The future of retail media is the future of all media
According to Emarketer, retail media constitutes a meaningful percentage of every major pool of ad spending, including search (29%), programmatic display and video (11%), social media (6%), CTV (16%) and digital-out-of-home (15%). Most of these formats are where brands are built today. Retail media is both a channel and a layer.
It even has certain advantages over traditional brand-building media: Increased penetration with better targeting of high-value shopper segments; driving incremental audience reach by suppressing ad delivery to existing brand buyers; and higher average brand lift across the funnel.
Here are a few ways to think about brand-building in retail media:
On-site retail media – Sponsored products are bottom of the funnel, but moving up the funnel into on-site display and video ads is effective at brand-building as higher-impact creative drives brand awareness and mental availability at opportune moments. They can introduce shoppers to new brands and win new customers through conquesting.
Off-site retail media – If off-site retail media can’t build brands then why is Procter & Gamble investing in it so heavily? Sensor Tower data indicates that P&G’s off-site retail media investment has more than doubled in the past year—well beyond that of other CPGs—with social and streaming TV gaining significant share. It’s probably not a coincidence that the advertiser known for pushing for 90% to 100% target reach for its brands is throttling up its off-site retail media.
In-store retail media – Ritson called attributing sales to people already in the store ready to buy your product “the single most flattering metric in marketing.” He’d be right if that’s how in-store advertising was measured, but no sane brand would ever accept ROAS or attributed sales. Matched market tests are most commonly used to determine incremental sales lift.
Top retailers’ in-store audiences compare favorably to the largest TV broadcasters and provide a dynamic new creative palette for brands and agencies to experiment with, and those campaigns deliver marketing effectiveness well after the shopping trip is over.
Retail media can build brands if you allow it
Ritson is completely right about marketing effectiveness, but he shouldn’t be so selective in its application. Performance marketers aren’t the only ones with myopia.
While brand marketers are understandably protective of TV budgets, I will offer this concession: Instead of new retail media budgets coming from linear, they should come from performance media that don’t perform: overinvested channels like search, social, and low-quality open web programmatic.
And especially from black box AI tools like Google’s Performance Max and Meta’s Advantage+. When brands cut from these channels and shift into retail media, marketing effectiveness soars and brands actually grow.
Just like with MMM, only when you relinquish your priors does the true value of retail media reveal itself.
