Customerland
Customerland is a podcast about …. Customers. How to get more of them. How to keep them. What makes them tick. We talk to the experts, the technologies and occasionally, actual people – you know, customers – to find out what they’re all about.So if you’re a CX pro, a loyalty marketer, a brand owner, an agency planner … if you’re a CRM & personalization geek, if you’re a customer service / CSAT / NPS nerd – you finally have a home.
Customerland
The Rise (and Further Rise) of Commerce Media Networks
In this episode of *Customerland*, host Mike Giambattista sits down with Eric Brackmann, VP of Commerce Media at Koddi, to unpack the evolving landscape of commerce media. As a leader in helping organizations monetize first-party data and enhance customer experiences, Koddi operates at the intersection of technology and strategy, enabling businesses to create meaningful connections between advertisers, suppliers, and consumers. With the rapid growth of retail media and its natural progression into commerce media, the discussion delves into the industry's complexities and opportunities.
Throughout the conversation, Eric highlights key trends, including the transition from endemic to non-endemic advertisers, the integration of digital and physical ad spaces, and the need for industry-wide standardization. He also sheds light on the operational and technological advancements shaping commerce media, emphasizing Koddi's role as both a technology provider and a strategic partner. This thoughtful exchange provides a window into how businesses can navigate the challenges of this dynamic ecosystem while keeping customer experience at the forefront.
what we're really focused on, at the end of the day, is how we create better customer journeys, right, how do we enhance that experience? Because if you're monetizing and monetizing an experience just to monetize an experience like, ultimately you're going to fail because it's it doesn't add value. It doesn't add value for the, for the shopper, for the traveler, for the consumer. And so if you can keep that focus, and then you can, you can start to layer on again the efficiencies of the systems that have been built over the years. You know, you start to see, you start to create magic, right, you start to create some really special things.
Mike Giambattista:Eric Brackman is VP of Commerce Media at Kodi and we've tried I'm going to say, three times now to connect and have this conversation, so I'm glad we finally did. Eric, thanks for joining me, I really appreciate it. Yeah, thanks for having me, Much appreciated. So, for context, can you tell us first of all tell us about Cody? You know the, the brief description of, of, of the company's place in that market space, and then maybe your role there?
Eric Brackmann:Yeah, for sure. Um, so Eric Brackman, uh, vp of commerce media um, I run our, our commerce media business unit. Um and Cody is is really focused on on helping companies um build and operate commerce media networks on one side of the business. So helping retailers, helping companies generally figure out how they're going to best monetize their first party data, their first party experiences, and really deliver for their consumers, for their travelers, for their shoppers, for their diners, as well as for their suppliers, for their advertisers and folks that want to get into that ecosystem. We also have a demand side business, so we work with a lot of advertisers as well to buy billions of dollars of advertising across the digital media ecosystem. So heavily engaged in all parts of the ecosystem.
Mike Giambattista:You know, retail media exploded, maybe what two, three years ago. It became a thing. Everybody who's got any kind of a media budget all of a sudden started exploring it and then dumping money into it, just like flooding the whole, the whole space. But commerce media kind of grew out of that, I would say, even more recently. I'd love to hear your views on what was it, what were those things that kind of prompted the morph from or out of retail media into commerce media? I think it was inevitable, but I'd love to hear your perspective on it.
Eric Brackmann:Yeah for sure. So there's a ton of data out there around how fast different digital trends have grown over the years. There was a search trend, there was a social trend. The retail commerce media trend, to your point, has grown quite substantially over the last couple of years, to the point that there's research out there that it's one in five, one in six dollars spent digitally are now spent within a retail commerce media network. And, to your point, even a couple of years ago that was quite small, and so the rate of growth is quite impressive. To your point also, there is this evolution in the industry right now from retail media into commerce media, and I think there's a couple of things driving it. One there is generally the idea that sort of anything and everything is a media network.
