Ep. 115- SEPHORA! What is RETAIL MEDIA? With Head of Sephora Media Network – Marco Steinsieck

Foreign.

Welcome to do this, not that, the podcast for marketers. You'll walk away from each episode with actionable tips you can test immediately.

You'll hear from the best minds in marketing who will share tactics, quick wins and pitfalls to avoid. Also dig into life, pop culture and the chaos that is our everyday. I'm Jay Schwedelson. Let's do this, not that.

We are back for a special episode of do this, not that. And I have an amazing guest. This is one of my good buddies, Marco Steinsk, who is the head of retail media for Sephora.

Sephora's retail media network is called the Sephora Media Network. And I think my 16 year old daughter is probably most excited about this episode because other than living in my home, I think she lives in Sephora.

I would say the most. But Marco is one of the smartest guys I know in the entire marketing world, especially in the retail media space.

And that's what we're going to dig into today because it is just the hidden gem of the entire marketing universe. So Marco, welcome to do this, not that.

Thank you so much for having me, Jay. I appreciate the warm intro.

This is going to be fun. So before we get into the world of retail media, maybe you could tell everybody who is Marco? What's your origin story? How did you wind up here?

Sure. So let's see, where to begin? We actually I've been doing retail media for a long time, since before it was called retail media.

And one of my first partners was a little company called World Data.

I was working at vistaprint and I was in a business unit within strategic partnerships where we were cross selling and upselling small businesses on products that we didn't sell but we felt like a small business would need. So I'm starting a business. I need to get my legal documents together. I need Legal Zoom or I need Pitney Bows or I need a square reader to transact.

And so we worked with you guys. I don't know if you remember, but this was probably 15 years ago and that's retail media.

And so that's how I started cut my teeth in E commerce at vistaprint, which was a great sort of E commerce, a B testing and optimization engine type company. I went on to work at DraftKings for a couple of years and then I went to be a part of what became Staples Media Network.

And then a couple years ago I moved over to Sephora I was the first dedicated employee for Sephora Media Network. And now we've, we've grown to be a substantial team, a substantial business. So that's a little bit about my story.

I live in, in Sudbury, outside of Boston. I have three young kids, weekends. That's the, that's the 32nd on me.

I love it. I love it.

And you know, the cool thing is, and I think what everyone's going to really get a lot out of is you've been, like you said, part of retail media. Before it was a thing and now it's a monster thing. And you're, you're a big player in that.

And the reason I really wanted to have you on is I don't think people understand what retail media is and how big of a part of the marketing world it is. So for everybody listening in, when I keep saying retail media, like, what is it?

Like how there are, like, are lots of websites, retail media businesses, what is retail media?

So I'll start with, with what it is from a retailer point of view. So, you know, retail, the business model is you buy it at wholesale, you mark it up, you sell it at retail. That's your product margin.

That's how you make money. Along comes Amazon and they introduce a whole new model where you have to pay to be on the platform.

And they're not passing on cost to customers in order to make money. The way that they make money is that they charge brands to reach their customers. On Amazon.com this grows into what becomes retail media.

So if I'm a brand and I'm selling on Amazon, I need to market through sponsored products or through display. And so Amazon is actually becoming a media company. So this puts, from a competitive standpoint, downward pressure on margins for everybody.

So, you know, Amazon is selling at the best prices. Customers flock to Amazon.com that gives them more media inventory, more eyeballs to sell on the site.

And all of that margin from the media goes back into traffic driving initiatives like, you know, marketing or price. So if I'm a company like Staples, I'm having pressure on that product margin and I need to find a way to replace that.

So retail media is a great option for retailers because the margin structure is super compelling. You know, if I get a million dollars from a brand, the vast majority of that goes to my bottom line. I have no cost of goods sold.

I don't have to sell a product in order to make a buck on selling clicks or eyeballs. So that's the sort of retailer perspective.

From a brand perspective, everybody's hearing about cookie deprecation and everything that's happening in the advertising space with privacy, retailers are sitting on a gold mine which is their relationships with their customers.

So for our brands, the way that we position retail media is that Sephora Media Network is empowering our brands with the digital media capabilities they need to reach our clients.

So if I want to reach, if I want to reach the Gen Z market and it's going to be increasingly difficult for me to do that through wall gardens like Google and Meta, et cetera.

With third party cookie deprecation, I go directly to a retailer who has relationships with these, with this market that I'm trying to reach and I launch a media campaign. And there's a bunch of different ways that you can do that. But that's sort of retail media in a nutshell.

Retailers are becoming, in a lot of ways, they're standing up media companies and this is not only changing retail, it's changing advertising more broadly.

So let me play like I'm a dummy for a second because I possibly am. When I go to, you know, Sephora or Walmart or Target or whatever the website go, I'm a regular person.

I go to the website and I see different promotions and logos and products being promoted right there in front of me.

All are some of those ads that are part of like someone doing a media buy through a retail media network of that retailer or is all of that just actual content that just there.

So some of those are ads.

So you know, I think at the end of the day, if I'm a client, if I'm used shopping on the site, I don't care if the retailer is collecting a cost per click or a cost per impression. I don't care if they're making money on some, you know, on the, on the JVP between the retailer and the brand.

What I care about is having a relevant product served to me. And so, you know, we view, I view retail media as something that can empower better client experiences through relevancy.

You know, one of the things that's great about it is that, you know, it's E commerce. We can, we can track, you know, how much is a user engaging with this product? Let's say it's in the spot.

