Retail media vs UX: who wins?

TRAILER

Konstantin: Retail media is a revenue source.

Neha: Is it improving the user experience?

Jugal: Relevancy helps the user.

Neha: Where do you draw the line between relevant and creepy?

Konstantin: It's ultimately the consumer decides.

EPISODE

Neha: Welcome to Points of Growth, the podcast where we explore the ideas and technologies shaping modern advertising. Today, we're diving into retail media and outcome-based marketing. Two forces redefining how brands connect with consumers in the ever-changing digital landscape.

Joining me are Konstantin von Wedel, Strategy Director at Platformance, a company pioneering performance-driven media in the MENA region, and Jugal Limbachiya, Chief Product Officer at Yango Ads. Hi, guys.

Konstantin: Hello.

Jugal: Hello.

Neha: Welcome! Welcome! This is my favorite question every time I start off this podcast. Let's start with introductions. So tell me about yourselves.

Konstantin: I'm Konstantin, Strategy Director at Platformance. I've spent quite a few years here in the region helping advertisers transition essentially into more measurable outcome-driven campaigns. My background is primarily in programmatic media, and now we're working across the whole breadth of advertising and marketing in the Middle East.

Jugal: I'm Jugal. I lead product and innovations at Yango Ads, mainly focusing on helping advertisers use data and AI to achieve tangible results. My background is mostly in the online ad ecosystem and e-commerce. And happy to be here!

Neha: Both of you sound like the perfect candidates for this conversation. Could you possibly speak a little bit about your retail media products? What exactly distinguishes you from other ad tech players?

Konstantin: We're quite new in the marketplace. We've been around for just about three years. And Platformans as an ad tech platform is built around a really simple idea that advertisers should pay for the outcomes, not the media required to drive the outcome. And at the moment, when we speak about outcome-based marketing, there's really three layers to it. The first and most important layer is that of business outcomes, new customers, revenue, and profit.

And when we can drive one of those three things directly, we charge our clients based on that. The second layer, where direct sales can't be measured, is what we call conversion outcomes.

So the kind of inputs which are required to then acquire new customers, drive revenue, or increase profitability, leads, installs, or other actions across a website or an app. And then lastly, the third layer is what we call brand outcomes. And that's really about helping drive long-term brand growth through product and category awareness, favorability, and purchase intent. And it goes without saying that AI plays a major role in this. It powers a lot of how we build our products. But then increasingly, we're also able to implement it in the front end through conversational tools that simplify what is actually a very complex landscape from campaign planning to reporting and insights.

Neha: I love how you said complex and then it came to reporting.

Konstantin: The bane of everyone's life!

Jugal: So at Yango, we don't see retail media as just an advertising layer. We see it as a precision growth engine. So what really sets it apart is that we are building this platform from the ground up around the commerce outcomes, identity clarity, and full funnel measurability. Most ad tech solutions retrofit advertising onto retail. We went the opposite way. We built a first party identity that lets us connect behaviors across on-site, off-site and in-store journeys, which means we can tell brands not just that, you know, they reach X number of people, but they sold a precision number of incremental units because of a specific campaign. We also took a very holistic approach to the media surfaces themselves. Instead of limiting retailers to a handful set of ad inventory or advertising formats, we have built a unified system that's spawning out across on-site ads, off-site programmatic, in-store screens, and advanced audience, which revolves around data monetization tools, all living within one transparent enterprise-grade console. And perhaps the most distinctive part of our philosophy is transparency and attribution model, which are not a black box. Like we have given both retailers and advertisers control, clarity, measurement, commercial uplift.

Neha: I want to know what's uniquely challenging about the MENA market?