Eric Brackmann:As long as you have a first-party relationship and you've got first-party data and you've got the ability to monetize that, you've got an opportunity. One of the ways to think about it is data. A lot of what made early retail media networks successful was their transaction data. They were retailers and they could see what people actually bought. There's a ton of power in that. That's different than what people search for. It's different than what people look at on Facebook. It's what they actually bought with their wallet. You can start to build on that in different ways, especially when you start to think about loyalty programs. The hospitality industry, for example, has very rich loyalty programs spanning decades on travelers and you start to say, hey, what could we do with that in order to enrich experiences for travelers across the travel ecosystem? And so you're starting to see other folks in other industries wake up and say, hey, retail has done really well with their first-party data and creating monetizable journeys. How do we do that too? A couple other things to look at there.
Eric Brackmann:Retail media was very focused on endemic brands. You're an actual seller into that ecosystem. That was largely based on the idea that sponsored listings, sponsored products, were an overwhelming majority of the revenue in the ecosystem. What we are starting to see is that expansion into non-endemic retailers, right Sort of parallel products and services, non-endemic brands that are interesting to consumers of a particular trusted brand. There's an expansion of ad inventory At one point. Point was very much concentrated on on-site and how do you monetize the com and app we're now looking at how do you move off into off-site, non-owned and operated, into in-store on-prem opportunities. And then measurement, I think is the last piece of it. For me, measurement in the retail mediocre system was very concentrated again on that transaction that was happening at the retailer's point of sale. Brands are starting to think about that more holistically because there's a number of different ways that you as a consumer can interact with a brand and the nature of transactions evolve over time as well. So that gives you a couple of different angles to think about.
Mike Giambattista:Yeah, yeah, I'm sorry about what's going to happen to your afternoon schedule because we're just going to keep talking for a while. But it strikes me and I've thought about this for some time, but I'm glad I have you to ask this question too is that retail media networks? As you said, they were endemic. They were a much more direct connection between CPGs, brands, retailers and consumers. It all went through kind of a fairly direct system.
Mike Giambattista:But in commerce media it's a network approach which seems to me to be exponentially more complicated in terms of initiating the relationships, managing them, because I don't think you can just kind of do this and say we're probably going to need to manage in order to kind of effectively, you know, make that relationship efficient. So you know, as somebody who sits right in the center of commerce media, how is that managed? Because you know if, if all you're familiar with is retail media and kind of the systems that have been built around that to support it and to enable it. Commerce media is this amazing concept. It makes complete sense, but getting your head around about operationalizing it is a mind blower. So how do you do that?
Eric Brackmann:Yeah, yeah, that's a good question.
Eric Brackmann:I think the good news is we're not starting from scratch, right, there's a lot of good work that's been done within the retail media ecosystem to build up a lot of systems and platforms.
Eric Brackmann:There's a lot of good work that's been done in the larger programmatic digital ecosystem to drive efficiency and interoperability in some of these systems and interoperability in some of these systems.
Eric Brackmann:And so you start to piece those things together and you start to say, hey, you know, what we're really focused on at the end of the day is how we create better customer journeys, right, how do we enhance that experience? Because if you're monetizing an experience just to monetize an experience like, ultimately you're going to fail because it doesn't add value. It doesn't add value for the shopper, for the traveler, for the consumer, and so if you can keep that focus and then you can start to layer on again the efficiencies of the systems that have been built over the years, you start to create magic. Right, you start to create some really special things. To your point, there's a web of interactions across consumers and brands and you can, using some of the new technologies that are out there, from an AI perspective, from like a graph database perspective. There's different connections you can draw and different experiences you can highlight as you go.
Mike Giambattista:So does Cody actually consult and advise on the nature of the relationships and what activities you're going to try and highlight and leverage, or does Cody more fit over into, you know, a technology provider primarily role?
Eric Brackmann:We are primarily a technology provider and, you know, have a set of SaaS solutions that make it really easy for a brand to stand up and operate a commerce slash, retail media network, media network. That being said, we've got a ton of experienced operators in the business who have had the privilege of standing up and optimizing and running some of the largest retail and commerce media networks in the world. So we've got a pretty sharp team that is able to help with those things and that is inclusive of engineering, inclusive of strategy and operations, inclusive of ad operations. Uh, we've also got, you know, a very deep partnership bench of folks. You know that we work with um across the ecosystem to be able to bring something to to life.
Eric Brackmann:Um, the last thing I'll say is, like we are very much also in the business of empowering our partners to to operate these, these businesses um in the long run. Um. So one of the things that's you know a little bit different um about Cody versus some of our comp set is it's, you know, not just don't, don't hand us the keys and walk away. Right, we'd want to be an engaged partner and help help build um over time.
