Growing Ecommerce – The Retail Growth Podcast
Feed your growth mindset. Ecommerce is growing, and so are the challenges and opportunities for online retailers. In the Growing Ecommerce podcast, Mike Ryan and other smec experts are joined by industry leaders in ecommerce, digital marketing, and data science. By sharing business trends, practical solutions, and best practices, this podcast helps online retailers solve the challenges of tomorrow.
Growing Ecommerce – The Retail Growth Podcast
Big exits & bold bets: Temu stops ads in US while OpenAI enters ecommerce. Plus, debating the marketwide pivot to profit.
We broke the news: Temu hit the brakes – hard. In this episode, Mike and Chris dig into
- Why Temu suddenly killed all ads in the US, and what happened next
- Signs that Temu's ad spend shifted to Europe
- OpenAI’s move into ecommerce, joining Amazon, Perplexity, and Microsoft in the AI shopping race
- Does Google’s silence might signal hesitation or confidence?
- A debate: how profit vs growth is now the defining tension in retail strategy
This one’s all about who’s advancing, who’s retreating, and who’s holding the line in a market full of shakeups.
Welcome to Growing E-Commerce. I'm your host, Mike Ryan.
Speaker 2:And here I am again. My name is Chris Mike. How are you doing?
Speaker 1:I'm doing okay. I've got a little bit of a cold, Chris.
Speaker 2:And it shows massive, massive commitment that we still do the podcast today, although in a slightly different setting, directly from our headquarters, ladies and gents, but I think the topics are as hot as ever and, mike, even 50% of yours are certainly enough.
Speaker 1:Thanks, mate. I appreciate it, and I was told by our producer this morning that my voice sounds like honey when I'm sick and, yeah, I could start smoking and drinking whiskey. So I think this will be the breakthrough episode mate.
Speaker 2:Yeah, my voice sounds like honey when I'm sick and, yeah, I could start smoking and drinking whiskey.
Speaker 1:I think this will be the breakthrough episode mate yeah, Based on your voice alone, we're going to top the charts, and speaking of topping the charts, I'm going to use that very awkward transition. We're going to talk today about Teemu's app rank and what happened when they turned off advertising in the US, why that came about and what happened. We're also going to have a look at OpenAI's new shopping feature within their ChatGPT search and we'll round it out with we promised to do a steel man, straw man section on first order profit optimization and profit optimization in general. Um and I have the honor of straw manning this, you know let's see where we land here but I'm looking forward to it.
Speaker 2:Honestly, I'm happy that you are a little bit under the water, because obviously I think I have a bit more chance today.
Speaker 1:Let's see how it goes, all right. So, without further ado, let's jump in. Let's jump in with the big tea.
Speaker 2:I want to start, mate, because I want to share again some roses and flowers with you, mate, and also shout out to our whole team, marketing team Because, ladies and gents, I don't know if you are aware of it, but Mike Ryan and Smart E-Commerce were basically breaking the news, this big news, that Timo stopped all their Google Shopping activities in the US, and this was big news, ladies and gents. Now, I think, mike, when did we share the news?
Speaker 1:Yeah, it's a couple of weeks ago now, and by the time this episode ships.
Speaker 2:It'll be. It's a little bit receding into the background, but still big. So, yeah, we got cited in more than 700 articles. Big media outlets were directly in contact with us, and I'm really talking about big media outlets. One very famous media outlet, cnbc, wrote about temo. Unfortunately they didn't quote us. But yeah, I mean this, this is live, uh. But yeah, ladies and gents, this was really big and we, we were proud and are still proud that we were the ones who didn't detect this first and broke the news. So, mike, shout out to you and the whole team behind you Really big Thanks.
