Mark Ritson’s latest ADWEEK column, Don’t Let Retail Media Tell You It’s Brand-Building, reflects an unfortunately common refrain from the marketing effectiveness community.
Anti-retail media bias runs strong in these circles. It’s a “tax” from retailers, the media’s too expensive, and it doesn’t deliver ROI. It mostly takes credit for sales that would’ve happened anyway—after brand marketing has done all the heavy lifting.
He’s not alone in this view. Professor Byron Sharp of the Ehrenberg-Bass Institute and How Brands Grow fame claims retail media just catches people who are about to buy.
Ritson is a frequent critic of the overinvestment in performance media, and the overall demise of the marketing effectiveness discipline—often at the expense of brand marketing. On these things, he’s not wrong.
With retail media, however, he’s identified the wrong culprit.
Not only is retail media capable of brand-building, in the future the smartest advertisers will depend on it.
Retail media boosts marketing effectiveness
Marketing effectiveness research from Binet and Fields and Ebiquity establish that brand building should account for 55% to 60% of ad spend. CMOs prefer the majority of their budgets support brand-building. But in the U.S., over 70% of investment goes to performance media.
When high-quality media is adjacent to commerce, ad effectiveness happens. This is true for on-site, off-site, and in-store retail media.
Retail media obviously creates physical availability but also reach and mental availability in ways that are underappreciated.
I’ve previously called retail media “a mass-reach advertising vehicle ideal for national brands,” and called on brands to invest 5% of their linear TV budgets to in-store media. Digital surfaces in stores can replace the fast reach, cultural relevance and high attentiveness linear has lost.
CMOs and brand marketers are loath to concede this budget, one of the few remaining pools of brand-building dollars that consistently delivers ROI in their marketing mix models (MMM).
However, those models are weighted with the “priors” of past MMMs that have always shown linear TV to be effective—and they don’t account for retail media, according to 70% of marketers.
Causal modeling, another approach to measuring incrementality, doesn’t have this problem and consistently reports retail media networks to be among the highest ROI channels.
Linear TV isn’t ineffective, but brand marketers should let go of their biases and reconsider retail media as a complement rather than a threat to existing campaigns. Rory Sutherland, vice chairman of Ogilvy UK, puts it best when he calls retail media “context-sensitive brand-building.”
