Retail media networks grow faster when they operate like media companies. According to Frank Mulcahy, head of Chewy Ads, that means hiring sellers who understand the merchant relationship, earning trust before scaling, launching self-serve first, and measuring what a customer is actually worth over time with lifetime value return on ad spend (LTV ROAS), new-to-brand sales and incrementality, then letting brands check the math themselves.
Most retail media networks were started by retailers. Frank Mulcahy came at it from the other direction. Before he led Chewy Ads, he spent two decades selling media at Lycos, Yahoo and Microsoft, helped launch Apple's iAd business in New England, and in 2016 joined Wayfair to build its retail media network from scratch. Since arriving at Chewy in 2022, he has moved Chewy Ads onto its own platform, doubled its advertisers and campaigns in the past year, and launched Chewy Max, the Chewy Marketing Cloud and native incrementality measurement.
In this episode of Unlocking Retail Media, Kevel CEO James Avery talks with Mulcahy about what it takes to run a retail media network like a media company. Below are the seven biggest takeaways, structured as direct answers to the questions retailers and brands are asking right now.
Takeaway #1: Why Do Traditional Media Sellers Struggle Inside a Retailer?
Short answer: In digital publishing, the ad seller owns the client relationship. Inside a retailer, the merchant does. The media team has to plug into a relationship that already exists.
Mulcahy says some of his biggest early missteps at Wayfair came from hiring account executives straight out of digital ad sales. They were used to owning the account, and that model breaks inside a retailer. It reminded him of his years at Microsoft, when MSN was a multi-billion dollar ad business that still acted as a specialist to the enterprise sales team.
"The merchant or the category manager, they own the account, and you're a specialist to them." - Frank Mulcahy
His fix was to hire sellers from the merchant organization. Merchants and category managers negotiate a dozen things at once and already know what problems a vendor is trying to solve. Many studied marketing and want to move sideways into advertising, what Mulcahy calls the career jungle gym, instead of the career ladder. Pipeline management and sales motions can be trained. Deep knowledge of the merchant relationship cannot.
There are limits. A new seller from the merchant team is not ready for a Madison Avenue agency conversation on a $50 to $100 million account, so Mulcahy matches skill sets to account segments. And as he joked, show a merchant the LUMAscape for the first time and their head explodes.
Retailers also have to build functions a publisher takes for granted:
- An ad server. Nothing comes off the shelf inside a retailer.
- Ad operations, account management and analytics. Each team has to be designed from and built scratch.
- Accounts receivable. Vendor funding has often arrived as a discount off invoice, so actually billing for ad services can be new to finance.
Above all, the media team and the merchant organization need alignment at the leadership level. Otherwise the two sides end up as frenemies negotiating against each other, when the real goal is finding the best next dollar for the vendor across promotions, pricing, logistics, merchandising and advertising.
Takeaway #2: How Do Retail Media Networks Earn the Money Brands Want to Spend?
Short answer: Make the buyer's job easier. Joint business plan (JBP) money is the money brands have to spend. Performance budget follows the networks that prove value and make buying painless.
Agencies and holding companies are far more involved in retail media than they were six to eight years ago. Scaled networks are prepared for that. Teams with only retail backgrounds often are not, and they struggle to juggle an agency JBP, a publisher JBP and a brand JBP at the same time, or to answer agency capability scorecards that can run 110 to 120 questions.
Mulcahy's answer borrows heavily from his publishing years. Relationships still matter. When unspent budget appears at the end of Q4, buyers call the partners they trust. To earn that call, Chewy Ads focuses on:
- Action-oriented monthly business reviews (MBRs). Specific advice on where to bid lower, which keywords to add and which audiences to target, instead of what he calls the "throw up and shut up" campaign wrap report.
- Co-creating with agencies. Sitting on the same side of the table and letting them take credit with their clients.
- A customer advisory board. A couple dozen top clients and agencies now meet one-on-one with Chewy's product teams.
The buyer on the other side is often managing anywhere from two to 12 retail media networks, each with a different attribution window and a different view-through or click-through standard. Any network that makes reporting back to the client easier earns more of the budget.
Takeaway #3: How Did Chewy Ads Build Its Retail Media Network From Zero?
Short answer: By earning trust first, launching one product well and adding capability deliberately, quarter over quarter.
When Mulcahy arrived, the media business was, in his words, "not a lot equaling zero." Chewy brought in strong product and engineering ownership from the start, and Mulcahy spent most of his first 18 months on one of Chewy's operating principles: earn trust. Multinational CPG vendors had heard retailers promise ad businesses before, and as Mulcahy put it, they know smoke. Early on, he even declined a merchant's request to pitch a major vendor's CMO because the capabilities were not ready yet.
The build sequence that followed:
- A realistic target. Set internally from the total addressable market (TAM) and expected spend rates in a highly branded consumables category.
- Sponsored products first. Get the base product right, show results internally and externally, then expand.
- Lean staffing. Mulcahy never asked for 20 heads on day one. Growth had to justify every new hire.
- Self-serve first and always. Brands do not want yet another managed service business, and self-serve lets the team stay lean and nimble.
All of this ran while Chewy re-platformed in the background. Product teams also heard vendor feedback directly, because, as Mulcahy joked, when product hears it from sales, it just sounds like sales complaining.
Takeaway #4: Why Did Chewy Launch LTV ROAS on Day One?
Short answer: Because 85% of Chewy's revenue comes from Autoship subscriptions. A new-to-brand Autoship customer is worth far more than a single purchase, and standard return on ad spend (ROAS) misses that value.
Autoship gives Chewy stable, predictable revenue. For the ad business, it is a challenge, since Mulcahy sells reach and frequency on site and subscribers rarely browse. So Chewy turned it into a strength. Many vendors would rather convert a customer on Chewy than anywhere else, because that customer keeps buying.