Konstantin: The Middle East, or MENA more generally as a region, is at the end of the day, very young population on average, social first, and of course, very mobile heavy users. You've got a high degree of internet penetration or the market. But at the end of the day, of course, it's also very fragmented. MENA is not just one whole market. You can't view it as one monolithic block. Saudi Arabia, yes, they speak the same language as the UAE, but it's a different dialect, it's nuances, which are hard to capture, and which a lot of brands don't necessarily always consider. So whether you're talking about the language, whether you're talking about creative messaging, whether you're also talking about more hard facts around purchasing power and an ability to actually consume. With the fact that a lot of people are spending their time on social platforms, there's been a tendency for advertisers and brands to also invest a lot in walled gardens and to primarily focus on those. And that, of course, is the big challenge for players in what you would call the open web or outside of those walled gardens to really gain market share and then so I guess it's the last thing which i always talk about because i came here from germany so very much so european work mentality is there's definitely the source of like need it now culture this idea that things should have been done yesterday there's really a lot of optimism and a lot of desire for innovation but obviously there's also a little bit of a demand for that innovation to happen overnight, and not necessarily always the willingness to invest in the process and the people that are required to get there.

Jugal: MENA is one of the most exciting but also one of the most complex regions for retail media, because fundamentals here vary compared to the global countries or Western markets, where only a few dominant players, omni-channel retailers or beat online marketplaces dominate the landscape whereas in MENA it's a blend of regional chains hypermarket quick commerce marketplaces cross-border ecosystem so there is a lot of variety involved all operating with the different levels of digital maturity so that's key here. That fragmentation means no single product template works everywhere. So demand for each retailer or online marketplaces are different in terms of retail media business. Also, the data maturity is equally uneven. Some of the retailers have world-class loyalty penetration while others are still catching up. The divide between online and offline shoppers creates attribution blind spots the key important thing here is that the consumer base is extremely diverse over 100+ nationalities and different age groups other important aspect here is that offline sales still dominates many markets in the mena region which forces to build identities teaching around omni channel measurement and which is far more complex than just building identity into the online space. Apart from that, retailers expect one key KPI is time to market. Like they instantly want to go live with their advertising solution and start making money. Just to sum up, like MENA, you are essentially building retail media for 2030 while the ecosystem is still catching up from 2020. And that's what makes this region so energizing.

Neha: Just coming back to your point, Konstantin, that the need-it-now culture, clients do want that innovation overnight, but it requires some kind of investment that needs to be sustainable, right? And it takes time, it takes resources, et cetera.

Konstantin: Absolutely. We can really agree that this need-it-now mentality is pervasive, whether we are talking about retailers and their demands, but also about ultimately the consumers. And it's really the consumers who are driving forward a lot of these changes, right? I think the whole rise of quick commerce has put a lot of retailers under immense pressure and immense need to invest in the infrastructure.

perspective. And then I think what Jagal was referencing and what we're seeing a lot in the region is that there's such a diversity in the way that people shop. Offline is still big in particular markets. Offline is still really important for particular segments of the population, for example, local Emiratis here in the UAE. And then you have to balance that with the desire for some younger people to want to do everything online and get quick delivery, you know, within the hour.

Neha: What pain points did you build your retail media products to solve?

Konstantin: We primarily focused on breaking down the barriers for brands, whether they are endemic brands who list their products and sell via those retailer platforms, or you're a non-endemic brand who just wants to tap into the very rich data which is available within the retailer ecosystem, which can be used and joined up with ads to target high intent purchases. I would maybe even slightly disagree with what Jagar mentioned there earlier, in the sense that I actually think there's a concentration in the retail media space with a few key players. So the likes of Amazon and Noon here in the UAE, and then some select other players across the region. A lot of advertisers forget about or find it very hard to operationalize retail media. So essentially running ads within retailer platforms across the long tail, across the tier two and tier three retailers. And we're not just talking about e-commerce platforms, we're talking about online pharmacies, ride hailing apps, quick commerce players. Many of these are up and coming, and a lot of brands want to be present, want to be available to them, but find it hard to have to deal with all of these retailers, all of these platforms individually. And that's when, of course, the entire idea of having a one-stop platform really can help solve that, right? It helps provide one unified reporting hub so that you can instantly see what is working and what is not working and shift budgets accordingly. Because a lot of retail media is quite static. And there I'll definitely build upon Jagal's point, which is building on the infrastructure of 2020, which is to say that it's not as dynamic as a lot of other areas of digital media and digital advertising are. Then, of course, there's also a degree to which, what are we doing for retailers? And the thing is, a lot of retailers are rushing into monetizing their inventory and building up their own retail media portfolio. But it's hard for them to justify that investment into the tech and processes required without the demand being there. And so what we are really is an incremental demand partner for a lot of these retailers, so that they can really essentially justify those investments.