Speaker 1:I appreciate it. I just want to, in turn, give a shout out to Joe from Marketplace Pulse Actually, I should reintroduce him because I think he sold Marketplace Pulse a bit ago. But I I think he sold Marketplace Pulse a bit ago. But I mentioned Joe time to time on this podcast and he was basically reaching out to me letting me know that Teamwood's app rank was dropping and it just went to obsessive minds. Good things come out of it. So it was crazy because I was looking into this. There's a lag in the auction data, this reporting lag. It's always about two days outdated. So it's funny because Financial Times Eleanor Alcott from the Financial Times had reached out to me on April 9th asking how's everything going with email and advertising? Have you seen anything? And I told her then everything's fine. But that day they were actually starting to wind down their advertising, but we couldn't know that yet. Um and so this story developed rapidly from there.
Speaker 2:And Mike, now, now the crazy news. I mean I don't know if we're not allowed to talk about it, please stop me right there, but TEMO itself reached out to you, right? Yeah?
Speaker 1:TEMO. Temo has reached out to me before, by the way, but but yeah's see, I'm going to call with them next week with a couple of senior people Serious people huh yeah from their PR departments and maybe I'm going to get a lecture. I don't know. I'm like Brad Pitt in Inglourious Bastards. They'll probably shoot me out. I've been shoot out before.
Speaker 2:So, ladies and gents, if the next episode is done on my own, you know what happened to mine, yeah, in case of my sudden disappearance or anything.
Speaker 1:It's weird they asked me to meet at this seemingly abandoned warehouse.
Speaker 2:Don't do it. I won't join as your bodyguard, okay.
Speaker 1:Presumably they're going to be opening up some more local inventory there and everything. It's their new warehouse. It hasn't opened yet. It's not abandoned. Everything's fine, chris.
Speaker 2:We'll keep you posted, ladies and gents. But now, all jokes aside, yeah, to the listeners I mean the ones who didn't read our articles or the articles where we got cited yeah, temo is basically has been shutting down uh, their google shopping ads activities in the us, probably the biggest market for temo which has, of course, a massive impact on not just Temo but, of course, the market place in the US in general. There's some data we will show you and, what's very important, ladies and gents, of course, the one big question which came up as part of this shutdown of the Google Ads activities in the US is okay, what is happening to the money which is basically now free? Yeah, and there were big discussions about is this relocated to other big markets? Europe was one of the potential primary markets for Timo, of course, so we'll also talk about this. But, mike, just to review the whole thing, maybe you can shed some light on how you came up with the news and what happened since.
Speaker 1:Yeah, sure, I mean. So this is something that I researched in the past. Last year I saw that Timu's. You know, a metric that I like to look at is the percentage of advertisers that are facing competition from Timu, and I've used this metric in the past to understand it as a proxy for Amazon's advertising spend, wishcom and it's a pretty robust metric and you know, I noticed that last year that that percentage was starting to drop and they actually most of 2024, they were winding or reducing, drawing back their advertising spend in Google Shopping in Europe, in the US as well. But what I discovered back then is that there is a very tight correlation, or there's a high degree of like, yeah, elasticity or responsiveness, between this metric, this proxy for their Google Shopping spend, and their app rank, and I don't want to say that that Google Shopping is solely responsible for these effects. And indeed they didn't just turn off their Google Shopping, they turned off all of their advertising in the US. But it seems that they tend to move the budgets across their channels to a degree in sync. So, anyway, when their app ranks started dropping, it was clear to me that their advertising was probably dropping, and you can see in this chart here the black line just for listeners. There's a black line showing their impression share, which is another auction metric that Google provides, and I've taken this across a bunch of advertising accounts in the US.
Speaker 1:Their impression share in the US fell off a cliff starting April 9th. Within three days, it had gone to zero. They had dropped out of Google Shopping Actions and at the same time, they were turning off other advertising channels as well, and about one day later their app rank started plummeting, and so these two things moved just in complete kind of harmony with each other, just with a one day lag. And you know, they were consistently in the top five of all free apps in the US. This is iOS or the iPhone store, and now, by the way, they're all the way out of the top 100. They've exited the top 100 after some weeks of having these ads turned off. So it shows you how dependent their app installs and their customer acquisition are. That's kind of a strategy of theirs. They're running Google Shopping Ads, yes, to generate purchases, but also to bring that traffic away from Google and into their own app environment.
