offering, but it's a fragmented ecosystem. So I think you'll see significant growth, fragmentation, and then a few key players emerge.