Jugal: I'll explain it in a bit different way. We created Retail Media Platform because of struggles with some foundational issues which are still prevalent in the market, like poor measurement, fragmented identity, operational friction, limited inventory, and most importantly, the opaque economics. Traditionally, retail media in the region was built around basic KPI reporting capabilities and not the advanced or more meaningful reporting where advertisers can gain a lot of insights into their audience behavior or SQ performance. So those things were missing. Apart from that, like a touch point across the entire flywheel, which is on site, off site, in store, that was missing. Identity fragmentation was another major pain point, especially with the incomplete loyalty data or, you know, kind of investor heavily in the first. So that is missing. We invested heavily in the first party identity graph that unifies the profiles reliably and respectfully. We also tried to automate most of the touch points of campaign execution so that it can be launched very speedily. We also expanded the media inventory capabilities because nowadays if you see the online marketplaces, they're very dynamic about the media formats they launch. Apart from that, the non-conventional mode of advertising we are also trying to build like sampling units or digital out of home, open internet advertising with better measurement capabilities. And finally, we made transparency as a core design principle. Brands can see everything like supply sources, cost structures, which builds the trust among the various stakeholders using this platform. On the retailer side, we created white label SaaS model that gives them visibility into the business growth and performance as well.

Neha: So I have a bone to pick with what you said about the ad formats. One of the e-commerce players like slaps on a video and you cannot turn off the volume if you're in public and you're not wearing earphones everyone's gonna hear what you're watching it's annoying the problem is that it's uh it's like it's cheaper than the other platforms so i gotta find a way to be like okay am i willing to spend a little bit more money for silence or do i want to deal with.

Jugal: Yeah, I think it's a basic design gap. Otherwise, as per the IAB standards or, you know, any kind of video ads inventory to be launched, the mute button is mandatory.

Konstantin: And I also think you're not supposed to have autoplay with sound.

Neha: That's what I thought.

Jugal: By default, it should be mute.

Neha: Speaking of user experience. So everyone calls retail media user centric, right? But is it actually improving the user experience or is it just advertiser efficiency?

Konstantin: The way we view it, retail media is ultimately a revenue source for retailer and retailer platforms. And then ultimately it's also for advertisers and particularly historically, it's mostly been for the endemic brands who sell within those platforms. So the FMCG's of this world, the food and beverage brands, they're the ones who really, really want to use this media channel to reach out to consumers. So it's primarily designed with them in mind. And that's, of course, why you sometimes have these examples of formats or user experiences which are not in line with the best practice. But if you think about where retail media can really help and assist users to if used well, if done well, if implemented correctly by retailers can be extremely relevant to users. Because at the end of the day, the prevalent ads that you see within retail environments are product listing, sponsored listings, things like that, taking the principles of search and applying that to retailer platforms. And so if you're able to bring out relatively relevant products to the consumer, essentially matching what the consumer is seeing with that intent or helping them, that's ultimately going to be quite a good thing. So I think if you define user experience a little bit more broadly, retail media can be extremely beneficial for shoppers.

