Margo Kahnrose 0:00
It's our job to empower the customer to perform whatever action they want to perform rethinking this funnel concept, understanding that it's collapsed. It's dead that things happen a lot faster and a lot more fluidly between channels right now.
Ben Kaplan 0:14
This is the podcast where we go around the globe, enough marketing leaders for the world's biggest brands, fastest growing companies and most disruptive startups, re ideas packaged a certain way want to spread they want to be told us someone else's simple, surprising and significant data. Unlocking viral creativity is to make it rapidly scalable. This is TOP CMO with me, Ben Kaplan.
Today I am chatting with Margo Kahnrose, the Chief Marketing Officer at Sky, an omni channel digital advertising platform. Mario has a wealth of experience in marketing, having worked with brands like spot hero, and kenshoo. And she's an expert in global creative direction, brands strategy, product marketing and digital media. Throughout her career, Margo has spearheaded groups of designers, marketers and freelancers in the development of brand campaigns, playing a significant role in an array of projects, such as corporate rebranding, product rollouts, and business expansion into new territories. So how can we think about the traditional stages of customer acquisition? And how are new channels disrupting the way it's normally done? Let's find out with Margot cornrows. Margot, it's interesting because you talk about how you know there's a shift to performance marketing now. But that shift isn't the same as performance marketing, how it was really pre pandemic. So what is the shift that you see going on now in performance marketing? And why are these retail walled gardens suddenly even more important than ever before,
Margo Kahnrose 1:48
I think the shift is in how important and how big of a chunk of your mix performance marketing is looked at today by major brands, as opposed to you know how it was looked at earlier, like think about like 10 years ago, I mean, performance marketing is nothing new performance advertising is nothing new. So the idea of, you know, creating, and it's usually digital formats, creating advertising that drives a very direct measurable response that you can, you know, really cleanly connect to the bottom line of what you're trying to achieve as a marketing team, or even as a business. But the channels have changed. And with the advent of retail media, and all of a sudden, so many new publishers for any brand to have to consider being present on being visible on and being, you know, fully optimized across all of a sudden, it's not just a matter of managing Google ads and Facebook ads, it's, you know, a matter of a full diverse set of social media platforms that you've got to be on, and a massive set of retailers that if you're any kind of consumer brand, you know, you're gonna want to be considering buying ads across. So partly, it's just, you know, the the channel, the media set has expanded, partly, it's the importance of performance marketing and your mix, especially since the pandemic, when we've been going through ups and downs in this crazy macro economic climate, we really can't predict kind of what the next six months are going to look like. And CMOs are being looked at to make investments that have short and midterm payoffs, not long term, you know, endless fuzzy measurements behind them. So there's a lot of pressure to invest in performance media, there's a lot of performance media to keep track of. And then I think the other really interesting thing that's changing is what it means to be a performance marketer. I mean, it used to be about which channels you leverage and how well they perform for you as a as a marketing or as a business in terms of hitting certain KPIs. Today, performance marketing performance media needs to perform for the customer, the customer is the one driving traffic, they're the one deciding know, how they want the relationship with a brand to be from what data they allowed to be used, from what you know, they allowed to be tracked from what they're opting into, to, you know, kind of how quickly they move on to a competitor if they're not happy with the interaction that they're getting with the brand. So the customers driving the traffic and the media and the approaches that performance marketers have to take have to allow customers to perform whatever it is they want to perform, just to break down
Ben Kaplan 4:25
all that. And people are kind of new to this and need a retail media. I mean, first of all, the journey and sort of retail sites having their own audiences and selling ads against them. And we're talking really this started by folks like Amazon, who started to you could just take an ad out on Amazon. We're seeing that cascade to other places. So it goes to Amazon competitors like Walmart and goes to other types of retail companies, whether it's Instacart, Target Lowe's, Home Depot, it start spreading out from there for anyone who has an audience. And then when you say work well for the customer. You mean for those companies like they want To see the ad perform well, or they're going to find a more efficient way or more efficient use of that space in terms of driving overall sales, is that an accurate rundown of the journey to where we are now in the types of companies and sites we're talking about,
