Unlocking value for DTC brands in digital marketplaces

In this episode, Adam chats with John, Founder & CEO of Momentum Commerce, on helping DTC brands unlock value on digital marketplaces. John dissects how brands can win with digital shelf analytics and succeed long term.

John and Adam cover what the table stakes are for brands to be on Amazon and how they can leverage Amazon to launch new products and build brand offence.

This episode is sponosred by D1 Brands.

Tweetables

[15:13] As a major shift, [and you've seen something similar start to take shape on Amazon, where increasingly,] the search results on Amazon's platform are sponsored and instead of organic, and that changes the way brands participate. I always remind our brand clients that even though those attacks and that's expensive and that cost is increasing every year, it's also giving brands the ability to control the shopping experience and assert, their strategy in a way that's much more controlled than just allowing those portals free reign to prioritize products as they see fit. So there's often an opportunity if you can organize around it, effectively.

[16:09] To do Amazon marketing at the highest level requires a lot of the same things that, ~~you know,~~ the OG search geeks like me ~~kind of~~ figured out 10, 12 years ago, ~~it's, you know,~~ it's not a game of budget optimization. It's a game of profit maximization. ~~It's a game of profit maximization.~~ So you need to ~~sort of~~ set efficiency targets and then fund the advertising indefinitely against, goals.

[17:04] You want to use technology to make these decisions, you know, to apply mathematical decisions to how you buy ads is a game much better played by computers than by humans, but you need a really smart humans who know how those systems work and can control them to get the best outcome.

[17:51] it sometimes makes a lot of sense to lose money on advertising on Amazon, early in a product's life cycle in order to gain organic visibility and reap profits later. So you've got a slightly different time horizon on marketing investment, and that time warp is something a lot of brands struggle with and it's very unique to Amazon.

[20:26] And we find that there's so much information you can extract by looking in real time at what's happening on the retailers that can drive better marketing decisions, better product innovation decisions, better pricing decisions, that that information is critical.

[24:37] if you're making a marketing decision, you always want to think about the the trade off between efficiency and scale and be strategic about that, But it was only a couple of months ago that Amazon began to reveal impression share data to give you a sense of how much of the market you're missing.

Transcript

Adam — Welcome everyone to Growth Sessions, where we chat with industry leaders in retail media, and e-commerce advertising. I'm here today, joined by John Shea President and Founder of Momentum Commerce. John, thanks so much for being here.

John — Thank you, Adam. Pleasure. Pleasure to be here with you and really excited for this conversation.

Adam — Yeah, definitely. And Momentum Commerce is a relatively new agency. Do you want to give a brief introduction on what Momentum Commerce.

John — I would, I love the opportunity. Thanks. Yeah, so Momentum Commerce is a group of 16 of us. Now, we just formed a business and launched it publicly in April of this year. So it's a newly formed company, but all of us are sort of veterans of performance marketing, retail e-commerce and data center. The core thesis for the business is that amazing technology and brilliant people working together can unlock outsized value for clients.

We specifically focus on providing data services, strategy consulting, and tactical execution for mid cap to large brands who want to win at digital retail. So we think of digital retail as amazon.com. walmart.com, target.com and also emerging platforms like Instacart, that enabled different shopping experiences, and, that's us.

Adam — And you've been off to a great start. And while Momentum Commerce is a relatively new agency, your journey into this space has been many, many years in the making. Do you mind just giving everyone a little bit of a background of how you've grown into this space and, and all of all of your war stories and what you've seen thus far?

John — Yeah. I don't know. I don't know how much time we have Adam, but I'll give the quick cliff notes and, and it's fun, you know, I think the Momentum Commerce is a collection of some of my favorite colleagues and friends that I've met through this industry over the last 15 years.

But I started in this business 16 years ago, working at Google where I led some business development efforts with advertising agencies who are plugging into Google's APIs to try to buy search ads in more effective ways. Primarily leveraging math to make better marketing decisions, and I did that for about six years.

I fell in love with technology. I fell in love with direct marketing, and most of those agencies were quite sophisticated. And so the clients that gravitated to working with them were retailers and e-commerce companies. And so a lot of my focus was on that form of advertising, and then after working at Google for a long time, I went to a company called Criteo, which many of your listeners may know. It's a public company, initially very well known as a leader in dynamic product retargeting, specifically for retailers. So the shopping ads that follow you around the internet reminding you of what was in your shopping cart. And at Criteo, I built out a large commercial organization to scale to a hundred person team, to bring Criteo's retargeting technology to the middle market, in the Americas.