Jugal: More or less, I agree with Konstantin. When we talk about user experience, one part is accessing the retailer or online marketplace application. That's where retail media or ad experience can be a bit more intrusive or counterintuitive to user experience. But the other part of the user experience is the service experience. When online marketplaces or retailers start to make a lot of significant incremental revenue in the advertising space, that revenue can be used in subsidizing the pricing of the SKUs they are selling on the platform or improvement of service capabilities for the users. That way, both of the aspects of user experience works differently with the usage or introduction of the retail media application or into the business. Retail media isn't automatically user-centric, but it becomes user-centric only when the app design is handled in a very disciplined way. The way I look at it is very simple. Relevancy helps the user because they try to maximize the advertiser efficiency, campaign efficiency and all those KPIs which intervene or influence the user experience. So there is always constant struggle between those two. The gold standard is when the sponsor product ads that feel like, you know, something shopper actually wants so relevance can improve the user centricity in terms of ad as well but if let's say there are ads which are completely different than what they're looking for so that impacts negative way so what is the best way here we use contextual and behavioral signals not to bombard the users but to reduce friction replenishment queues, direct filters and price sensitive insights. So that means reducing the clutter, prioritizing the relevance and seamlessly adding formats fluidity across the user experience layers. When done right, retail media enhances both user experience and advertiser efficiency so that balance is maintained. And that's the idea of the best retail media platform to make these two things converge at some point in time.

Neha: Oh my god, you mentioned clutter and half these platforms are just, it's mind boggling sometimes how I get anything done. And I'm just like, oh, you're just throwing all this information at me. It's like throwing spaghetti at a wall and wondering if it's going to stick. But coming back to what Jugal said, creepy, I want to touch on that. So when it comes to targeting, where do you draw the line between relevant and creepy? And who's going to be enforcing this? Like, is there going to be someone just, you know, wagging their finger at you and be like, uh-uh, that's not okay?

Konstantin: The way I see it, it's ultimately the consumer who decides, right? If they feel they are being over-targeted, over-exposed to a particular kind of content, which is intrusive, either in terms of it just being too much or being hyper-targeted, hyper-personalized to the degree that it becomes a bit suspicious. I think consumers will ultimately leave and find another platform. And the way we view the market landscape is there are so many platforms out there and there's constantly new entrances here in the UAE. I think after a very successful launch in Saudi, Keita has now come in as a new quick commerce player, really biting into the market share of some of the established players like Careem,Talabat, and Deliveroo. And ultimately, they just provide a better experience for users. And part of that is also the targeting in terms of showing consumers or prospects the kind of ads that they feel is relevant for them. There's always, of course, this really hard line, you know, the person wagging their finger in some cases will be the regulator. Europe is really quite prominent. Here in the region, you know, there's certain laws, both in the UAE and Saudi are quite on the forefront of that as well, quite stringent privacy laws. They're going to set the ultimate boundary of what can be done, what can't be done.

But the nuance of what feels, oh, this is good, relevant content for me, I'm actually happy to see these ads, or at the very least, these ads don't bother me versus the, oh, this is far too invasive. That's really down to the individual level. You don't actually need to be creepy to be good. There's a tendency to hammer home this idea of hyper-personalization, of using personally identifiable information to target people. But actually, that's not necessarily what's going to incentivize, you know, consumers to actually convert to purchase. And you really are better off using some of the targeting that relies on aggregate, anonymized or pseudonymized behavior, which is tracked within the platform within the retailer app, and use that to target rather than private details like your ethnicity, or your name or things like that. The distinction is actually very intuitive.

Jugal: Users at a certain level expect that platform is collecting some meaningful data about us and they are okay with that. That improves their experience in terms of personalization, kind of a product they want to buy or of a purchase history they want the platforms to maintain. So in that way, that is kind of a set bar. But what level of personalization some platform should go, that decides the creepiness. So for an example, like when a user feels that his or her purchase history is understood, that's the boundary user wants to draw in terms of data sharing.