Margo Kahnrose 5:13
I actually mean, the end customer, you know, the consumer, the person that the brand is trying to reach through all of these various media channels, when I think about, you know, advertising, typically, in the past, it was all about, you know, different channels are meant to contribute to goal X or KPI y, at an expected stage and the shopper journey. So, you know, we used to think about upper funnel stuff, those were tactics that we use to build awareness, and, you know, maybe start to drive consideration. And, you know, the ad formats that you would use, they're things like television, or radio or out of home. You know, they didn't necessarily or even, even on digital, like programmatic display, you know, these were measured by reach and frequency, we don't really know how much they contributed to maybe like the bottom line, you know, and conversion, which was typically a product sale, or at least a click through to something like that. And that was fine, like those ads had a job to do. And then lower funnel media had a different job to do. And that all kind of made sense, I think, back in the day, when the customer journey was really linear and predictable. And, you know, we did see this kind of typical funnel shape, as customers, you know, kind of went through the discovery process all the way to, you know, to end game to conversion. But today, things are happening so much faster than that customers themselves, you know, they want to be empowered to interact with brands, however, they decide they want to interact. So sometimes, you know, you're seeing an ad for the first time on TV, and you're ready to purchase, you know, or you're being influenced by an ad on social media and you're ready to purchase, you're not like in this kind of long, slow burn discovery awareness mindset. And sometimes you're, you know, looking at a shopping ad, like a Dr. AD, that's, you know, right at the point of sale, and all it does is kind of spark discovery for you, we can no longer as marketers predict what a customer is going to want to accomplish out of each engagement that we have with with them. And so you know, it's our job to empower the customer to perform whatever action they want to perform at every, you know, engagement with us. And that means rethinking this funnel concept, understanding that it's collapsed, it's dead, that things happen a lot faster and a lot more fluidly between channels right now. And performance marketing has to enable the customer to perform whatever it is that they want right now. And of course, it has to perform for marketers, and typically, to your point about retail media, and the number of like ad networks that all of a sudden marketers if you're you know, a consumer brand and you're you're selling products through E retailers, all of a sudden, you've got not just one or two more big media platforms that you've got to be making sure that you're present on but you know, 10s, potentially hundreds. So the challenge for marketers is no longer about like optimising bids and budgets, everyone can do that. We all have the tools, they're not expensive anymore, you know, to really, you know, drive really good performance through performance marketing is not hard. The challenge is really about managing that entire publisher mix, managing the one to many, and ultimately, you know, one to many to one path, I think is the real challenge for for marketers right now.
Ben Kaplan 8:36
At top agency, we think about both the path to purchase and the path to passion. The Path to Purchase begins with awareness where Curiosity is sparked any brand or product enters the spotlight. As the consideration stage unfolds, customers play detective, comparing alternatives in a quest to find the perfect match. Finally, the purchase stage arrives like a grand finale, where the customer now fully informed and confident makes the decision to buy. On the other hand, the path of passion is where casual customers become loyal devotees. Customers first experience your product or service, beginning with unboxing or onboarding. As customers returned to the product or service, they experience repeat use that increases their bond with the brand. They're having a continued great experience. Eventually, these customers blossom into raving fans and advocates passionately spreading the word to others and seeing the brand's praises. The past the passion is a love story between a brand and its customers where unwavering devotion and advocacy paint a picture of loyalty that can last a lifetime. So what's more important for a brand, mastering the path the purchase or the path to passion without understanding the former You'll never grow as fast as you can, without the ladder, you'll never be a brand for the long term. What if you can master both? Well, they'll definitely become a market leader over time.