I loved that experience, kind of was on the frontline of programmatic display advertising for performance goals. That solution worked over Facebook as well, so I sort of saw the evolution of social marketing, where Facebook had an exchange where you could run a lot of math against it and then closed its ecosystem and changed it.

And so it was fun to sort of be on the frontline of search at Google and the front line of display and programmatic at Criteo. About three years ago, I left Criteo to join a company called Teikmetrics, which is focused on the marketplace space, where I was the CRO and helped build out some sales services and marketing teams, really fell in love with the Amazon ecosystem and the opportunity that exists in retail media, and have continued that focus in founding and building Momentum Commerce.

Adam — Awesome. Great. It's a great journey, and one of the things that I think everyone knows is when Amazon ads first started, they looked a lot like Google ads. They were paid search ads, bottom of funnel, highly intent-based. And obviously both Google ads when they initially started and Amazon ads have grown a significant amount. And I think you have a unique perspective on seeing the maturation of how Google ads have grown and how Amazon ads have grown and, and while there are some similarities, as you know, there are some differences. And, how have you found Amazon following Google's playbook in that respect?

John — Yeah, it's a, it's a fun question and topic, and there's so many moments I've had over the past few years where I just say to myself, man, I've seen this play before. I just watched this all happen. You know, I can remember working at Google, this probably would have been 10 or 12 years ago, and Google had initially got all of the retailers in the world to give them programmatically that our product catalogs and feeds with a product called Froogle. It's a directory of basically all products in the world and it was a free shopping portal. So if you are a retailer 12 years ago and operating a.com website, About 15 to 20% of all of your sales came from free organic search clicks within Froogle database.

And I remember being at Google and having to go tell customers that was migrating to what is now Google shopping, which is a hundred percent a pay to play environment, where the only way to meet that consumer and pull them into your website would be to pay a cost-per-click to Google. As a major shift, and you've seen something similar start to take shape on Amazon, where increasingly, the search results on Amazon's platform are sponsored and instead of organic, and that changes the way brands participate.

I always remind our brand clients that even though those attacks and that's expensive and that cost is increasing every year, it's also giving brands the ability to control the shopping experience and assert, their strategy in a way that's much more controlled than just allowing those portals free reign to prioritize products as they see fit.

So there's often an opportunity if you can organize around it, effectively.

But yes, it's sort of fun. Like a lot of the, to do Amazon marketing at the highest level requires a lot of the same things that, you know, the OG search geeks like me kind of figured out 10, 12 years ago, it's, you know, it's not a game of budget optimization. It's a game of profit maximization. So you need to sort of set efficiency targets and then fund the advertising indefinitely against, goals. I know, that's something perpetuate believes a lot into, in building a software, It's not a reality that all brands get to live, but, you know, philosophically that's the way to do it.

There's a huge difference between branded search traffic and non-branded search traffic and how you pursue that. You know, you want to do smart things like incorporate your staff levels and your margins into how you bid for and buy ads. You want to think about seasonality effectively and data in and out of seasonality.

You want to use technology to make these decisions, you know, to apply mathematical decisions to how you buy ads is a game much better played by computers than by humans, but you need a really smart humans who know how those systems work and can control them to get the best outcome. All of those things are sort of classic, uh, lessons learned in search and programmatic advertising that are true in marketplaces, but there are differences too.

The biggest one is that, you know, advertising in an environment like Amazon's marketplace has a causal effect on your organic visibility within the platform as well. And that requires some tricky, funky math that you can't always get a great read on, but you know, it sometimes makes a lot of sense to lose money on advertising on Amazon, early in a product's life cycle in order to gain organic visibility and reap profits later.

So you've got a slightly different time horizon on marketing investment, and that time warp is something a lot of brands struggle with and it's very unique to Amazon. It's also just like, the Amazon marketplace is so brutally competitive and dynamic, it changes constantly. So you have these crazy swings and you know, who you're actually selling against on that platform.