But when users start to feel that, you know, we have watched, that's when creepiness kicks in into the retail media ad experience. So I still feel that in terms of retail media, because it's mostly users' purchase history or users' journey on that particular platform. It's limited to that in terms of data collection or targeting capabilities. That is still a lot less creepy compared to what kind of ads surface to users on social media. Because in social media,because in social media they have much more holistic information about the users and the targeting capability and predictive modeling is next level you might have experienced this on some social media you might be thinking that i should buy this and similar ad appears in front of you so that's when you get scared that how do this platform know that i thought of buying this so those kind of a predictive modeling or overreaching targeting on futuristic expectation of the users all that experience makes it more creepy second thing is the design of a particular application so if a design not well balanced. So in that case also it becomes creepy. Enforcement happens across layers. So the first line of defense is the product itself. Product as in the retail media platform or the technology that drives this ad infrastructure. So we have to embed data minimization, frequency caps, creative rules and sensitive category guardrails into the system. The second is the retailer itself because retailers control the relationship between their digital apps and the consumers. They can set a boundary and build trust. And the third is the regulation like GDPR, CCPA and nowadays emerging MENA privacy laws. At Yango Ads, our simplest internal philosophy is if the personalization would surprise the user, we don't do it. Like we don't want to shock them. So that keeps us firmly on the side of relevance and never the intrusion.

Neha: You constantly hear people saying that, you know, I never searched for anything. And I was having a conversation with a friend and we were talking about a specific brand of coffee or whatever, and then you open up like your social media and then you're just getting targeted for like coffee. It's just like, ooh, creepy.

Konstantin: I think we've all felt we've been in that kind of a situation before, but I think there's two explanations for it. And, actually I should say also, I quite like the philosophy, which, Jugal, you mentioned, which you internalize at, at Yango. You shouldn't really be surprising the user. The fangs of this world, the Facebooks, TikToks and the like could probably take note of that, it would serve them well, but when you think about, oh, I'm surprised I've seen this, there's two explanations for that. One is that ultimately you might've seen an ad for the coffee brand before you were talking about it. You just weren't aware. And so it continues to show up and you just become aware of it.

Neha: Confirmation bias.

Konstantin: Exactly. The other one is what the social media platforms do very well is the extent to which the targeting is also based on the wi-fi that you log into and also the devices surrounding you so for example if you have a friend who really loves coffee and they tell you about their favorite coffee brand you might be showing that ad then because they tend to get those ads served on their device and i think that's less intuitive but also still makes sense of some kind of explanation that you know ultimately just as you are exchanging information with your friend when you're talking to them in person, the device is also exchanging information between each other because they're physically very close to each other.

Neha: Oh, yeah, that completely slipped my mind. I don't know why I didn't remember that considering this is literally the industry that I work in. Okay, last question. You've got Black Friday, you've got Christmas. How should advertisers be approaching this high stakes period?

Konstantin: Q4 is probably the biggest time for e-commerce, but it's not the only one. It's not even the only other important one. We've got Ramadan coming up as well early next year. There's really interesting stats out there for the Middle East that about one in three shoppers entered this quarter, which we're now in, were quite undecided about what they wanted to buy. And that's both online and offline, pretty much similar stats there. And that's to say that most people just come in knowing that they want to get a good deal, knowing that they want to buy something, but they're not specific about wanting to buy a particular kind of item in most cases. And if you look at some of the search terms and search volume for terms like discount, offer, deal, those are higher in Q4 than almost any other time of the year. And that's true across meaner markets, particularly pronounced in the UAE, slightly less pronounced in Saudi, but very much the case. I think you'll have a difference there in Ramadan is that there's certain categories which are historically very favourable or very much aligned with the Ramadan mentality. Lots of people use their time to think about buying a new car. It's obviously a big period for gifting. It's a big period for stocking up on household goods and things required for celebrations with Eid following on just after Ramadan. But outside of that, you probably also expect as a consumer to get some type of discount, and then you figure out when you go into the quarter, what discounts will be available.

