The reason why the media programs often times do not scale is that there's too much friction between the retail side of the business and the media side of the business. So how does this go? Well, those running retail media, sponsored products, they understand that in order to make more money, we need more space for inventory. So, basically get those additional placements from the other side of the business that is responsible for personalization and delivering a sleek user experience. But those people are incentivized by delivering the highest possible click-through rate and they know sponsored products don't work as well. So why would they give away something that goes at the expense of their own target? So the one side cares about the media revenue. The other side cares about relevancy, click-through rates and they both have a fight and they make no progress. As a result, the retail media business stays small and just doesn't grow. I just had a meeting with the company and they solved the problem in a very simple way. They said - there is a single target, both work for market across the two businesses, they have shared OKRs. So all of a sudden, the one guy who is responsible, who previously was responsible for CTR now all of a sudden says - well, I might be better off with sponsored products bringing in a ton of revenue, we have to make them relevant. And all of a sudden, there are two sides of the business that collaborate and this is where the magic happens. Sometimes it can be so simple.