And unlike a Google or a Facebook, both provide amazing audience planning tools to marketers that data just isn't really available on Amazon. So marketers need to go gather their own insights and find competitive advantage by understanding what's actually happening on the retailer sites. So I love this ecosystem it's early, which means there's a great opportunity to get competitive advantage if you're a brand, it's a great opportunity to produce value if you're a technology player like Perpetua or a consultancy, like Momentum Commerce, and it's a lot of fun. It's changing every day.

Adam — I'm having fun. It sounds like you're having.

John — I love it. I love it. I love meeting great people in this industry like yourself, Adam.

So, um, that's, that's probably my favorite part of it.

Adam — I appreciate that. What, what are some of those insights that someone can extract outside of the Amazon platform as an example that that's not readily available via the API that a brand needs to know to compliment their advertising.

John — Yes. So I'll answer your question, I may shamelessly plug some stuff we're working on at Momentum Commerce

Adam — Please do.

John — So there's this concept that's an exist existed in Consumer Goods forever, which is called walking the store, you know, where, if you're a brand marketer at a CPG company, you'd go into the retailer, the retailer storefronts, and actually look at where your product is presented. What's next to it. How it looks. How it's priced relative to the competition and all of those kinds of things. If you really want to win in a dynamic marketplace online, you've got to basically do the same thing, but on steroids, leveraging the power of technology and scale and speed. And so you need to understand everything that surrounds your product digitally. This is often called digital shelf analytics, for example. And we find that there's so much information you can extract by looking in real time at what's happening on the retailers that can drive better marketing decisions, better product innovation decisions, better pricing decisions, that that information is critical.

And so we've decided we at Momentum Commerce, unlike a lot of consultancies, we invested really aggressively in data science and engineering. So we've got an incredible team focused on that. Jay, our CTO is a good friend of mine, he built the data science organization at Criteo years ago, is a really really strong technology leader. And we decided to invest there and building insights and creating actionable insights, which is kind of the piece that we thought was missing from this whole ecosystem. There's lots of great tools to help optimize tactics. There are some tools to distill general market share insights. But to get to real actionable value, you need flexible data that can be joined up against your own sales data and first party data.

So we built our own insights database and created a few tools that are kind of interesting. One of them is publicly available on our website, it's called the Momentum Commerce Amazon Brand Index, could be accessed at momentumcommerce.com and then just click on the global map and go to Amazon brand index.

But what we do there is we track 3,500 different sub categories of retail on Amazon in real time, updated weekly. And for every sub category, we reveal the keywords that are driving purchase demand, and then we plot the brands that are performing best against those search terms. And we run it as a plot looking at share of paid search, and share of organic search. And you can see the leaders in any of these categories are participating aggressively in sponsored search, as well as earning strong organic placement. The challenger brands may not yet have organic placement, but they're coming in hot and heavy using tools like Perpetua and crushing it from an advertising standpoint.

And then you see some incumbent brands that may be winning on brand equity or price, but aren't really controlling the channel and participating in those, we call incumbents and then you have laggards that aren't quite there yet. So we track that and report that out, and that's helpful to get a competitive view.

And then we have some proprietary tools to support our customers that help understand categories they can expand into and build new products for, that are going to have less competition and high overlap with their customer file. And we have tools, that'll look at, um, other competitive benchmarking components.

So those are some of the things that we're doing from an insights planning standpoint, and, and are excited to continue to create tools in that way.

Adam — That Brand Index Tool sounds like brand analytics plus share of voice data on steroids and plotted in some nice visualizations. That's, did I kind of get it right.

John — You got the spirit of it man. That's the idea. Awesome feedback from it. We've got a few academic institutions wanting to do partnerships to study. You know, where it gets real interesting is looking at all of that digital shelf data and then thinking about where there are causal relationships between changes and then downstream sales and market share. And so we want to do some work in that area, which is exciting, but the, the goal is to provide clients better, a better understanding of where they sit relative to the competition and the size of opportunity.

One of the things, thinking about like with Google, Amazon differences, like one of the wildest things about Amazon was you couldn't really look at the investment curve like, like if you're making a marketing decision, you always want to think about the the trade off between efficiency and scale and be strategic about that. But it was only a couple of months ago that Amazon began to reveal impression share data to give you a sense of how much of the market you're missing. And that data is still a little wonkie and not great. And so you've got to, there's a lot of ways where you've got to use techniques outside of Amazon's tools to understand how to get a competitive advantage, and we spend a lot of time doing that stuff.