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Mike Giambattista:Having spoken to a number of people who are deeply involved in the space, they came from traditional digital media. One of the things that bubbled up through those conversations and I've seen it a little bit in other media is the the kind of um, huge amounts of waste. Uh, because of gatekeepers, because of click fraud, because of you know um and you know so your $1 at the beginning of the funnel comes out looking more like a dime at the end of the funnel, and I know that was a real concern as retail media really started to explode programmatically, because it's exponentially more complex and it's a full ecosystem play of you're actually interweaving ecosystems. I would just say do you see the same levels of waste? You've seen the potential for waste. What do you think companies or or commerce media networks can do to mitigate some of that waste? Is it a fair question?
Eric Brackmann:No, I think it is a fair question. I think there's a couple of things to consider within that frame. One, the commerce, retail media ecosystem tends to be very efficient and very performant. When you talk about, are you wasting impressions? Not really within this ecosystem. Are you needlessly wasting resources? When you start about, you know, are you wasting impressions? Not really within this ecosystem? Are you needlessly wasting resources? When you start to think about you know the environmental impact, the impact of having a bunch of servers running like. It's a very efficient ecosystem on the whole.
Eric Brackmann:Now there's a lot of support and operations and very smart people and technology underneath it, but, like in regards to the larger digital advertising agency or ecosystem, it is quite efficient.
Eric Brackmann:Now, on the other side of the coin, buying it can sometimes be a little bit clunkier than I think we want it to be.
Eric Brackmann:A lot of the retail commerce media world today is not programmatically bought. It's bought on IOs, it's bought via spreadsheets, it's bought via emails and managed service, and so there's a lot of things in the larger digital ecosystem that are just efficient in ways that commerce and retail media haven't quite cracked. I think what I think is really exciting about this space is like we've got an opportunity, where we sit today and over the next couple of months and years, is to really bring those two things together. Right, how do we take the hyper relevancy and buying efficiency of the larger programmatic ecosystem and put those two things together in a way that, like we truly get the best of both worlds? Um, I think that's the real unlock for us, as as a larger advertising agency is, or agency um ecosystem is to really to just to make that, to make that happen and and make it, make the make the system a little bit better as a result.
Mike Giambattista:Do you think that that the rest of the commerce media world out there sees the same potential there? I mean, I guess what I'm asking is do you think that's kind of a? A general goal for the industry is to kind of bring a more programmatic, scalable approach to this, or, um, because you're in it. You're in it day in, day out. I'm on the sidelines looking out, uh, looking in from the outside.
Eric Brackmann:So there are certainly pros and cons and there are certainly folks who are on on either side of that argument. Um, I think there, you know, if we're going to be fair there, there is risk that, um, you know, if you bring a little more programmatic flavor to commerce, retail media, that you might lose some of the thing that makes it great. Um, but I think you know, on the other side of the coin, we're starting to reach the limits of what's possible without more infrastructure and more standardization and more programmatic buying. So I think it's inevitable, it's going to have to happen.
Eric Brackmann:I would think it's just a matter of how do you make sure that it it stays, it stays good, it stays performant, it it keeps the magic um that has, that has made it take off over the last couple of years.
Mike Giambattista:Um, I think that's the secret, um, like that's what I'm I'm super committed to so, um, great, you just created the next question, which is you know what are some of the things that people in the space are going to have to do to keep the magic as it grows, as it becomes more sophisticated and layered?
Eric Brackmann:It's a good question. A couple of things for me. One again is really keeping a focus on making sure you're driving the right end customer experiences. If you keep that focus, that foundation, and you're actually trying to make sure you add value with every click, with every interaction, that's an additive experience. That's got to be pillar number one. Number two we've got to, as an industry, standardize a couple of things.