Margo Kahnrose 10:14
I think that idea that construct that, you know, awareness to consideration or discovery, awareness, whatever consideration to purchase, that's a construct that as marketers, you know, we've relied on for a long time, because we could architect that journey for customers, you know, digital was our playground, and we could guide customers, you know, kind of through the experiential, you know, kind of touch points that that we had in mind. And the explosion of E commerce really, you know, kind of changed that power dynamic, even if you just think of Amazon, and all of the brands that we have access to as customers now that we never even knew existed before, there's this kind of levelling of the playing field that happens on E commerce where, you know, everybody's got the same shelf space, digitally. And as a result, customers have more more competition to choose from, for any given purchase Big or small, they have the ability to compare and, you know, kind of evaluate every different factor that's important to them price quality reviews in seconds. And as a result, they're in control. And, you know, we as marketers, we just want to enable them, you just want to enable them to, you know, make that impulse buy, if that's the mindset that they're in, we want to, you know, enable them to build a relationship with us if we've made a good impression, and kind of stay in our universe. And I don't think we really knew what was possible before retail media, retail media really taught marketers that, you know, you could use advertising to drive sales immediately, like, not, you know, kind of down the line. But immediately, advertising could be shoppable, and other performance channels, took the cue, you know, from search ads, to specifically social media ads, with the explosion of social commerce, you know, this is this is all kind of spurred from the shift to digital, and this kind of rethink of advertising as something that has to captivate and drive instant, you know, instant results, or at least it could, and if it could, wouldn't you want it to, you know, if you're a brand, would you rather, you know, kind of build an impression over time and hope that eventually it results in a sale? Or would you rather get that sale right away, and you know, work on retaining that customer, you know, driving them to passion, as you put it, once you know, what's possible, it's pretty hard to go back,
Ben Kaplan 12:45
what is the role of the pandemic and accelerating all of this? Is it just that a lot of these retail media are walled gardens, as you put it, just need a certain amount of traffic to be a viable ad platform and the pandemic, everyone went digital and it just supply the traffic? So it just like got this stuff off the ground? Is that the legacy of the pandemic and this or is it something different?
Margo Kahnrose 13:06
You know, I think the pandemic really created a shift in timelines. So, you know, we at Sky, you know, we work with enterprise level businesses, so they could be massive household name, you know, CPGs. And we work with direct to consumer companies or emerging brands, what we saw was, you know, the direct to consumer, you know, kind of emerging brands like their Digital's their playground, ecommerce is their is their world. So they were native already to not just, you know, selling in that way, but you know, being really good at direct response advertising, using search and social to drive traffic and sales. All they had to do was think about, okay, so are we ready to, you know, sell through more distribution channels like, you know, broaden our reach through, you know, by, by selling on some of the marketplaces, for example? And if so, you know, what advertising do we need to use to support those efforts? What was really wildly interesting, I think, to us as a business was to see these massive brands, you know, the the leaders of category, with huge budgets, the ones who put those, you know, $6 million Superbowl commercials on every year, really be kind of caught, unawares, when it came to moving things digital. So first, you know, they all of a sudden had to sell digital. If you were a brand that was used to selling through the grocery store, than, you know, the physical grocery store was actually your client. You had more feedback from them than you did from the end customer.
Ben Kaplan 14:39
That's important just to jump in on that because from the brand perspective, if you say customer, they actually mean the store, the consumer would be the end person purchasing, but for them, their customer, their person they have to satisfy is like a buyer who's determining you know, what kind of shelf space they're going to get that their customer and as a result, they're We're very conscious of what is the relationship with these customers versus I'll give you an example of a client, where they sell products at Home Depot. Because of that relationship, Home Depot will come to them and say, Hey, we need a new cat, we see this emerging trend, millennials are buying this kind of Home Improvement product, we don't have a good product there. Can you make one for us? And it's the symbiotic relationship. So how does it work now with retail media, walled gardens, and has that changed the dynamic of the relationship between the brands and the retailers, and what that dynamic is?