Adam — And so. What, if you could mention a client, that would be amazing, but totally cool if you can't, what, what would be like a specific insights that you would understand through some of these tools that you would then take an action on and what would be that specific action?

John — Yeah, sure. Yeah, happy to mention some clients. So, you know, we have a client in and we work with you on it, Adam, which is a good one, and mention a few areas of value that we chase for this client. So there's a client called Lux Paper. It's an amazing brand, They get, their direct to consumer site is envelopes.com, the brand on Amazon is Lux Paper, paper goods company. You know, probably 15, 16,000 different products. You want an envelope in any color, in any size, in any quantity they've got you covered, amazing selection, but a really complicated catalog, long tail kind of brand, you know, that's where marketing on Amazon gets incredibly challenging.

There's so much complexity in the data. There's a lot of sparsity in the data and that's where a company like Momentum Commerce, we excel. We invest in sort of hardcore data geeks and analysts and that's the type of client we love to work on.

For them, we're trying to help them with a few things, like part of it is working together to understand their economics. So as a brand, they can sell on Amazon, using FBA, they can fulfill directly themselves when they fill directly themselves, that could try to be prime eligible or not, and those all come with different profitability implications. So working with them to understand their profitability across 16,000 skews and multiple different fulfillment methods, it's kind of critical to getting them to a place where they can begin to market more aggressively, so we've spent a lot of time doing that.

Those aren't necessarily relying on insights too, but we've also invested in a data layer where we can ingest all their data and sort of run that math and help them from a financial standpoint. Then where you have insights that can be really valuable is trying to use Amazon data to advise on assortment strategy and product innovation.

What are, what are products that they don't sell, but their competitors are selling and being successful on that they should go sell. Where are there areas where there's increasing demand in search, and not necessarily good selection to match it. And how can they take data from Amazon and apply it to their product development roadmap.

So we consult with them on that, and then once they create those products, we can then market and advertise them aggressively. That's where, like I see a lot of brands who are getting really smart and sophisticated about unlocking data from platforms like Amazon and using it to plug directly into product development, and I love that, that's really fun strategic work for a company like us.

And then when you plug in that far up the value chain, it's really satisfying to then be the firm that helps market those products and make sure that they're successful long-term as well.

Adam — Definitely. And that's also kind of solves the problem that many brands are asking themselves of what should be on DDC, what should be retail and what should be on Amazon, where it's not an either or it's, how can they all play together nicely and to lead to brand managers?

John — Bingo! So Adam, let me ask you then. So I get this question all the time, particularly from brands that aren't natively born on Amazon. It's like what, what, how much of their assortment should go on Amazon? Most of my friends, like you that live within this ecosystem, say you've got to put all of your products on Amazon a hundred percent of the time. If it's not there, you're silly. Um, how do you answer that question with clients?

Adam — To be honest, I think it depends on the category. So, if there are certain categories that you live in, like emerging CPG, supplements, household goods, baby, pet and some instances toy, you have to be on Amazon. Period, full stop. And you have to be on Amazon full suite of product collection on Amazon trying to maximize as many sales as possible.

If it's someone like another brand that we're quite familiar with Crocs, that is relatively inventory constraint, that stock is meteorically rising, and people, they can't, they literally can't keep shoes on the shelf. How can you use Amazon to use your brand as offense? How can you use Amazon to introduce new products to your brand? And how can you use Amazon to, in some instances, I hate this, like unload inventory that you're unable to sell on your DTC. That's where it gets a little bit more interesting and a little bit more strategic, which is, I think, why agencies like yourself need to exist is, you know, when, when it's not table stakes for the category that you live in, there needs to be a very nuanced strategy on a brand by brand basis. And while we don't necessarily touch DTC, we don't touch Omni-channel or we touch other digital retailers, we get exposed to those discussions, but we're not necessarily leading them. And that's when we rely on agency partners like yourself, to really guide brands in those sorts of discussions.

John — Dude. Totally agree. I like that perspective a lot too, because it's not, most people who are deep in the Amazon ecosystem don't always see all the nuance there. I completely agree with you. And, Crocs is an awesome example. That brand is on fire and they do so many cool fashion collaborations and things.