Speaker 2:Yeah, and basically it speaks, William, to the learning question, how sustainable the current business model of TEMO is. And I think one thing we can all agree on is basically two things. They will probably relocate or reshift this budget to somewhere else because the war chest of TEMO is just I wouldn't call it unlimited, but we can agree on that it's big, they have big and deep pockets. And another thing is, like you said, the dependency on. So there is probably a very unhealthy share between organic direct growth and growth which is purely driven by probably unprofitable paid search driven conversions. So yeah, that's certainly a point.
Speaker 1:I've always been of the mind that their Google Shopping was not really working well for them, and I think we'll get to that again in a sec, but just to show you what happened next.
Speaker 2:This is very interesting.
Speaker 1:Yeah, I mean what everyone immediately. Everyone was speculating well, are they going to start shifting this advertising budget to Europe? And you know at the same time that their app rank collapsed in the US. They had a fluctuating app rank in Europe of like, yeah, between the the top, or like between 10 and 20 was their app rank. Typically there's a lot of weekly seasonality, which corresponds to, from what I can see, seasonality in their ad spend. But then, as soon as that shift happened, they popped up into the top five in europe. So, yeah, I mean it definitely suggests that they immediately shifted some budget over. The question is where, and I'm going to show you now for listeners. I've got a chart showing the daily percentage of advertisers facing Tmoo competition and they were for in the weeks preceding this change. They were very steadily around 60, 61% of advertisers face competition.
Speaker 2:This is like serious account level competition, yes, yes, and the number is very, very high.
Speaker 1:To put it in perspective places yeah, I mean the, the highest team who has ever been was in december of 2023, when 80 percent of advertisers face competition, and that's comparable to the amount of advertisers facing competition from amazon. Yes, that in perspective, and yeah, they brought that down over the course of advertisers facing competition from Amazon. Yes, put that in perspective and yeah, they brought that down over the course of 2024 to about 60%. It's been stable Then. When this change happened, it was interesting because it was actually a few days later we did see the percentage of advertisers climb up to about 70% and Google Shopping might be, which is crazy.
Speaker 2:I mean we're talking about 10 percentage points within what is it?
Speaker 1:A couple of days, yeah.
Speaker 2:Other retailers, I don't know. It takes months, maybe sometimes years, right, oh yeah, it's really crazy.
Speaker 1:Yeah, it is stunning because it doesn't look that tall on this chart exactly. But to face another 10 percent of advertisers is it's huge, um, but it's already at this, this very, very high level. So the incrementality has to be super negative for them oh yeah, oh yeah, and they and they, but what we see is that they this only lasted about a week and they seem we don't know this changes so dynamically.
Speaker 1:I told you that I have this call with financial times and a day later everything had changed. It can all change again, but we see that they spent about a week increasing spend on Google Shopping and then they returned to where they were. I think they have no appetite to increase on that channel. I think that channel doesn't perform that well for them, which I've talked about in the past. So that implies, since we saw that their app rank did increase very rapidly, basically coinciding with them turning off ads in the US, their European app rank increased and their shopping didn't go until a few days later. It seems that shopping was not responsible for that app rank movement. So it suggests that they shifted a lot of budget into probably on the Google side, maybe YouTube ads, but not so. Advertisers are worried about Google Shopping. Right now. There's nothing to worry about from T-Mobile besides the usual. Yeah.
Speaker 2:But it's really fun looking at this data because I mean, you notice, mike, we were working with the biggest retailers, online retailers in the world, so I know how tests of more aggressive. So this incrementality test what if I throw a couple of hundred grand on a daily basis into a channel? But to get a valid result because that's what we assume right, they tested for four or five days and they saw okay, this channel is not working for us if we spend another couple of millions and that's the power of big data If you're as big as Timo, you can basically probably get valid results and interpretations of testings within a couple of days. It's really crazy.
Speaker 1:I think they already had a pretty clear picture on Google Shopping from the past couple of years and this reeks to me almost more of desperation that they tried this. I mean, I think it was inevitable that they tried, but from what we can see, they just don't have the appetite right now or they can't do it. And I've always said that Europe is hardly a safe harbor for a company like Tmoo. Consumers are not that enthusiastic about it. Regulators, lawmakers, other retailers certainly not.