Eric Brackmann:There's been a periferation of retail media networks over the last couple of years and there's good and bad in that. I love the idea that there's differentiation in those places and we're unlocking value in places where there wasn't value before. But there's also some things that are different, not necessarily because there's value being driven, but just because they're different, and so, like, how do we find the things that are value creating versus the things that just need to be standardized? So some level of standardization, I think, is going to be needed there and there's efforts underway that we at Kodi are contributing to from the IAB and standards organizations to be able to get there. I think number three is really the adoption of an RTB framework for retail media. There isn't one today. The IAB doesn't yet have guidance there, but really making sure that that actually works, and getting all of the, the, the major ecosystem players, on board. Um, with the, the way that this should be bought and sold programmatically. Um, it's probably the third pillar to make sure that it that it, that it really works.
Mike Giambattista:From where you stand, do you think? I mean you know the God bless the IAB, because I think they have an impossible job. I mean it's I don't know whoever's running it. You know I'm buying that person a beer. But you know, especially at this early stage of commerce, media, I mean people are staking out their ground because of their own beliefs and their own methods and their own ways of doing things and, um, it would seem to me that that there's a lot of um. You know, I I resist using this analogy, but the phrase is like. You know, it's still a bit of a wild west out there, which means there are some cowboys out there and girls still bent on doing things their own way, regardless of what might be better for the industry. We have no need to call anybody out here, but do you think that the industry overall is ready to commit to those kinds of standards and best practices?
Eric Brackmann:I would say that the short answer is yes, and I think the normal argument there is that it's sort of. It's differentiation and innovation or standardization. Okay, it's an? Or conversation. Honestly, if you ever get the pleasure of working with me, one of the things you'll hear from me is about the tyranny of or, because I'm a big believer in, and that there's got to be a way within this industry to achieve differentiation, to achieve the right customer journeys, to achieve the right level of monetization, to achieve new levels of innovation in the space and address some standardization. It may be different segments of inventory, it may be different segments of audiences, it may be different segments of experiences. I don't know what it's going to look like, um, but there's got to I I'm a big believer in that it's, it's gotta be an end um, in order for us to move forward, um. So I don't know, got to beat the tyranny of war.
Mike Giambattista:There you go. Well, that's what we'll name this, this, uh, this episode beating the tyranny of war. Um, okay, so I think this was e-marketer, but I'm not quite sure. I just can't remember. But there was a list of 10 predictions for retail media and I'm just going to extend that out into commerce media for 2024. And um, this being an audio medium, I need to ask for a response. That's more than a shake or a wave of the head. But, um, I'll just read through them and you can tell me what you think. Short answer, long answer, doesn't matter. Item number one AI increases in importance, both generative and predictive.
Eric Brackmann:That continues to be number one for me. I think AI has got huge potential in the commerce, retail, media space. I mean media generally, the world generally, but in this industry specifically, you start to think about enhanced personalization, relevancy, predictive capabilities. There, operational efficiencies I think are going to be huge within this ecosystem. I think are going to be huge within this ecosystem. So, the amount of you know person power that it takes to to traffic and run a campaign, um, and have that campaign act, you know, be good and meet its objectives, um, it's, it's all, it's all getting dramatically more efficient.
Eric Brackmann:Um, you're seeing it in creative. Uh, you're seeing it in the, the end user experiences. Um, I have a somewhat bold prediction that someday search will dramatically change as AI comes about. You think about the way that we today engage with a lot of retailers, a lot of brands is you go to a website, you put in some keywords, you search for something and a list of things comes back and you maybe add some filters, but ultimately a lot of retail media. Today, again, being in the sponsored products category is about how do I get to the top of that list.
Mike Giambattista:Right.
Eric Brackmann:I think in an AI world, there may not be a list, right? You may actually just show up at a retailer and they may know what you want because of everything they know about you and your purchase patterns. And here is the best set of products for you to just add to your basket and check out, add to your cart and check out, and so, you know, is that maybe a little bit scary If you run a search-based ecosystem today? Maybe, but I don't know. For me, it brings about a whole host of new opportunities for monetization and new opportunities for better customer experiences. I don't know, I think that's you know. Is that going to be a 2025 thing? Probably not. But you know, if you told me by 2030 that we were all still searching for things when we went to buy something, I don't know that I'd believe you.
Mike Giambattista:Interesting. I'd like to have coffee or beer with yourself and one or two other people that I've spoken with recently who have nuanced views, maybe slightly different, on that same topic, but again, that's another conversation. Okay, next item AI changes the way shoppers find products. Just addressed it. Jumping ahead of me, check Three more sensible investment in the in-store rollout. This pertains more specifically to retail media. Let's see Four measurement cracking the incrementality nut back on three, the in-store piece of it.