And that sort of short hit kind of product things that are really more exclusive meant for PR that doesn't play on Amazon well.

Adam — Yeah, if only I could get the Diplo Crocs on Amazon. Would love that. Um, but that definitely helps for the brand. John, you worked at building go-to-market teams at some leading technology companies in this space and then a light switch hit you last summer-ish, in which you decided, hey, I want to start an agency. What was it? What did you see that you thought, how did you think that Momentum Commerce could succeed? What was the gap that you were filling in the market? And what ultimately led you to make this leap.

John — Yeah, so, you know, it wasn't like a, one afternoon I woke up and was like, I'm going to go, and then we're going to go do this.

This is something, this is an itch I've always had, I've always wanted the scratch, I've always been afraid to do it. And I think there's a lot of people in the world like that, that have a dream and their nets not quite brave enough or confident enough to go attack it. And think that was me for a long time.

Think I'd been lucky enough to work for great companies, work under great leaders and learn a lot. Felt kind of like I was at the right point where I'd sort of been around the block and knew some things that I could create some value and have more confidence in myself. So that was helpful. You know, we had all been trapped in our houses for a year, you know, it was, I was definitely just re-thinking life and priorities, you know, there's a personal component to all of it. And, you know, kind of made you realize that life is precious and short. And if there's things you want to do, you gotta go chase them. And, and, you know, interestingly had a lot of great friends. Who are super talented that I've met through this business and industry that were feeling the exact same way.

So it was kind of a perfect time to get a crew together, to go do something big and take a swing at life. So that was a big part of it. You know, I think the other part of it was, you know, I had spent my whole career working in e-commerce advertising basically, and all of a sudden, you just saw the biggest acceleration in this particular field happened, you know, within a span of six months. So it was amazing business opportunity to help support all these DTC brands that need to figure out marketplaces, help all these old school, you know, brick and mortar brands figure out digital, you know, that opportunity just got bigger and bigger. And then the last piece was like, kind of leaning into the future of the workplace and sort of realizing that, you know, what it means to be a company is not having an office it's so much different than that.

And there's so many possibilities and opportunities to gather talent and bring people together, and we, you know, I think we all learned a ton about that in the last year. So, you know, there's all these things coming together and then I'd worked directly in this market, loved it, and just thought there was something missing, which is it's, it's an early market. Amazon's ecosystem is the most mature of the different retail media platforms, and it's still really early. And like the right solution has to be flexible technology and understanding of the different tools that are out there, paired with really smart people that are senior, that have been around the block, trying to create value for brands.

And, you know, I thought there was an opportunity to do that. And our mission that we talk about internally as a company is just to be the most respected company in this field. We don't, we don't want to be the biggest. We just, we just want to be respected. We want to lead with thought leadership, have a people first culture and do great work.

And so far it's been a great journey. We're still we're it's early. So we'll see how it goes, but that's the, that's the story.

Adam And part of that respect is, has really been established with some of the content that you and your team have been writing. I've really enjoyed it. I've read almost every piece there, some amazing cartoons and graphics to correspond with the pieces.

But generally speaking, I would characterize it as long form thought leadership pieces that are not clickbaity, SEO, come sign up with my agency. It's almost indifferent. Momentum Commerce isn't leading the charge, it's more so the topic that's leading the charge. Can you talk a bit about how you and your team thought about coming up with that content strategy to introduce the agency?

John — Yeah. And Adam, I super appreciate you saying that and I love getting it, the occasional texts from you when you read some of that, that feedback is so cool for us.

Adam — I've stolen. I've stolen some quotes as well. I want you to know that.

John — That's all right. I've stolen quotes from you for three years now. So we're, that's a fair trade in my book, Adam, but yeah, so, keep in mind, a lot of us at this company have been advising brands on marketing strategy for like 15 years. And this is kind of like our first time to fully control and own a brand. We were pretty excited to be marketers for ourself.

And I think what we decided is that it was just going to be a thought leadership strategy. We wanted to put value out into the ecosystem. We do that through, through writing right now, and we do that in creating utilities, like the one I mentioned earlier. We're going to continue to sort of create free tools to sort of share some of what we learn with the market.