Speaker 2:So, yeah, I mean, we will keep the audience posted. Let's see, maybe there will be another test flight, which, by the way, is highly disruptive for online retailers, of course, because they really move the market. So, yeah, we have the data to keep you posted, ladies and gents, and yeah, we're looking forward to more insights next couple of weeks, to more insights in the next couple of weeks.
Speaker 1:Yeah, I'll definitely be keeping a poll or keep checking the polls on that and checking in, you know weekly and all that. But yeah, next on our agenda today, chris, also interesting one, for sure. We talked, boy, how many episodes we talked previously on this podcast about perplexity shopping.
Speaker 2:And we had a strong discussion about Google's. I don't know google's position as as one of the most successful companies in the world and how perplexity and and this, this new ai wave embedded into, I think, your search providers could, yeah, be a substantial risk to google and mike. We have some news here which probably is feeding into this argument, right.
Speaker 1:Yeah, for sure, and you know I'm sure everyone listening has heard about this by now. But OpenAI has followed a very similar strategy and they have. You know. They say that they are improving their improving ChatGPT search, including a better shopping experience, um, and, and that means that you can get this much more kind of rich, visual, image-based experience when they detect a shopping related query or I shouldn't say query, but yeah, I don't know what to call it conversation, chat and also the ability to check out like to to buy from there within your chat or within ChatGPT. So at this point now let's recap this. Chris Perplexi has a shopping tool like an AI shopping tool. Microsoft Copilot is doing some AI shopping. Amazon has an agentic shopping agent experience.
Speaker 2:I hate the word agentic.
Speaker 1:And I heard the word agentically the other day and I was like holy shit, it's too much. Yeah, agentically is.
Speaker 1:And now OpenAI is rolling itself too, so in fact, it's kind of everyone put Google, where's Google? And I mean, I think we talked about this before, but I've been personally asking that question for a couple of years now, and they have everything in place that they need for this. So I think it's going to come to the point soon that investors start asking this question out loud too, and Google is almost obligated to move at this point Almost obligated.
Speaker 2:Obligated, yes, but I mean my stance on it. Before we talk about the details of this new AI search enhancement. I mean, I don't know if you listened to the last earnings call of Google. I mean, google is doing so well still that I think they have time and I think they are really looking very, very closely at what is the best monetization strategy. I think this is the only reason why they're holding back because, like you said, they have everything in place. They have the data, they have the tech, they have the money and I assume they have already everything set up from a technological perspective. To me, it's certainly a question okay, what is the monetization strategy? Because what the earnings call of Google again applied. I mean, gcs is growing massively. The cloud business is really going through a roof, but search is still the main revenue stream for them and I think they are very careful about that.
Speaker 1:Yeah.
Speaker 2:The second or third move. Whatever they will be, I think once Google is really going down this road, it will be a big bang.
Speaker 1:Yeah, I think so too. You know, they've got an upcoming. They've got their developer conference coming up, their annual developer conference, IO, as well as GML or Google Marketing Live, their annual marketing conference, and these two are going to be slightly overlapping with each other.
Speaker 2:And I just have a feeling. I just have a feeling, chris. I think you told me right. Normally there's definitely more time.
Speaker 1:They're a week apart usually and for some reason this year they have a one-day overlap with each other, because I think IO is like two days, gml is one day and it's on day two of IO, and I just feel like they're building up to have this coordinated and it could be something like this. Who knows, I don't know.
Speaker 2:I stayed on my stance, or my take. So I think, although Google has everything in order to execute, I think we're still in very uncharted territory for Google because they have to execute If this AI thing, so embedding AI into their search environment if they are not executing well here, there are players out there who are, at least as of today, are certainly ahead of them, and I think this, this is this, this pressure thing. I think Google has real pressure now, which might be a good or bad bad thing we will we'll, we'll see but that's certainly some more uncharted territory for Google for for very, very long time.
