Pacvue is an ad-buying platform for sponsored listings and retail search results that sits right at the heart of open programmatic retail media.
Pacvue is one of a small handful of companies, alongside the likes of Skai, Omnicom-owned Flywheel Digital, Criteo and The Trade Desk, that are broadly integrated by retail media networks.
The original value proposition for third-party retail media ad tech was (is) the ability for a retailer to expand its supply to far more bidders. A grocer might carry Heinz, for example, and thus show sponsored Heinz placements for any relevant condiment-related search. But that impression is going to be worth more if other DSPs with their own brand and agency relationships all submit bids, too.
For brands, the appeal is obvious.
Programmatic opens up a “multi-retailer proposition,” as Pacvue’s CRO Ross McNab put it to AdExchanger. McNab recently joined the company after C-level sales stints at Vistar Media as CRO and Cardlytics as CBO.
Big CPG brands like Mars, Coca-Cola and L’Oreal are carried by scores of assorted retailers with their own retail media businesses.
But in partnership with a cross-retailer programmatic vendor, brands can more effectively shift spend if a product is out of stock in one location, for instance, or target a chain location where a competitor is out of stock. And advertisers can also be more “resilient to disruption,” McNab said, because retailers themselves are still changing their RMN policies, not to mention switching out the brands on their shelves.
This, however, was retail media 1.0. Increasingly, more is required of retail media ad tech.
That’s not to say that sponsored listings isn’t still Pacvue’s main business for Pacvue, McNab said. But moving forward, the big opportunity is to be the vendor that “solves broader problems and is a more strategic partner across all of their commerce needs,” he said.
Commerce needs
Yet what does it mean, exactly, for a third-party programmatic vendor to tackle the broader commerce needs of its retail media clientele?
Well, for one, retail media buyers might want inventory that a true open programmatic company couldn’t supply.
Take The Trade Desk. It can’t buy TikTok or Snapchat ads for you. Those are walled gardens that don’t support programmatic bidders or provide log files. However, an advertiser using the Walmart Connect DSP, which is on TTD’s infrastructure, can buy TikTok and Snapchat ads via a particular partner program that packages Walmart audiences on those social networks.
And, wouldn’t you know it, Pacvue just this week announced its first social platform integration with TikTok. Now, Pacvue can manage TikTok Shop merchant accounts, as well as TikTok ad campaigns.
Most people don’t go to TikTok with specific intent to buy, McNab said, but it’s become a major product discovery hub nevertheless.
“There’s a lot of value to add as more consumers start and, frankly, end their shopping journey in those social environments,” he said.
Other general commerce needs include inventory forecasting for supply chains – physical supply chains, not the programmatic variety – and being able to maintain their own product display pages. When Omnicom acquired Flywheel for $835 million in 2023, Flywheel’s archive information about product display page details and metadata attached to product descriptions was touted by Omnicom as a source of differentiated ecommerce data companies compared to many legacy retail agencies.
Flywheel can’t close the loop on purchases like Amazon, of course, but it does see what’s working or not across display pages in general.
Pacvue leveled up in this regard, McNab said, when it was acquired by PE-backed ecommerce software and data platform Assembly in 2021, which has also bought other ecommerce data services. Some, like Amazon seller specialist Helium 10, also had a focus on advertising.
But other of Assembly’s acquisitions were companies that manage data feeds or do DTC inventory analytics.
It’s telling that in 2023, two years after buying Pacvue, Assembly rebranded as Pacvue, packing most of its business under that umbrella.
The price equation
One of the most important changes since Assembly became Pacvue – and put all of its ecommerce sales and advertising tech services behind the ad tech brand – is that Pacvue has begun adjusting the price for certain advertisers in some instances.
For Amazon sellers, this kind of elastic pricing and promotional spend has always been part of the platform. In retail media, however, the ad budget isn’t the thing that matters. It’s about sales.
This dynamic is best symbolized by the metrics ROAS and ACOS. For Google, say, or most ad tech, for that matter, advertisers measure campaigns by “return on ad spend.” All the focus is on the advertising budget. But Amazon popularized “advertising as a cost of sale,” which measures the impact of advertising as just one lever in the overall cost of a sale.
That may sound like semantics, but the metric one uses makes a big difference on those platforms.
Amazon’s ranking system doesn’t just consider the ad bid and basic relevancy. It also considers whether a product is commonly returned or poorly reviewed and how efficiently an item is warehoused. It considers whether the item in question is priced lower elsewhere on the web and the weight and size of the packaging the item will ship in. It looks at whether the product is food that melts or might turn bad in heat.
These and many other considerations are baked into Amazon’s ranking system. In fact, Amazon’s algo generally rewards a brand more for cutting $1 from the price tag on an item rather than spending a dollar more on ads.
In both cases, that seller gave up the dollar – but the lower price probably converts more often.
These types of calculations represent the next frontier for retail media advertisers and programmatic tech.
“You can start to see a world where commerce media actually gets considered as a cost of goods sold,” McNab said, “and as an always-on, obvious investment that the CMO and CFO can agree on because the return is so clear.”
