Two in three advertisers don’t plan to invest in new retail media networks (RMNs) in the next couple of years, according to Association of National Advertisers (ANA) data. “The majority of dollars used to fund investments in retail media are being borrowed from existing budgets within advertisers’ organizations,” said our analyst Sarah Marzano.
This presents a particular challenge for new and small RMNs. “New entrants need to differentiate themselves,” said Marzano. For example, a regional grocer like H-E-B needs to leverage that ad dollars can potentially go further with H-E-B’s local Texan audience than with Walmart’s less niche customers.
Advertisers are also looking for RMNs that provide brand marketing opportunities, either through off-site activations on social media or connected TV (CTV) or on-site activations via unique display or video ad offerings.
To differentiate themselves, RMNs should focus on improving the top features advertisers are looking for. Those reasons, according to a June 2023 Interactive Advertising Bureau (IAB) survey, are:
- Ability to reach new/incremental audiences (55%)
- Ability to leverage retailers’ first-party data (52%)
- Demonstrably strong performance (48%)
An RMN with all these desirable attributes still needs to make it easy to buy inventory. This starts with streamlining the ad-buying process, which is where third-party partnerships with ad buying, measurement, and management platforms are valuable. Agencies and ad tech platforms can help with some of advertisers’ biggest pain points, which include lack of standardization across platforms (55%) and attribution to sales (48%), per a January 2024 ANA survey.
“Middlemen have a unique position to cut through the noise and streamline processes both for brands and for RMNs,” Marzano said. “They can create platforms that help standardize performance and create apples-to-apples comparisons,” said Marzano.
This was originally featured in the Retail Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.