Eric Brackmann:There is a sort of broader commerce media angle there where you're seeing airlines starting to think about what does an in-airport, what does a seat-back experience look like? Hotel brands thinking about what does a lobby experience look like? Obviously, stores in-store. So I think there's an angle there where we start to think about hey, how do we blend some of the digital and physical world together? I think sensible investment is an interesting way to put that.
Eric Brackmann:You know, we're in a little bit of a CapEx-strained world right now, and so you know, do I think those digital out-of-home experiences are going to get really, really big in the next six to 12 months? Probably not, given the amount of investment it takes Now. Do I think the ROI is there? And do I think there's a ton of potential 110% and so how do we find ways to reuse assets that are already in the world to fulfill some of these experiences? And so I start there are a lot of places where screens already exist in stores. You know, there are a lot of places where screens already exist in stores um, in airports, in seat backs and how do we start to use those um in a slightly better way, right, a better experience, better monetized, more, uh, more personalized um, but I don't know that we're going to see a perforation of a whole bunch of new screens in the world, um, in the next, next year okay, um, we did touch on a little bit earlier.
Mike Giambattista:But number four here measurement cracking the incrementality nut yeah, incrementality, uh, is an interesting one.
Eric Brackmann:So, um, you know it's a big question in the space right now of you know, can you, can you prove increment incremental revenue, um, as a part of of a commerce, retail media campaign? Um, and you know, origins of the industry were definitely in the shopper marketing dollars, where incrementality wasn't really something that the industry was was concerned about. Right now, more broadly, people care about that from a digital advertising perspective, and so it is a question that's coming up as the budgets get bigger and as you start to tackle larger brand and national budgets as part of retail media campaigns. I think the good news is generally the partners we work with and the technology that we've got in place to measure that on an ongoing basis. It looks pretty good. The results are quite positive, and I say that not just from a retail perspective, but across the ecosystem.
Eric Brackmann:Incrementality is strong. Now the reality is you've got to be able to prove that and you've got to be able to report on it repeatedly, and it has to stay true over time. Another thing you'll hear from working with me is that you know the average is mean, but the variance is meaner, and so you know part of making incrementality work is that there can't be a ton of variance in it. Right, it's actually got to be consistently good in order to to continue to justify the investment.
Mike Giambattista:Retailers become media companies.
Eric Brackmann:It's already happened, I feel like that's a bit of a gimme.
Eric Brackmann:Yeah, it is definitely a gimme, um, it's actually one of the funnest things about this industry for me, though, is, um, you know, companies largely are starting to monetize in ways that maybe aren't necessarily um, the thing that you think that they do right.
Eric Brackmann:When you think of, um, of some of these household branch like, oh you know, I think Amazon's a prime example of this, right, you think Amazon is a retailer, right, um? But then you go look at their, their 10 K and look at, you know, the dissection of their profitability and the way that they actually make money, and it's like, oh well, amazon's actually a media company, right, right, yep, amazon's actually a media company, right, and so, um, you know, that is that is true of a lot of companies in the in the retail space, um, and then you start to to take that outside the retail space. That's becoming truer and truer every day, um, and the fun thing for me is you start to talk about, like you know, the, the broader commerce trends outside of media. Companies are starting to monetize in ways that are just not their core business, and so that starts to present all sorts of different and unique opportunities for partnership and monetization Media, not media within those ecosystems. So probably a whole other episode that we can talk about.
Mike Giambattista:It's a big one, it's a, it's a huge deal. I, I, I think, I think you're right we could, and you know that's its own episode for sure.
Eric Brackmann:Yeah, I mean you start to think about, you know, are airlines really airlines or are they? You know, credit card companies and media companies.
Mike Giambattista:Well, I forget that. I forget the the exact numbers, but United Airlines, a couple of years ago, maybe three, four years ago, published the value of its loyalty program. It exceeded the value of its actual airline. Quote unquote operations.
Eric Brackmann:Correct by a huge factor too, yes, and so again, is that airline running a loyalty business with a credit card and a media business, or are they? Are they an airline and it's like, well, maybe both, you know it's, I don't know. Just it's interesting to see the way the world has evolved and things you wouldn't have thought possible 10, 20, 30 years ago.