We also, I hired this guy, he's amazing, he's the cartoonist for the website adexchanger.com. His name's Nate Neil, he's the most talented artists that I think I've ever worked with is amazing.

Adam — He's done an amazing job.

John — Yeah, he does these illustrations and I sent him an idea. He doesn't work in this business. You know, I send him an idea, kind of explaining some trend that's going on around Amazon or retail media. And he comes back with these amazing ideas for how to express it and these simple cartoons. And so I just respect that art form so much. I want to continue to lead into it and it makes for fun, you know, sales and client presentations instead of, breaking up the monotony of your typical PowerPoint deck. It's, you know, kind of a fun cartoon, it's sort of aligned to our brand, which you know, is sort of rooted in being kind and human and nice, but, but also knowing what we're talking about and being really good at what we do. So we're having fun with that.

None of us are sort of professional marketers who are all kind of working on it together. But, you know, the, the thing that we feel strongly about is not using copied writers to write stuff for us. We like our team writes all the content themselves and sort of building a culture where there's a sense of pride if you can write content that we post on our blog. And I think there's something fun about that for us.

Adam — What's been the proudest piece that you or someone on your team have written thusfar?

John — You know, I think for me, it's been fun to watch different skillsets within our company come to life there.

So, Patrick Callahan is our director of client development works mostly in sales and business development. You know, this is a complicated industry like retail media. Like even you and I work in this stuff every single day and it changing constantly. And, you know, the plumbing of this industry is just, it's hard to keep track of what retailers are using, what tech platforms to sell, what ad types to what brands, and you know, for me to see him, who's somebody I've worked with across three companies now is sort of been the, the most impressive business development individual I've ever seen in any organization, never knew he was a great writer.

He wrote a summary of like, what is going on in retail media? How are all these retailers trying to sell ads to brands using what technologies? And it was great to discover a new skill set that he had that I didn't know he had. And that's actually been like the most read article from our blog. The other thing that we love is is having a really amazing data science and engineering team.

And now having a pretty good data lake to query, you know, those guys are applying interesting metrics that Amazon data to help reveal patterns. And so they did, you know, some interesting analysis to take an economic principle that the Gini coefficient, which scores generally that the distribution of income in a population and apply it to share a voice on Amazon on Prime Day, to look at categories that would have been easier or harder to win on Amazon.

So seeing, you know, folks on our data science team want to write articles and share with the world is, is a fun thing to watch too.

Adam — Nice. And you mentioned this data science team. You have a CTO, 16 people at the agency. It's a fairly new agency, not many typical agency teams look like that. Have that makeup. If I'm playing the, I'm a big basketball guy, you know, the GM of the momentum commerce team, and you're picking players to fit what positions. You got your 16 person team. I'd love to know how that team is structured across business development, client management, data and technology. And how you thought about forming that team when you were starting the agency.

John — Um, yeah. So, you know, we sort of arrived at an organizational design that I like quite a bit that I think will scale nicely. But we didn't necessarily get there with having that plan in mind. We got there by just working out where there happened to be a group of very talented people that all wanted to do this together.

So, I'm lucky in that we've got a gentleman named David Kennedy who leads our client services practice. So that's mostly like tactical execution on behalf of clients, media services work. David, I've known David for 15 years. He was a client of mine when I was at Google 15 years ago, he was one of the most sophisticated guys buying search ads for big retailers.

So he's built agency services teams at multiple agencies. He built the in-house marketing team at REI, just an amazing guy, incredibly smart, very data-driven, super fun to be around and work with. So he oversees client service delivery. If a brand hires us to run retail media for them, it's his group who's in charge of that day in and day out.

And he's always worked at places that understand that technology plus people working together is the key to success. We then have a retail strategy group, it's led by Ryan laugher, who's our VP of strategy. Ryan and I worked together at Criteo, and then again at Teikametrics where he built the service organization. He is just your classic retail analyst nerd, loves getting into strategy. He does a lot of work to do due diligence for our private equity partners, assortment planning, channel strategy, consults for brands.

You know, one of the things we noticed is that it's not just about media execution. If you don't have the right strategy, the right data together, and how you approach Amazon for supply chain screwed up the media doesn't matter. So that's a retail strategy group that kind of helps solve some of those problems.

