Retail Media Losing Clout?; SCOTUS vs Ad Tech; DEI Stagnation; Google Black + LatinX Pub Summit

AdMonsters Wrapper: The weekly ad tech news wrap up
This Week
February 28, 2023
Are Brands Losing Love for Retail Media?
Supreme Court vs Ad Tech
Are These Marketing DEI Initiatives Going Anywhere?
Google’s Black and LatinX Publishers 2023 Summit
Around the Water Cooler
Retail Networks Might Not Be the Shiny New Thing After All
Judging from the press late last year, 2023 looked like it would be the year of retail media. eMarketer predicted that spending would grow nearly 26% to reach $51.36 billion and would even disrupt the linear TV market. Retail media is supposed to be a bright spot in an otherwise concerning market.

There’s no doubt that brands are spending on retail media, which is a Godsend to the retailers that attract those budgets. In its earnings report, Walmart noted that its ad revenue grew by 30% in 2022, delivering the retailer $2.7 billion in revenue and contributing to its overall profitability.

But a recent Association of National Advertisers survey revealed that marketers aren’t as enamored of the channel. In fact, 88% of brands say they feel pressured by retailers to spend in their channel, with some 42% feeling it’s just a cost of doing business. Some marketers hint that the relationship between the advertiser and the retail media platform can veer into toxic territory.

What’s going wrong? According to the ANA, brands credit RMNs with driving sales, but they’re not convinced they can drive brand growth. Brand growth is a far cry from brand awareness. Most brands (75%) want their RMN spend to result in direct sales. Only 18% say brand awareness was their most important goal for retail media.

It was a topic covered at AdExchanger’s yearly kick-off conference. In a panel discussion, Vinny Rinaldi, Head of Media Analytics, Data, and Technology at Hershey’s, suggested that retail media is pricey, but performance is not remarkably better than other data sets.
Why This Matters
Many in the industry pinned their hopes on retail media, especially as cookie deprecation loomed. It seemed like a win-win-win for everybody: retailers like Walmart benefited from diverting the marketer’s ad spend to retail media and higher average order values from targeting shoppers in real-time.

Advertisers benefit by getting their messages in front of consumers closer to the point of sale. Moreover, they can use the retailer's first-party data to hone their targeting strategy and reach the right user at the right time. And as a walled garden, they can attribute actual sales to their ad spend.

Meanwhile, shoppers are introduced to products they never knew they wanted.

Perhaps the RMNs over-promised the sales marketers could expect to get from advertising with them. Clearly, many expected to see meaningful brand growth at a time when consumers are cutting back.

It’s important to note that the ANA survey respondents are still bullish on retail media, and the ANA says that it is here to stay. The degree to which it grows will depend on how helpful the RMNs are in meeting the marketer’s needs.

“The next phase of growth for RMNs and value creation for brands will be through RMNs assuming shared responsibility with advertisers for driving brand growth as well as demonstrating the ability of their platforms to drive profitable incremental growth and positive ROAS for brands. Results versus relationships will drive the next growth stage, " Joel Paquin writes in an ANA blog post on the topic.
The Supreme Court Takes a Big Swing at the Ad Tech Industry
If you haven't been paying attention to the Supreme Court, we firmly suggest you do. They have their eye on big tech, and major changes may be on the horizon impacting the entire advertising ecosystem.

First on the docket:

Gonzalez v. Google. The Supreme Court recently heard arguments in this landmark case. The case will decide if the Court will make drastic changes to the 1996 law that protects service providers and publishers from being sued over the content their users post. This decision has significant blowback on any website curating third-party content. Of course, there are valid arguments for reforming Section 230, but mostly, no one has had any great ideas about how to drive that forward.

Even now, some speculate that SCOTUS will pass on making a decision and leave it up to Congress to decide. This particular case started after the ISIS Paris attacks in 2015. The victim's family sued Google because they felt they were responsible for radicalizing ISIS members.

And, after two and a half hours of oral arguments, witnesses say SCOTUS was confused about the plaintiff's arguments. The ball is now in Congress's court.
Why This Matters
Next on the docket:

SCOTUS v. Big Tech. The industry is worried the Supreme Court is ill-equipped to decide this case.

