‘The Missing Piece’ is an ongoing Retail Media Age series in which we speak to retail and commerce media platforms to find out what they see as the biggest challenges facing the ecosystem – and how they’re tackling them.
In this instalment, Paul Dahill, Managing Director, Sales EMEA at Koddi, talks about why retail media has the potential to make a real difference to the consumer and why there’s never been a better time to launch a retail media network; why the company is doubling down on infrastructure with the advent of agentic AI; and how retail media players can make the most of innovations like agentic without neglecting the basics.
What is it that excites you most about the retail media industry today?
The thing that excites me is still the potential. I believe there’s a mindset shift that the media world still needs to get its head around: that retail media is not a new channel. Instead, it has the potential to be an entirely new way of investing media, and one that covers multiple channels.
It’s fairly well-understood that there are three elements that encompass retail or commerce media: one, the media itself; two, the first-party data that businesses are sitting on; and three, the ability to combine those things at the point of sale.
The ability for retail media and commerce media businesses to create a richer picture of the consumer based on the touchpoints throughout that funnel – I still think that is very interesting to this day.
And finally, when this is done well, there’s a value exchange with stronger outcomes for advertisers – meaning that they can actually see the direct impact of their advertising in terms of that sale.
But the argument that I’ve been making throughout my career in retail media – which is clocking in at around 15 years – is that retail media can also make a huge difference for the consumer. This might come in the form of free shipping; it might be a more generous returns policy. Those things cost money for retailers, and a good way of funding those things that mean something to us as consumers is via methods like retail media.
What do you see as the biggest challenges currently facing retail media?
Especially during this moment where we’ve seen so much hockey stick growth and creation of new retail media and commerce media organisations, the biggest challenge is how to create long-term sustainable commerce media businesses – and how to create them when the macro environment shifts.
A lot of that is getting the foundations in place – making sure it’s understood how these businesses are funded, what the expectations are, and putting the right infrastructure in place. If output is doubling on top of flimsy foundations, that can be a problem later.
But another way we think about solving some of these challenges is making sure that your go-to-market is tailored. A cookie-cutter approach isn’t going to work; so, what makes your organisation different?
It’s important to make sure that your technology vendor is aligned with that and is meeting you where you are.
How does Koddi’s technology set out to tackle these challenges and to ‘meet businesses where they are’, as you phrased it?
Ultimately, it comes down to not simply being a set of APIs but rather building a team around the organisation.
We’re less interested in simply being a technology solution and more interested in helping to build sustainable long-term businesses. That red ribbon really runs through our customer base. You’ve really got to get into the weeds in order to understand: how can we help this business?
One of our big focuses is life cycle support. Some businesses begin working with Koddi when they’re already in the tens of millions; other businesses might be close to zero, perhaps they’ve had a fairly basic pilot.
How you support each of those businesses is clearly a little different. So, what does go-to-market look like? How might you approach packaging up your value proposition? What advice might a partner like Koddi be able to give you around internal alignment?
Finally, bringing in advertiser demand is a huge one. Businesses will often find that they have a fairly stable set of, say, 20% of advertisers who are already spending with them. So, how can they get those advertisers to spend more?
Or it might be, how do we tap into those 80% who aren’t spending? How do we tap into different pots of budget; how do we operate more like a media business?
Arguably, that’s been a major driver of the development of Koddi’s SSP project, where we’ve partnered with businesses like Wolt – a sister company of Deliveroo and part of US quick commerce company DoorDash. In May, we announced that we were partnering with them to give brands and agencies direct access to Wolt’s inventory through programmatic channels.
For Wolt, it’s about how Koddi can help to remove friction from those buys so that they can tap into incremental demand from media agencies or a different budget that is not necessarily destined for a Q-commerce business. And that makes sense for Wolt; but it may not make sense for a different type of client with a very different advertiser base.
Based on your experience in the retail media space, do you see these challenges improving? Are things trending in a positive direction?
My personal view is that there’s never been a better time to launch a commerce media network.
The reason I say this is that many of the real challenges on the operational side – the resource commitments you might need to make – have now become easier thanks to advances in agentic tools.
For instance, how efficient teams can be when running ad operations; how efficient they can be in getting quick responses to why a campaign might not be behaving as expected. ‘My data is disorganised; it’s in a mess’ – there are now tools that can help to resolve some of that.
Those things are the type of obstacles that have prevented organisations from launching at all or from scaling as they should do; and technology is really helping to address them.
What’s coming up in the next few years for Koddi – and for the wider retail media industry?
Connecting this up to my last answer, Koddi recently released a report into The State of Agentic Commerce, surveying consumers and businesses across the US, the UK, and Germany, which found that the budgets for investing in agentic AI are already there.
A third (33%) of the advertisers we spoke to are planning to invest $50-249K (or £ or € equivalent) in agentic products over the next 12 months, while 29% are preparing to invest $250-999K, and one in five want to invest $1-5 million. These aren’t tentative budgets.
What our role will be in this is that data needs to be made easily accessible to these AI systems. If someone is saying, ‘What’s the right product that I should be thinking about?’, if your data is not set up in a way that means the AI tool can quickly get a response – you’re going to be ignored. So, you need to have the kind of infrastructure that means your system will be included in the consideration set.
It might seem a little dull to be focusing on infrastructure! However, I believe this will be a game changer for many organisations as we move forward.
Do you think that much of the industry is in the right position to support advances like agentic AI – or should retail media business focus more on solving the basics first?
I’d say it’s about tailoring the approach to each partner’s individual circumstances. If they still haven’t resolved some of those organisational elements; if their go-to-market isn’t right; perhaps there are core relevancy problems with their sponsored listings; then you’ve got to focus on those fundamentals before you get distracted with some of these other elements.
With that said, on the operational side, it’s often the case that partners will email their vendor with a question, and then naturally, it takes time to get a response – maybe an hour, maybe a full day. And then they might have a follow-up question, which can take up another day.
That’s the operational world that we’ve worked in for some time. Now, though, Koddi has an embedded AI experience called Auggie, which allows a partner to ask questions such as, ‘What are the top 5 things I should be looking at that aren’t behaving as expected? Why do you think these are, and what would be the recommended resolutions?’
And they would receive an instant response. It also doesn’t stop at surfacing recommendations – subject to human approval, it can take action on them, moving from analysis and insight directly into execution.
So, is that something that’s distracting from a business that’s still growing up?
I don’t think so; I think that’s something you need to get hold of straight away because it makes a huge difference to an organisation’s responsiveness at the backend and frees up their time to think about the more strategic parts of their roles.