Then we have Molly Doe who leads our client development. So that's sales and marketing and, and ongoing customer satisfaction.

She's dynamite. She's worked in e-commerce her whole career, and it's just a great leader. And then we've got Jay, our CTO and he's got a whole crew of ndata scientists, engineers that have worked for him across companies. And so, it's just, happened to be some of my favorite people, all had slightly different skill sets that were really complimentary and just decided to go kind of big and getting a real leadership team together early on.

And then we've sort of hired in a ton of just amazing experience talent here. It's a lot easier to hire great people when you have great leaders in place already. So that was kind of our approach to go to market.

Adam — And then, so you have the John Shea dream too. You've assembled the starting five yourself and these four pillars of Momentum Commerce. How do you get your first client? How do you get your next ten? Like, what was that process like in setting up the agency, huge cost base already. You're investing a significant amount in data and technology, unlike other agencies. So, what brought in that initial rolodex of clients and how have you found success in client development since then?

John — Yeah. So, you know, the first thing is like, when you started investment in this business, so we didn't want to just boot, bootstrap something small. We wanted to do this right. And saw a huge opportunity in the market to approach it that way. So we're very comfortable kind of making the heavy approach upfront.

As far as like meeting clients, you know, one of the advantages of hiring a senior team, like all of us have been doing this for a long time, we all have relationships and clients that we've worked with that trust us that know we can do good works has been pretty easy just to sort of talk to good friends who are on the client side that we've worked with, before. You know, so it's easy to kind of, you know, get in the door with some conversations.

And I think what I'm finding is in the retail media space, a lot of brands are frustrated with holding company agencies. They are excited about folks that are super data-driven, that are scrappy and hungry and they want to partner with a firm that's specialized, but also they like the idea of this is a new company that's building tools, building services, and going on a journey together.

Those are the right clients for us. In some cases, clients want something more sort of cookie cutter and then we're not a great fit for them. But we've been able to build just great partnerships. We have awesome clients that believe in us and want to support our growth and have already sort of referred additional clients to us.

So we think that's going to work long-term and that's sort of what we've done so far.

Adam — Amazing. Once you start to get referrals from your existing customers, you know, you're doing something right.

John — Yeah. That's right. Yeah that's I think that's the best sign of success in business.

Adam — Yep. Okay. And so then if we then dive into that subject for, if I'm a large brand working with a large agency that isn't Momentum Commerce. What do you, what do you think those agencies are getting wrong and that you are uniquely getting, right? That allows you to differentiate and allows you to get these wins?

John — You know, I don't want to say anybody's getting anything wrong.

Adam — I think you're too nice of a guy, John. You're way too nice of a guy.

John — The things that we believe in that the things that we believe in that I don't think all other shops out there do is, you know, on the client service side, I think the prevailing model that agencies use generally, as you've got sort of an account director, who's like your senior person who's been around, manages the client relationship and the communication with the client. And then you've got your worker bees who might be a little bit more behind the scenes who are actually in the platforms, pulling the levers and from a cost standpoint, like it makes sense that you can scale that model and extract more margin that way.

We don't think that creates the best result. We believe deeply that the people working on the accounts, who are pouring over the data every day, pulling the levers, driving execution for claims. Need to also be the person that's talking to the client every day. And that so much gets lost in that translation of the hierarchy there.

So for us, our, you know, the retail media management side of our business, like our retail media analysts are the ones who are doing the work all day. Accessing the raw data in our databases, making decisions, and also the ones leading the communication. It's hard to hire that profile.

You need somebody who's really good at data analysis, really analytical, math driven, but is also great at client communication. And it's hard to find people that have both of those skill sets, but we believe deeply that that approach is better than, you know, the person who's great at client communications be a different person than the one doing the work.

So I think that's a big difference. I think another big difference is, you know, you gotta, you gotta have your technology to do this at the highest level for us, that's been an investment in insights to make better decisions and you need an understand technology. If you use a platform like a Perpetua, you gotta know how that platform works, how it makes decisions, so you can overlay good human decision making on top of that. And I think, you know, some agencies may not be as accustomed to building and working with technology and machine learning techniques and so forth. And so I think that's an area where we add a decent amount of value for our clients.