"If you're not accurately looking at the true value of a converted Chewy customer, you are leaving money on the table." - Frank Mulcahy
Reporting LTV ROAS from launch was controversial. It is not apples to apples with other networks, and Mulcahy accepts that. His response is full transparency. Chewy shows direct ROAS, LTV ROAS, new-to-brand sales and incrementality side by side, with the methodology behind each. The clean room inside the Chewy Marketing Cloud lets brands compare national campaigns against organic and ad-attributed sales on Chewy.
Subscription also changes how Chewy builds baskets. If a shopper's cat food arrives automatically, Chewy uses off-site audience segments, promotional windows and CRM campaigns aligned to a brand's national promotional calendar to bring that shopper back to discover new products. Lickable cat treats, for example.
Takeaway #5: How Should a Retail Media Network Serve Both Large and Small Advertisers?
Short answer: With a barbell strategy. Give sophisticated buyers full control, and give everyone else an objective-based product that does the heavy lifting.
Chewy's vendors range from multinationals running dozens of brands to small treat makers working out of a garage. Large vendors with agencies, and many direct-to-consumer (D2C) brands that already win on the open web, want every lever available. In Mulcahy's words, “they've got better kung fu”.
A large share of vendors are not sophisticated media buyers, and some have two or three marketers covering eight or ten networks plus social. For them, Chewy launched Chewy Max this year, a programmatic, objective-based buying product. The advertiser sets a target ROAS, and Chewy handles bidding, keywords and audience targeting. The roadmap expands the objectives to new-to-brand customers, incremental customers and, eventually, goals like seeding product reviews.
Larger vendors use it too, running it as an evergreen campaign in the background to catch the niche shopper browsing at 3 a.m. on a Thursday.
Takeaway #6: Where Is Retail Media Headed Next?
Short answer: Toward consolidation, federation and programmatic, API-based buying. Retail media networks now compete for budget with Google, Meta, the open web and linear TV, as well as Amazon and Walmart.
Mulcahy says the grace period for specialty retailers is over. Brands no longer give a pet store a pass for being new to media. To win budget from channels with a 10 to 20 year head start, retail media networks have to show better efficiency, better efficacy and ease of use, and support API partnership buying like the recent collaboration between Kevel, Dollar General and The Trade Desk.
"No one gets fired for buying Meta." - Frank Mulcahy
He sees the industry repeating digital media's history, moving from portals to ad networks to programmatic and API buying, only faster, with AI accelerating the shift. There are too many networks for buyers to work with one at a time, and the buy side eventually wins, just as it did when P&G pushed the industry to adopt viewability standards.
Avery added a note of optimism. Programmatic commoditized many publishers, but retailers stock the products being advertised, which gives them more bargaining power. Mulcahy agreed. Product discovery happens in retail, on rich product detail pages (PDPs), and that inventory shouldn't be commoditized. He expects standardized buying to move faster off site, while retailers still keep business rules that protect the value of their inventory.
The networks that get their own house in order, with easier buying and transparent, uniform measurement, will win an outsized share of budget against the two poles of Amazon and Walmart.
Takeaway #7: What Should New Retail Media Leaders Get Right First?
Short answer: Know who your executive sponsor is, set realistic revenue expectations, and get one product right before building the next.
Mulcahy's advice for leaders in their first year or two:
- Name the internal client. Whether the network sits in merchandising, advertising or finance shapes everything, from subsidizing marketing costs to improving merchant margins.
- Separate real from projected. Consultant forecasts often describe a best-case year five. Ask what ad spend as a share of gross merchandise value (GMV) you can actually capture in years one through four.
- Don't boil the ocean. Land one product, prove it works, then build from there.
- Hire for both languages. You need people who can speak programmatic ad tech and people who can speak merchant. A merchant alone cannot win New York agency money, and an ad seller alone will alienate the merchant team.
Key Takeaways at a Glance
Why do traditional ad sellers struggle in retail media?
Mulcahy's Answer: Merchants own the account. Media sellers are specialists who have to plug into that relationship.
Who makes the best retail media sellers?
Mulcahy's Answer: Merchants and category managers. Selling can be trained. Retail knowledge is harder to learn.
How do you earn more of a brand's budget?
Mulcahy's Answer: Reduce friction, deliver action-oriented insights and build real relationships with agencies.
Why measure LTV ROAS?
Mulcahy's Answer: With 85% of revenue from Autoship, a converted Chewy customer is worth far more than one sale.
How do you serve small advertisers?
Mulcahy's Answer: Objective-based buying through Chewy Max, where the brand sets a goal and Chewy runs the bids.
Where is retail media headed?
Mulcahy's Answer: Consolidation, federation and programmatic, API-based buying with uniform measurement.
What should new retail media leaders do first?
Mulcahy's Answer: Find the executive sponsor, set realistic targets and get one product right.
Conclusion: Run Your Network Like a Media Company
Mulcahy's playbook at Chewy comes down to discipline. Earn trust before asking for budget. Hire people who understand the merchant relationship. Launch self-serve, measure what a customer is really worth, and show your methodology openly enough that brands can check it.
For retailers building media networks, the bar has moved. Brands now compare a specialty retailer's ad business with Google and Meta, so the networks that win will be the ones that own their technology, make buying easier through self-serve and API partnerships, and give advertisers transparent measurement they can trust. That combination is what turns money brands have to spend into money they want to spend.
Listen to the Full Conversation on Unlocking Retail Media
For more insights like these, tune in to the full episode of Unlocking Retail Media, the podcast where Kevel CEO James Avery sits down with industry leaders and innovators shaping the future of retail advertising.
Listen to this episode with Frank Mulcahy here.