Mike Giambattista:Well, you know, I think and that kind of leads into this next question at the land grab fuels a talent race.
Eric Brackmann:Um, yeah, that's a that's a fun one.
Eric Brackmann:Um, the industry is certainly expanding um within um, commerce, retail media, um, and so much so that, um, you know, there's not a ton of people who know how to do this really, really well, and so that's where there's certainly a battle for talent right now, within this ecosystem, there's a couple of fun things that are happening.
Eric Brackmann:One you're starting to see actual commerce and retail media programs pop up at a lot of elite institutions, which I think if you had told me that was going to be a thing five years ago, I would have called you crazy. Yeah, never saw it coming, never saw it. You like, now get a degree in retail media, all right, let's go Um, and so, like, you know, the, the larger industry and is moving towards, towards filling that gap, um, and I think the other fun thing is you're you're starting to see a lot of um again. Folks from the programmatic space, um, so, especially in some of the agency worlds, sort of get retrained into into these eco, into these ecosystems, and so for me that's exciting because, um, you know, it brings a whole bunch of new ideas and and new opportunity, um as well.
Mike Giambattista:I mean, you know along those lines and I think it goes back to one of the earlier points we were making is that, um, you know, traditional programmatic digital media has a kind of well-established workforce structure. You kind of knew what you needed to have in place, personnel-wise, talent-wise, to pull this off. And retail media came along and kind of shook that tree a little bit and now we need it to look like this. But in commerce media it looks like that plus an awful lot more. I mean you need, at least at this phase of the game, a lot of boots on the ground to manage those relationships. That's a lot of stuff going on.
Eric Brackmann:Yeah.
Eric Brackmann:So I think that, again, that's what's fun is like you're getting more and more people into this ecosystem, more and more people understanding it, more and more people building competencies, and so I mean, the other big thing actually Cody's going to be announcing here pretty quickly is our commerce media certification program, and so we're building out a full-fledged sort of ecosystem of courses specifically around how to operate in the commerce media ecosystem as operators, as buyers, as sellers, as technologists, and it's sort of content from our collective experience in this space that goes back you made the point earlier it's been a couple of years, some of the old guys who have been in for for a couple of decades.
Eric Brackmann:But you know, building all of that, putting all of that experience together and really and making it freely available to anyone who wants to to get certified, yeah, so we're we're super pumped about that. A bunch of stuff that's that's coming out. It's something that we as as operators in this space kind of saw as a gap. It's like, hey, there isn't anyone to the point earlier. There's, there's universities that are starting to build programs around these things. But, you know, for folks that are out in the, out in the world, out in the workforce. How do we, how do we reorient them around some of the new paradigms? So it's an investment we've been making recently to be able to put together a whole bunch of content to be able to do that.
Mike Giambattista:Wow, you know I'm going to take a careful dogleg here, but you know my experience with elite universities or any universities that are teaching new, new business technologies and paradigms that, no matter how good they are, they're still behind the actual, the curve of actual commerce. I mean, we're you know Cody's developing the curve and other people are teaching about it. So I would say this is this is my own lame plug for saying you know, if, if you're going to look for some place to learn about this space, go to the people who are developing it, namely Cody.
Eric Brackmann:There you go. Shameless plug academykodicom. Go check it out. Right, when is it going to be available? Unofficially, you can start taking courses today. Officially, it goes live next week, I believe.
Mike Giambattista:Wow, that's a really big deal. That's huge. Well, you heard it here semi-first. Well, eric thanks a million for this. I mean, I've said it a bunch of times already in this conversation, but there's so many different directions we could go and I think that, um, I think the audience for this podcast and the readership we have on customer land, um, need to know this. They're they're anxious and excited to know what you're doing and your counterparts out there in this space. So you know, I'm going to work hard to get back on your schedule at some point.
Eric Brackmann:Yeah, I think we've got a couple of things we can talk about Super excited.
Mike Giambattista:Lots going on here. Well, Eric Brackman is VP of Commerce Media at Cody and just officially thank you, Really appreciate it.
Eric Brackmann:Yeah, thank you for having me.