Margo Kahnrose 15:32
Absolutely, I mean, you know, first of all, the customer became the consumer, that happened, because brands that you know, typically you wouldn't buy online, you suddenly were buying online, like, suddenly you were buying ketchup, you know, online, you were ordering it, through Instacart, or from Amazon, or from, you know, any one of the grocery kind of category stores that that went big online during the pandemic. And it's a different universe, when you know, your customer buying online versus buying what's just in front of you, and the store that you you know, is convenient for you to go to all of a sudden, any store is convenient for you to go to. So if you're that ketchup brand, and you've never really had to think about how to reach and engage that end consumer, when they've got so many more brands that all of a sudden, they're you know, or in their consideration set, it was something you had to start thinking about right away. And you a lot of these companies really didn't have a lot of data about their end consumers, they didn't have the performance marketing chops to, you know, kind of drive traffic to their offerings. And when retail media, you know, kind of heated up as an ad format, all of a sudden, you know, the competition was that much more fierce, because there were those who were just paying for more eyeballs, you know, and if you weren't actually paying to be visible through sponsored listings, as well, you know, as well as organic listings, then your chances of getting into that, you know, kind of end consideration set, were completely reliant on brand familiarity and brand loyalty. So, we saw these really big sophisticated brands have a very steep learning curve, when it came to digital marketing to actual end consumer acquisition. And, you know, that was a that basically accelerated the speed at which they were going after acquiring some of these, you know, kind of more digital chops, like five years in a year. And that actually put the pressure back on D to seize you know, on the the digital native companies who weren't used to having to compete in their own backyard with mega you know, mega brands with mega budgets. So you know, both both kind of sides of the marketplace really had to get very sophisticated very quickly. And it became a game of not like, who can optimise their ads the best, although that was important. But you know, who kind of really understood the end consumer and all the changes they were going through the most and who could support that that person, so that they could build a really, you know, kind of a lasting relationship that that is the now relationship, the relationship where, you know, brands are not the ones designing the flow, consumers are basically telling brands, what they want out of them.
Ben Kaplan 18:18
And then of course, it brings in a whole bunch of other factors. Because if you're now closer to the point of sale, if it's digital, now, suddenly, maybe you didn't care that much about your product reviews, if you weren't in that channel that were online, but now like now, you really care if it's like right next to your ad Are people really, so suddenly, you have to get other divisions of your marketing team like up and running, because now we have to do that. Also, if it's mostly just Facebook and Google, and it's kind of this duopoly, then it's simple. You can have separate teams, or you're doing search or you're doing social, you don't have to make any of that really talk or communicate at all. But suddenly, it's not just that it's changing, it even could impact the structure of your marketing team might need to change, you might need a reorg if you're a CMO, just to make all these things work together.
Margo Kahnrose 19:01
Yeah. And we're seeing that, you know, basically what we're seeing is wave one was like, adopt retail media, in addition to the other channels that you know, you're already putting money into and test some budgets out and figure out what it can do for you. Maybe even figure out which retailers are your best, you know, or your best bet beyond maybe Amazon because for a lot of companies, it's not just an Amazon world. But then there was phase two. And phase two is where you say Alright, so this channel isn't going anywhere. It's a big moneymaker. Both for brands and for, you know, the retailer's themselves, because we know ad revenue is very profitable revenue. So if you're a retailer, you want to add that revenue stream as quickly as possible. So now like, you know, really where the rubber meets the road is can you connect what's happening and your retail media marketing to the rest of your advertising? Can you start to construct you know, a connective thread Add between your other performance channels like paid search, like paid social, and you know, channels like programmatic display, and of course, things like connected TV, can you start to connect the dots between those, because now you've got a lot of publishers to think about. And the other thing we haven't even talked about yet that was happening at the same time was the loss of data signals that marketers suddenly were facing, as everything moved from, you know, opt out to opt in. And we saw, you know, kind of the impending death of the third party cookie, which is the thing that marketers had been relying on primarily to piece together a holistic view of the customer across all of these different touchpoints. And channels, what has
Ben Kaplan 20:41
been the impact on the traditional publishers, meaning not the retail sites, they want to sell ads to buy this moving towards closer to the point of sale, digitally speaking, plus the loss of third party cookies, what have you seen as the impact and all the other publishers that might have been top of funnel kind of a way just have big audiences, eventually, you're going to send people over with an ad to convert somewhere else? What has been the impact on them?
Margo Kahnrose 21:07
Well, the whole world of, you know, kind of open web, programmatic advertising is undoubtedly existentially challenged. I mean, it's, it's going through a lot of change. Because what worked for 20 years was suddenly not available anymore, to be kind of like the through line for marketers. And at the same time, those channels, if they were, if they wanted to be considered performance channels, you know, when when push comes to shove, and the push on the show of being, you know, the economy, ins and outs of recessions performed, really what's really performance is going to be scrutinised, and you're going to be held accountable to it. So what we've seen is a shift, we've seen a shift of dollars from open web advertising to you know, closed web are these these walled gardens that I'm talking about. Because these are environments that are not reliant on on third party cookies to kind of piece together what's happening with, with the customer, they have their own, you know, kind of first party relationship with customers, they've already got all the opt ins and permissions that they need in order to serve good advertising. And as a result, you know, they're kind of future proof for, for marketers, the question really just becomes, How can marketers connect the dots between them if they have these, you know, walls, so to speak, guard railing, all of that, that rich customer data.