Speaker 1:But I think also the the user experience here is still very untested, because I I just read a really interesting post from Jason Goldberg and he was sharing. He was using perplexity to make a purchase. He bought, like it was, from this retail, this US outdoors retailer, rei. He bought, like I think it was, a $12 bottle of sunscreen and that's what he, that's what he paid through perplexity All good, like, that's like, but he got order confirmation from Perplexity All good, but he got order confirmation from Perplexity and he got another order confirmation from REI and he had provided his card details and stuff like that. But it's so weird because he provided his personal card details to Perplexity but then the order confirmation he gets from REI has Perplexity's Visa card on there, not his, and the amount billed was instead of like $12, it was something like there's another $25 on top of there. Okay, and.
Speaker 1:PensionG. Well, digging into it. The AI had selected the premium one-day shipping that cost $25. Interesting, yeah, and he didn't get billed for that, but someone's going to get billed for that costs 25 bucks. Interesting, yeah, and, and he didn't get bills for that, but someone's going to get billed for that. And I guess perplexity must pay the difference. It's on their visa. That's his speculation.
Speaker 1:And there's other things he mentioned that you know he didn't have a chance to apply his REI loyalty points. I used to be an avid REI shopper myself. My loyalty, my REI loyalty points, were big because, yeah, anyway, they have a great they have really, they do their loyalty program properly. So there's still, you know, from a customer experience standpoint, it's pretty weird at this point still, and this is the kind of thing Google doesn't need to. They can let other people make those mistakes. You know OpenAI has like 1% of the volume of Google. The question is, as always, which 1%? Because if they do start drawing in a lot of product searches, that's an Amazon strategy to capture product search. Tiktok is looking to capture product search. Everyone is clamoring for this product search.
Speaker 2:And the majority of global searches is non-transactional in terms of not commercially viable or relevant. So I think I'm absolutely with you. It's really about the type of market share you can attract with these features. I mean talking about GPT search. I'm still wondering what does that mean for Microsoft and Bing ads? Right, I mean because how powerful would it be? Because GPT search is fast growing, we're talking about probably new users to a certain degree. How powerful would it be for a Microsoft advertiser to serve this new platform through my Bing account? Do you know anything about it, mike, and what's your take?
Speaker 1:on it. I mean, I know a bit about it, but I just think that there's a lot of kind of worrying priorities and interests here. I'm sure the Microsoft advertising team would love to have JetJPT as a placement.
Speaker 2:I know that for a fact.
Speaker 1:Yeah, I'm sure about that, but there's got to be other powers that be at Microsoft that see things a. I know that for a fact of dimes, but interestingly there were some leaked documents from OpenAI and they have these revised revenue forecasts or modeling through the year 2029. And the main thing, the two things changed. It's like a bar chart. I'm not sharing a screen here, maybe we can add it in post, but it's a bar chart with different revenue categories, like subscriptions and stuff like that, and they had an other category which has been renamed as agents.
Speaker 1:So they seem to have a plan to monetize through agents, and they also added in a new thing which increases the height of all of their revenue bars and it's called something like free user monetization and which sounds like a contradiction in terms. How do you monetize a free user? And the answer, implicitly, is through advertising.
Speaker 2:Advertising is the thing which comes on top of mind. Yeah, yes, and, by the way, even dimes can become important if you have a burn rate of billions of dollars. You have a burn rate of billions of dollars. So, like I said, these statements of the likes of Altman and Zuckerberg that advertising is something A not relevant to our business Certainly, I'm better than that. I don't buy it at all and, again, I think this move now is basically a strong indication that they are going this direction. Of course not.
Speaker 1:And just to quantify it, chris, I mean in these models by 2029, if I remember right off the top of my head, it's forecasting like $25 billion in advertising revenue, which is staggering to think about in such a short time. Certainly not dimes, and that's about like 20% of their revenue total, so it's a very significant contribution. Now I don't know if it'll be 25 billion or not, and I but I some, and what their total revenue height will be, but I personally have the feeling that advertising will be a lot more than 20 of their revenue in 2029. Like to me, the math doesn't matter. I'm just you know me, I'm bullish on ads interesting.
