The Current Shelf Life of Retail Media
MBB, along with many other agencies and brands, has spent years immersing itself in the world of retail media. We’ve navigated competitive pricing structures, promoted limited-time discounting, and launched seasonally relevant events. While these concepts are far from new (can you say, “coupon clipping”), the strategic way in which we approach our retail clients’ media buys has shifted drastically.
Retail media is the largest advertising player in the space and the primary reason for an explosion of spending. In fact, per Statista, global media spend on retail media reached $114 million in 2022 and is expected to continue its growth at around 10% over the next five years.
The reason is clear. Today’s retail media platforms promise to turn first-party data into actionable opportunities for brands. While all vary in sophistication and capabilities, they have delivered on the promises of big data as well as increased audience visibility and opportunity. Agencies and brands now have access to tremendous volumes of information that answer the one question everyone is asking—what’s your return on ad spend?
The shift to retail media didn’t come without trade-offs. CPMs were higher than what was traditionally available on the open market. Now, you are spending to move the needle at one retailer versus a variety. Finally, even with retail media’s benefits, brands never love to feel the squeeze on business elements beyond advertising and marketing. But given the circumstances, it has been an important part of most brands’ media mix.
When brands enter the digital marketplace, they seek visibility and impact across all audiences, channels, and retailers. These tightly constructed retail partners only provide data on their section of the world. Does a display ad on Walmart.com lead to a sale later at Amazon or a regional grocer? Of course it does. And, as a media company, you would want credit for driving that revenue. But, as a retailer, do you really care?
The first domino to fall is also the biggest with Amazon now reporting on sales impacted by their site traffic but redirected or fulfilled at another site. They can afford to—they can afford anything. Will other retailers follow? Only time will tell, but it certainly cuts to a singular question—are you a media company or a retailer?
Here is the good news for advertisers—we do not need to answer that question. The one we need to answer is: What role do these sites play in our overall mix? They are no longer solely bottom-of-the-funnel tactics. These retail sites are driving shopper traffic as entertainment, and we can recognize the value of that element.
Clients always ask us, “What is the right media plan?” It is a fair question but also suggests that there is a singular answer. At MBB we believe in testing and learning. The marketplace will tell us the right plan. I tend to look at our media spending like a stock portfolio. At various points, each element can perform better or worse. I think your job as a marketer is to “challenge the balance.” Do not be okay with the status quo. Ask yourself and your agency partner to be constantly evolving the plan. The biggest competitor you have is yourself. We strive today and every day to be the best version of ourselves. Keep pushing for that.
Subscribe to our newsletter
Get our insights and perspectives delivered to your inbox.