The court heard arguments against Google and Twitter, and the plaintiffs argued whether the companies are liable for the content that their algorithms promote. If the court doesn't understand the tech behind content recommendations and algorithms, its decision could create more problems than solve them.

"There is a valid concern that the Court may simply not understand nor appreciate the technical complexities that drive the modern web," wrote Jess Miers, a pro-tech Chamber of Progress lawyer.

SCOTUS generally makes laws about one broad principle, and big tech and the open web are far too complicated for that approach. For example, in 1979, the court ruled that police did not need a warrant to obtain a list of phone numbers you called because a third party (the phone company) already had access. Now that your phone holds a significant amount of data, including a person's location, it clearly violates privacy.

There are other areas where it is clear that the federal government does not fully grasp the full scope of the ad tech industry. For instance, the U.S. federal government struggles to create federal privacy laws. This became clear when Privacy for America recently called out President Joe Biden.

"Privacy legislation should distinguish between harmful practices that should be prohibited and responsible data practices like advertising that provide valuable information to consumers and are essential to innovation and economic growth," said the umbrella group Privacy for America.

Wherever any of these decisions fall, the industry and the federal government must cross the aisle and find a common understanding.
DEI Initiatives Are Flourishing, but Is Diverse Media Reaping the Benefits?
Adweek released its marketing "In and Out" list for 2023, and one of the major talking points was DEI initiatives. More specifically, they stated that "DEI pledges are out and "DEI action and accessibility in practice" are in." And they hit the nail right on the head.

They noted it had been nearly three years since media agencies committed to supporting diverse-owned media. From their perspective, only a tiny portion of diverse media has reaped the benefits.

In addition, diverse consumers represent nearly 40% of the population, but they get different attention than their counterparts. Will this change in 2023? If diversity is a priority for brands, it should show up in how they market to their audience, how they hire, whom they create partnerships with, and how they allocate funds.
Why This Matters
DEI initiatives came to the forefront of many industries after the death of George Floyd a couple of years ago. Brands wondered how to center their messages to include the voices of the marginalized population crying out from centuries of mistreatment.

Brands centered marketing campaigns around Black History Month and Juneteenth. They hired diversity officers. They even started to donate money to a small sect of diverse media. But where did that leave us? To many, it felt like lofty words to soothe a guilty conscience.

Now, diverse media owners are calling for action that breeds actual results for the marginalized population.

A recent study conducted by Direct Digital Holdings noted that despite diverse audiences making up a significant amount of the population, ad spend directed toward those communities remained the same.

In addition, brands that don't invest in these communities are missing out on significant revenue. Diverse audiences hold a substantial amount of spending power. They are missing out on $5 trillion of spending potential.

"Clearly, this shows that underrepresented communities have considerable clout, and it's a cautionary tale for those brands that take a one-size fits all approach to customer segmentation and marketing consumer goods and services," said Sheryl Daija, founder and CEO of the DEI trade group BRIDGE. "For companies and brands to be successful, they need to think of inclusion as their next big growth opportunity and implement it as a business practice across the workplace, workforce, and marketplace."
Google’s Black and Latinx Publishers 2023 Summit
L to R: Kerel Cooper, President of Advertising, Group Black; Ryan Johnson, Founder, Cxmmunity Media; Grouch Greg Watkins, Founder, Image sourced from Melissa Chapman, Part Two Consulting
In an intimate but packed room, Google hosted its Black and LatinX Publishers Summit in person for the first time. It was one of those events you just had to be in the room for, but if you weren't, we got you.

The event started with Managing Director of Publisher Platforms Darline Jean presenting mind-blowing stats about the substantial growth of Black and LatinX populations and their spending power, as well as focusing on how their cultures have expanded worldwide and become the mainstream culture. She cited examples of Hip Hop at the Super Bowl with Dr. Dre, Mary J. Blige, Snoop Dogg, Eminem, 50 Cent, Kendrick Lamar, and how Bad Bunny has brought Latin Trap to the mainstream. Plus, almost all of these artists have transcended being music artists into fashion, tech, TV, and film.