If you search for makeup on Sephora or you search for paper on, on Staples, which products are you serving up and are these relevant to me? So we're tracking, you know, is it, is a customer engaging with this product?

Are they clicking on it, are they adding it to their cart Are they buying?

These are all really, really important signals that tell us primarily, is this product resonating with the client, but also is this driving a good advertising experience for the brand?

What's amazing about it is it's really turned retailers into publishers, right into advertising vehicles. And I don't think the regular person floating around the Internet realizes that retailers are actually media companies and that's only going to grow.

So I guess my big question is, can anybody advertise or run a media campaign on a retailer's site? Or is it only for mega brands?

So, you know, anybody can do this. And this industry is exploding and it's becoming, you know, something, you know, it's not really competing retailers within retailers.

This is becoming something where retail media, our big competitor as an industry is Google and Meta and the walled gardens, they're also really important partners for us. But if I'm a brand, if I'm an advertiser and I'm running a campaign on the open Internet, I need an audience to target to.

I don't want to just be, you know, spreading my message without any targeting on the open web. I need some an audience in order to drive performance. Retailers can provide those audiences. Retail media can provide that audience.

And the more, you know, these are becoming very sophisticated businesses with, you know, hundreds of data scientists that are building these audiences and measuring how they perform and optimizing them in real time. So, yeah, absolutely, anybody can run a retail media campaign.

And it's also not just sort of like open web display or, you know, it could be paid search. You can run retail media campaigns in Google through AdWords. You can run retail media campaigns on Meta through, you know, stories and whatever else.

You can run retail media campaigns in direct mail and email.

So if you're trying to get a list of clients, if you're, you know, you're a makeup brand, you're trying to get a list of clients to target to for an email campaign. Who better to talk to than a makeup beauty retailer? Or, you know, same thing for office products when we were at Staples.

So I think, you know, you're actually an expert in this. You've been doing this for a long time.

The channels might be a little different, but from an audience perspective, retail media is just another way to get a really compelling audience offer in front of an audience that's ready to transact because the retailer has that direct relationship with the end client.

Yeah.

And I would encourage everyone, you know, whatever category you're in, to look at the biggest retailers in your space and look for their media kits or the retail media networks, because when. When an individual, a buyer, goes to any retailer, website, they're in buying mode, okay?

So it's the best possible time to have your ad vehicle in front of that person because they're looking to spend some. So that's amazing. This is really, really helpful.

So let's get into the portion of this podcast, which is ridiculous, it's called, since you didn't ask. So, Marco, you mentioned that you got a bunch of little kids. You have like 14 kids now. I think you have three. And so here's my big question to you.

What.

What is. What TV show are your kids watching that you actually like watching? Like, what is the best kids show right now?

I feel like you're an authority on this topic.

So we do, we do TV time. Five to six every night. You know, people. People might judge. Everybody's got their own perspectives on screen time.

You know, it's a really good question. I don't. I don't know which one I like.

Which one do you dislike the most?

Any of them, to be honest.

Are you like a pig type guy?

I've got two 7 year olds and I'm a 4 year old, so I gotta find something that everybody likes. There's a lot of paw patrol going on right now. Oh, yeah. Oh yeah. There's a lot of PJ masks going on. We like, we like movies too.

So there's a lot of, you know, Disney movies. Moana was huge for us for a while. Then obviously our frozen phase where everybody's, you know, my son's dressed up as Elsa.

So no, you know, I'd say I like the movies. I haven't found a show of theirs that I particularly like.

Now when you go, will you actually go, like, will you go to, like, kung fu. Is that what it is? Kung Fu Panda 4. Will you be at the theater seeing that?

We went to Frozen two. That was. I think that's the only movie that we've been to in the theater, which we went to it twice. They loved it.

They.

They really like the Kung Fu Panda. I think we watched the first two. I didn't even know there was a third.

So there's a fourth coming out. What's wrong with you?

I gotta catch up. I gotta watch the third. And maybe we'll go to the. We'll go to the theater for number four.

Oh, my God. I couldn't take it. It's just too much. I used to watch Peppa Pig. That was pretty solid. You know, I think the pig had a British accent. I don't know.

I was into. I was always afraid my kid would then wind up with a British accent. But there's a couple world.

There's a world. You probably know this, but there's a Pepper world over in England.

Oh, I didn't know that. That's amazing.

Yeah, pepper's huge. We definitely went through a Pepper phase here.

Oh, that's good. I'm happy you're out of that phase. Well, this has been incredibly helpful to everybody. Listen, everybody needs to go and follow Marco.

We're going to put his LinkedIn in the show. Notes. Super smart dude. Always sharing great stuff. Marco, anything else? How else should people get in contact with you or is LinkedIn the best place?

LinkedIn is great. And yeah, I would encourage folks that are not familiar with retail media to get familiar. This thing is growing really quickly.

You know, Amazon has been the big player, but there's now, I feel like every month there's another 10 retail media networks popping up. So, you know, I'm super passionate about this industry.

I feel like it has the potential, like I said, to not only disrupt how retail is done and, you know, provide savings and better experiences for clients, but also disrupt the entire advertising industry. So thank you, Jay. Thanks for having me. Love the work that you guys do here.

Appreciate that, man. All right, awesome having you on. Thanks everyone for checking it out. We'll see you next time. You did it. You made it to the end. Nice.

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