Ben Kaplan 22:34
Platforms like Tiktok are revolutionising the way we think about advertising by blurring the lines between top of funnel branding and bottom funnel conversions. Shopping media is becoming an increasingly popular way to engage consumers and drive action. What if customer awareness, consideration and purchase, or we just described as the path to purchase could all be delivered by the same piece of content, with the audience experiencing it in different ways, depending on where they are in the process? This innovative approach can be the key to making advertising dollars work for you, like never before. So what's this all gonna mean five years from now? And what is the next phase after shoppable media?
Margo Kahnrose 23:22
I think the idea of shoppable media is only going to accelerate. So I think you're going to see a convergence of what we would think of as top of funnel advertising and bottom funnel, you know, kind of calls to action, I think we're gonna start to see sort of a mash up happening where even even kind of broad awareness tactics are gonna tie directly to actionability and kind of real business impact conversions. So I think those you know, kind of KPIs what we expect from branding advertising is going to look quite similar to what we expect from performance advertising, first of all,
Ben Kaplan 24:01
and we're already seeing that some what I mean was recent news from tick tock that there's now shopping ads, and there's gonna be more and you would have thought of tick tock is just a branding platform, right? This silly video of someone dancing or something with your product, just good to get your name out there, but maybe it's closer to the end of the funnel than we think that would be one example.
Margo Kahnrose 24:19
Oh, yeah. I mean, Tiktok made me buy it, you know, like, that's, that's, it's a hashtag for a reason. Yeah. I myself have bought like three products in the last you know, two weeks because of being Tiktok influenced, what did you buy? There's a line of bodywash at Target called cream. Oh Cremo and I'm like a big fan of very expensive perfumes, it's a bad habit, the labo brand and Tiktok you know, influencer said, this is like an affordable line that you know, smells like the lay labo you know, kind of luxury scents. So, you know, something like that. I'm like done, I'm gonna go buy three of them and
Ben Kaplan 24:53
you're a savvy marketer, you know, you're being marketed to So did you like still that's spot on for what I'm looking for actually. Bye.
Margo Kahnrose 25:00
Can I just tell you, when I was checking out, the guy at Target said, Oh, I've heard of these. And I heard of a different one, too. I actually heard of them on tick tock. And I was like, Yeah, me too, can really like it. I mean, it's, it's hilarious like you can't, you know, can't make a better ad for the platform's advertising goals. And I think the other big shift that we're going to see is in the way technology is expected and utilised to, you know, kind of support these efforts for marketers alike, we've been in a kind of a big soup of point solutions. When it comes to tech platforms for the last 20 years, and there was all this kind of like, best of breed buying behaviour, that I think is gonna be a lot less relevant with so many new ad publishers to keep up with, it's really going to be about driving efficiencies of scale, you know, kind of looking at ad tech, the way you look at SAS as a marketer, having kind of controlled costs more transparency, in pricing models and the way we buy these things. And, you know, really kind of more cohesion between how these channels are managed, to your point how the teams that you know, kind of support these channels collaborate. So I think we're gonna see a shift from point solutions to platforms, and that's going to create a lot of consolidation in the space, it's going to be pretty interesting to watch.
Ben Kaplan 26:19
According to Margo Kahn rose, as retail marketing evolves, and shoppable media gains traction. The challenges faced by traditional publishers and the changing landscape of advertising technology, are shaping the future of digital blinds between top of funnel advertising and bottom funnel calls to action are blurring. And the loss of third party cookies is forcing publishers to adapt or be left behind as marketers and CMOS. Let's keep our finger on the pulse of these transformations, and proactively seek out innovative solutions. Margo says by staying in tune with the shift from point solutions to platforms, we can ride the wave of consolidation in the ad tech space and seize new opportunities for growth. What's the result? A marketing organisation that thrives in the face of change? One that's ready to excel in the dynamic world of digital advertising. For top CMO, I'm Ben Kaplan.
Tom Cain 27:23
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