Have we finally reached peak retail media, or is the recent explosion of RMNs the sign of a healthy and thriving marketplace?
“It’s the right question to be asking, especially at this time,” says Daniel Folkman, SVP of business at Gopuff, an on-demand delivery service that promises orders in as fast as 15 minutes.
The fact that so many retailers are investing in ads clearly demonstrates the “power in building a media business that’s directly tied to a retail business,” he says.
Folkman helped spearhead the launch of Gopuff’s ad platform in 2021 through partnerships with third-party ad partners like Publicis-owned CitrusAd, which helped with off-site placements. But in July, Gopuff decided to take its ad platform in-house and end some of those relationships, including with CitrusAd, a decision directly related to that question about “peak retail media.”
Most retailers are new to the advertising business, so when they’re first starting out it’s easier, more efficient and more cost effective to build on top of existing platforms. It’s also a good learning experience, Folkman says.
“[But] the more we spent time with our advertisers and the more we thought about what makes Gopuff different in the market,” he says, “we realized how important it was that we took control of our ad capabilities.”
In other words, retail media networks need a way to stand out from the rather large and still growing crowd. Gopuff’s new in-house ad platform, for example, uses custom-built AI and machine learning models to crunch its first-party customer data.
“We’re at an interesting point where we validated the need or interest for this from an advertiser perspective,” Folkman says. Shareholders, meanwhile, are happy because media is a high-margin business that’s good for the bottom line.
But that doesn’t mean there’s room for everyone.
“I don’t believe it’s sustainable for us to have hundreds of retail media networks,” Folkman says. “I don’t see a world where a junior media buyer is going to spend their time going down a list of 200 different networks.”
Also in this episode: Gopuff’s private-label product strategy, the company’s quest for profitability (hello, advertising business), why Gopuff is called Gopuff and the weirdest product that Folkman ever personally summoned using the service.