Speaker 2:yeah, I think another topic topic we will have our eyes on and we'll keep the audience posted. Definitely, mike, looking at the time, what's your take on profit?
Speaker 1:So last episode for someone, if someone's listening the first time we promised to do a steel man. Straw man If you're not familiar with that man is like, yeah, let's just say strongly in favor. It makes you in an argument seem as strong as possible. And straw man, you want to make it an argument seem as weak as possible. And we decided to talk about profit optimization and I was unwillingly assigned to the role of straw man. Um, you know, we're facing potentially the biggest recessionary environment, depending what happens with tariffs in quite some time. And you, chris, want me to tell people that their ads should not be profitable. But what?
Speaker 2:Look, henry, we can discuss this. So for the sake of having a clear frame for this discussion, all right, let's go in. Am I pro-profit?
Speaker 1:or anti. You're pro-profit, I'm anti. Or let's say you're pro-profit optimization, first-order profit, ah perfect, all right.
Speaker 2:Look, okay, should I start with my argument? Go for it, let's hear it. All right, look, I mean, by the way, everything I spit out now is basically based on my experiences, I'd say, from the last 14, 15 years working with retailers, and the argument I make, first and foremost, is if you're not capable of truly optimizing or at least measure the profit Whatever channel we're talking about whether it's Google, meta, amazon, doesn't matter you limit your strategic capabilities significantly. And I'll tell you one example Whenever a client asks us okay, dear, smart e-commerce, I would like to make more market, I want to increase my market share, then the first question we are discussing with the client is okay, fair, fair enough, but what is the waterline you're?
Speaker 2:You're accepting, you know, in terms of your overall business, in terms of cash flow management, liquidity and so forth. And every discussion circles around this one very, very glaring question what profitability waterline I have and how much I want to cut this waterline. But you have to have this reference point. So, before we jump into discussion, how important it is to really optimize on profit, I think that you are capable of measuring the profitability of a channel, ideally of each and every acquisition slash client. I think I have a very, very strong stance on this that it doesn't make sense to not measure it by any means. This one is hard to argue, mike.
Speaker 1:But you should absolutely measure your profit. Okay. But to kind of provide the counter arguments here and some of these, they're kind of old chestnuts, as the saying goes. But the main argument against, against like a first order profit kind of optimization model is that you are sort of over optimizing, that this is excessively short term, it's excessively conservative and it's going to limit your, your headroom. Also, you really need to do a proper job of separating your new and returning customers, because otherwise your most efficient orders and superficially most profitable could be from returning customers and stuff like that it's just going to perform better in the channel and so on. This is a significant variable cost. So that's kind of an idea there, and the classic idea I don't really agree with, particularly in this climate. It would be to talk about LTV, focus on LTV, lifetime value. But I just want to pick apart LTV a bit Like. I think everyone hears the phrase lifetime value and they think it's often thought of in this actually very top line way. Um, but lifetime value is actually a measurement of of profit over a longer time space and that means it includes ongoing or recurring marketing costs that are neat, that are necessary to retain a cohort or or a user and so like. I think that there's a middle ground here, because ltv is a bit it's a bit undefined.
Speaker 1:I've never found it particularly suitable for e-commerce. It it really. I think its origins stem largely from, like helicom and subscription businesses and it became popular through SaaS products, software as a service products. So it got buzzy in Silicon Valley and VCs and then, in the pandemic, vcs started. You know, like there was a lot of acquisition and all this stuff, this activity occurring in e-com valuations were super high. This stuff, this activity occurring in e-com valuations were super high, and these things got, to my mind, a bit excessively mixed up, because it's like, honestly, the LTV of most of your users will probably be whatever the value of their first purchase was, because they won't buy from you again. So what I like?
Speaker 2:A point taken yeah.