And then, you know, there's different stuff around pricing, incentives and how, agencies and clients should come together on that, that we have strong views on, but we want to earn our keep with clients and sort of be performance oriented in how we work with clients.

Adam — And, and you don't just charge a media only given that you do offer a wide variety of services. Momentum commerce can offer consulting on a project based basis, media services. Are there other offerings that Momentum Commerce has and models that you all you operate with your clients?

John — Uh, yeah. So our most common kind of path is, you know, we get called in by sort of a senior person on the brand side to do a strategy audits, sort of like an operational review of what they're doing and in retail media specifically, or maybe in a channel like Amazon specifically, and, you know, that's a paid engagement. We do a really robust piece of analysis there. I would say we're better at like hardcore data analysis and insights, and we are at strategy recommendations.

So, so we're really good to kind of score card out with data, how well they're doing and what size of opportunity is across different levers and drivers in a business. And then, you know, generally what we tell customers is like, you know, rebate the cost of that work. If you want to hire us on an ongoing basis to go fix some of these things.

And that may be media execution, that may be product innovation consulting using Amazon data to figure out new products that you want to come to market with that may be, um, pricing looking at sort of how you can change your promotional or pricing strategy to extract better margins, surfaces like that.

Adam — Very cool. Um, John, you alluded to this space. I think we're wrapping up. Unless, did I talk, do we not touch on anything that you wanted to talk about?

John — This is awesome.

Adam — All right. So we like to end these with a prediction, the space is moving so fast. What's John's prediction for the next year? What will happen in the next year that you believe, others should know about?

John — Um, let's just clarify the question out of what what's my prediction. Something that will happen in the next 365 days in relation to retail media in general?

Adam — Yeah. Yeah. You got it.

John — I think you're going to see a ridiculous amount of M & A

Adam — If not, we've seen a lot of M&A in the past.

John — Yeah, yeah. Look at who I'm talking to.

Adam — Yeah. We've seen, we've seen a lot of M&A in the past little bit.

John — Yeah. I think that's going to accelerate. I think you're ...

Adam — Who's going to be acquiring who.

John — Yeah. I'm friends with all the players here, so I gotta be careful on what I say.

Adam — Okay. You don't need to name companies, but what types of companies would acquire, what other types of companies?

John — I think you're going to continue to see this smashing of, you know, advertising oriented companies and insights oriented companies. Right. And so, you know, like the insights layer, it's got to tie into the activation layer. And so I think you're seeing some of that happening and there's a lot of software companies that focus on e-commerce insights and there's a lot of software companies that focus on you know, e-commerce advertising. I think those are natural fits for one another. So I think you'll see more of that activity. You've already seen quite a bit of it.

I think you're going to see, you know, the area that I'm interested to watch the most is, you know, we love buying ads for demonstrable lift on Amazon's platform.

When you get out of Amazon, these platforms are just so early and just, you know, it's, they're real clunky and you can't really use some of the mathematical techniques that we like using to drive return. I want to see more innovation there. I want to see new companies enter that space and help retailers do a better job of building ad technology.

There's some cool companies that I think are up and coming in that area. I think we'll see more from them. And then I think you could see consolidation in terms of companies like, Criteo's offering or, you know, Microsoft has promote IQ. Those are very similar companies, Publicis just bought Citrusad and, I think you'll see more in terms of change on that layer.

And then you've got all the mobile apps, like Instacart or UberEats or door dash and all these guys, Gopuff, you know, they're going to kind of crash into this ecosystem and you'll see a lot of activity there too. So it's an exciting time to be in this industry.

Adam — Yeah. I think that M&A that I'm most looking forward to are who are those now first party retail platforms going to acquire or partner to accelerate their offering.

We saw Walmart partner with the Trade Desk for their future programmatic and connected TV offering. What's next for let's say, if Instacart by way of advertising revenue in GMV is number three what's Instacart's plugin. They've already hired everyone from Amazon. So, what, who's Instacart gonna acquire? How are they going to move up the funnel through either acquisition build or partner? Um, I think that's something that I'm really interested in, but there'll be a lot, lot will happen in the next little bit.

John — Yeah, it's fun. It's a fun ecosystem to be in, and there's just great people working on this industry.

So I always love meeting new people and appreciate the opportunity to do this with you today, Adam,

Adam — For sure. Thank you so much, John.