So a very interesting data point is that something like 60% of all shoppers use shopping carts within retailer platforms as wishlists, they track prices, they add products to that cart before actually checking out before committing to actual purchase. And that's because they really essentially just want to see what's out there before they actually then click on the buy button. So what that really means for advertisers, well, that means you have to get in early because you need to make sure that you're mentally available to consumers early on so that when they start thinking about wanting to buy something and you've created a degree of desire that you're actually present and that people will start to associate a particular product or a particular category with you. The other thing is because discounts are expected, you have to use discounts. We always say it's important to use discounts a little bit smarter, which is to say you should use discounts to help move slow-moving stock. You should use discounts selectively, building up over time. You know, a lot of consumers expect discounts, but they don't have a particular number in mind. So really, when you're using discounts, you should be trying to incentivize those fence-sitters rather than unnecessarily bite into your own margins. The last thing is that as the quarter progresses, and again, it'll equally apply to Ramadan as we move closer into the actual Ramadan season, you move in terms of shift tactics from purely driving some product awareness and putting your brand name out there and try to establish a connection in the mind of consumers in terms of mental availability to actually driving conversions to tipping people over the fence and actually getting them to convert. And of course, retail media is where a lot of the purchasing actually happens. But even before that, it's really where you can identify purchase intent, because you can see that through a lot of the behavior that is tracked within the retail platforms, what consumers want to buy. And so that's why it's a really,really key channel, and will continue to be a key channel, not just this quarter, but also moving into Ramadan, and I think also beyond. And the last piece of advice that we always give advertisers in this space is to think about the mix, because obviously you can use really data-rich environments like retail media to capture consumer intent and then think about segmentation, think about then using targeting or using different user segments to actually reach out to consumers. which have historically caused awareness, up a funnel kind of tactics, things like an influencer marketing, things like big, rich video creatives.

Jugal: The Q4 period is particularly special for both advertisers, retailers, and consumers as well. So for consumers, it's a high intensity shopping season.They run very high on emotions that whatever we haven't shopped for entire year, that much shopping we'll do in this last quarter of the year at the same time same emotion runs with the advertiser as well that will accelerate our sales in Q4 so now they both need to match the expectation and that's how demand and supply will be synchronized Q4 isn't just a marketing quarter it's a momentum quarter so whosoever understands and taps onto this momentum will do a really good job. And that's where the advertising has to be very tactical rather than objective, which they do in the remaining year. So the advertisers treat Q4 as pure choreography. Choreography of demand building, intent warming or conversion capture. It's about spending with precision, agility and incapable timing where they can tap onto the consumer's emotions. So the advertisers who wait until the peak days arrive are always playing catch up because by then the market is flooded and the algorithms are still cold. The brands that truly win Q4 are the ones that start building momentum early. So they start the campaigns, the deals and everything early into the season. And when October establishes the strong share of voice, identifying high volume cohorts are feeding the systems clear signals. So the smartest advertisers think in a shopping mission like gift seekers, deal hunters, replenishers and tailor their SKUs, pricing, discounts and advertising campaigns all as a part of one common connected strategy in order to maximize their sales. They use price elasticity, stock positioning and affinity behaviors as a targeting signals. The key important point to excel for advertisers is that they need to work on a combined strategy of deals, free gifts, advertising campaigns, and their discounting and stock clearance strategies. When they harmonize everything together, retail media and advertising campaigns are part of that connected mission. That's when they succeed into the Q4 period.

Neha: Well, that was an eye-opening conversation. Thank you, Konstantin and Jugal. We explored how outcome-based marketing and retail media are reshaping advertising in MENA and how technology can bridge the gap between performance and empathy.

You've been listening to Points of Growth by Yango Ads. Stay tuned for more stories about the future of ad tech. Thanks, guys.