Speaker 1:I mean for me a middle ground here. I think I can buy into the argument that first order optimization is a bit too conservative and you can look at, like you know, slightly longer time horizons 30 days, 60 days, 90, depending on your business model, and stuff like that. So I think that you can stretch your neck out a bit further. I also do think I think another key thing here is, like the platforms it's getting. It is getting a bit harder to effectively target new and returning. Like meta has deprioritized these features a bit. Google is actually strengthening the features a bit, but it's very debatable how well they actually function. And I see a bigger issue here is that you do need to keep investing in customers over and over again, whether you like it or not. Yes, because we see, with smart bidding, like your conversion data is being shared with everyone else. It's building one big model together and if you're not bidding on that user like you think it's your customer, it's not, it's not, it has never been yours.
Speaker 1:Yeah, and if you're not bidding on it, that signal is going to another advertiser and they are in debt. So I think that you can ultimately kind of face death by optimization if you're too focused on profitability. Yes.
Speaker 2:What I would co-sign is especially the implicit blurriness of lifetime value, because I think the real impact of optimizing on lifetime value is, to a certain degree I know there was a big quote of a very, very successful CEO of one of our biggest clients Lifetime value is very comparable to religion. You have to believe in it and there's not this one way how to model lifetime. So I would co-sign that this lifetime, which is accumulation of profit, over time I think it becomes a bit blurry because it's really a question of belief. Let's talk about the profit Again, the profit on, maybe in a very straightforward way, on my first order, right, if I'm not capable of measuring the profit, I'm just not able to act strategically. So the very point you make, mike, that you're over-optimizing on profit, meaning that you leave market share out there which could perfectly suit your business objectives for the next six months, for the year, whatever, strategically, take it kind of a data driven decision you have to be able to measure profitability and, very importantly, to potentially optimize on profitability. Because another thing and this is, I would say, another layer of this whole profit discussion is the disconnection between so let's assume you can measure profitability A lot of retailers and even very advanced ones, big ones are not capable to optimize on profit in the very channel they want to optimize on profit.
Speaker 2:They optimize on Google Ads data and it's completely disconnected from the actual profit calculation. And I think this is one of the biggest leverages for every retailer nowadays to make sure that you have a clear understanding of profit what does it mean to the company? And to really make sure that this profit is actionable in your most important channels. And it's unheard of and sometimes I really scratch my head that even most advanced retailers have either not a real understanding of profit in terms of channel impact on profit and, most importantly, they are not even connecting profit calculations to their optimization. So I have a very strong stance on this, but I co-sign with you that this over-optimization might happen. Fair enough, but the basis in order to even take a decision to over-optimize or being more aggressive to gain market share is you have to have this profit waterline yeah Actionable in your channels, in the channels you're activating.
Speaker 1:Yeah, I mean hard to argue with Chris. I'm looking at the time. We don't have a lot of time left, but but we agree on that right.
Speaker 2:I mean, I think, the measurability of profit is very, very important in order to make the strategic decisions, and we're absolutely with you, Mike. Maybe we can conclude on that. Is that because clients are not really acting on profit in, let's say, Google Ads for the most clients, still the biggest acquisition channel there is they are not even taking conscious decisions on over-optimizing or being more aggressive in terms of let's get market share, because they don't have this reference point. So to the audience guys, I think this is a very, very strategic topic you should put way more focus on, if you're not already doing it.
Speaker 1:I agree with that, chris, and I don't know. Yeah, I'm not going to try and get in last word. You can it. I'm not going to try and get in last word.
Speaker 2:You can, it's still your show, mate.
Speaker 1:No, no, no, it's our show. We're on like episode five now, I think, co-hosting. So we're 5% of our way to our mission of 100, mate.
Speaker 2:Looking forward to it. We'll do something crazy. Episode 100.
Speaker 1:Totally, we're going to write a book, even if it's just boat. We flip our wardrobes exactly and I find it, find your your dirtiest oldest t-shirt, chris no, I just you, just, I just have to send one of yours maybe I think we, I think we're like similar size and size of course, yeah, all right on that disgusting note.
Speaker 1:let's let's wrap it up. Thanks everyone for joining the show. We really appreciate it. This podcast is brought to you by Smarter eCommerce, so to learn more about Smarter eCommerce, visit us at smarter-ecommercecom. And also please, if you enjoy the show, leave a review on your podcast platform of choice or recommend it to a friend. We really appreciate it.