Next up was AdMonsters' content director, Lynne d Johnson, who breathed life into the room. Here are some highlights that stood out for us:
  • The power of the Cs - The Cs (Culture, Community, Collaboration, and Conversion) are what content creators should consider when cutting through the noise. You must have conversations and collaborate with your audience for the content to connect. Once they trust you, you can convert your audience and have them take action, from giving you first-party data to making purchases to clicking on ads.
  • When it comes to Community, Grouchy Greg Watkins, Co-Founder of AllHipHop hit it home. When AllHipHop started 25 years ago, people considered Hip Hop a niche audience, but these days Hip Hop has replaced Pop Culture.
"It speaks to the power of our community, we're consumers, but we also set the trends," Grouchy explained. "Building our community at AllHipHop, we reach about 5 million unique visitors monthly. It's interesting because people say that's not scale. That is one of the roadblocks that get put up before us. If 5 million people isn't scale, how about we invite them all to your office?"
  • Ryan Johnson, Founder of Cxmmunity Media, is doing big things to increase minority participation across esports and the video game industry. They focus on education and how gamers must become creators, not just players. Also, at the most recent FCC Media and Diversity Summit, Cxmmunity Media led a presentation on the link between gaming and STEM-based education. Cxmmunity takes pride in teaching students that being a gamer can qualify them to become an Epic Games marketer or an event producer at Activation Blizzard.
  • During a breakout session led by Beeler Tech's own Melissa Chapman, industry executives discussed traditional targeting methods and how they must change. Educating buyers and ad tech vendors is important because everyone must learn how Black and Latinx communities receive info. You can't just launch one campaign and say that's enough. Frequency is important. Everything isn't about reach. The ugly truth is that expectations are set higher for Black and Latinx campaigns, which is unfortunate. For reach to happen, brands can't just spend with one Black and one Latinx publisher. They have to run campaigns across multiple media outlets. Black or LatinX is not a monolith, but each has its niche communities within.
  • Eden Bridgeman Sklenar, CEO of EBONY, served as the closing keynote. As the curator of the Black experience — past, present, and future, EBONY got its start in 1945 but then lost its way after the death of its founder in 2005. The brand had to learn to find its way back: "A brand is no longer what we tell the customer it is. It is what the consumers tell us — to each other — it is." Now they behave more like a startup than just a legacy brand. For example, they have partnered with Google's Real Tone Technology, which represents the nuances of different skin tones, to bring to life digital covers. Just look at their steamy digital cover shoot with motion graphics featuring actor Jonathan Majors. "We are still transforming ourselves in creating our digital ecosystem. We say we are a global brand. We will have to have that type of infrastructure to talk to the diaspora. EBONY can not survive by itself. It has to find innovative ways to scale and find new audiences," said Sklenar.
One of the main themes to emerge from the Summit was partnerships — from Lynne's Cs where she spoke of collaboration to AllHipHop and Cxmmunity's focus on building community, to EBONY plans for moving into the future. Partnerships help build scale.
Around the Water Cooler
Just in case you missed it...

  • Very few brands are delivering on their diversity promises from 2020. Hue's recent State of Inequity report revealed that diverse hiring, promoting, and equity practices really haven't moved the needle much. (ADWEEK)
  • Google announced the launch of Android Privacy Sandbox. (Google)
  • With 1 million digital subscribers and an 11% bump in revenue, The New York Times has lessons for all pubs. (Omeda)
  • Has Vice become the poster child for Facebook's media bubble? (Simon Owens's Media Newsletter)
  • Digital video viewing to eclipse TV for the first time. (yahoo! news)
  • How did out-stream video evolve from a niche, unfavored ad offering to one of the biggest money makers? (ADWEEK)
Sweet Tweet
Local Storage Does Not = Compliance
Client asked a vendor what cookies they set. Vendor replied "in order to be GDPR compliant, we no longer set cookies. We store everything in localStorage instead".

This is what happens when everyone is too busy demonizing cookies to actually talk about how user data is handled. — @Jenn_Kunz
Worth a Listen
CafeMedia's CSO, Paul Bannister, on Publisher Strategy, the Sandbox, UID2, and OpenPath
Since CafeMedia is always on the cutting edge of digital publisher monetization, Marketecture's hosts asked Bannister for his perspective on the Chrome sandbox, Trade Desk's UID and OpenPath initiatives, and anything else pubs need to worry about.
Upcoming AdMonsters Events

Facebook   Twitter   LinkedIn