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As retail media soars to the top of every industry event’s agenda—and list of most-used buzzwords—developments are less settled behind the scenes at many retail media networks.
Based on conversations with six sources—including industry analysts, media buyers and retail media executives—three major pain points have emerged that RMNs and their partners grapple with as the category grows: internal silos, measurement and product investment.
As global retail media ad spend is forecast to reach $165.94 billion by 2025 (per eMarketer), how retailers navigate these challenges will define how much of that is theirs and their place in the race to catch up, or reach second place, behind Amazon.
Challenge 1: Internal tensions
Retailers’ merchandising teams—which have historically worked with brands to negotiate in-store product placement and allocate shopper marketing dollars—are operating independently from retail media teams, which are responsible for setting up a new revenue stream associated with using data to sell ads and audiences onsite, offsite and in-store. Often they are talking to those very same brands.
“We want to bring a ‘One Target’ approach to any brand that we’re working with,” Sarah Travis, president of Roundel, told ADWEEK ahead of Cannes Lions. “To do that, the team that’s covering Procter & Gamble at Roundel needs to be in lockstep with the teams in merchandising working with P&G to go out to market and work with P&G on one approach for their business with Target.”
The negative impacts of that siloed environment mean that brand marketers, who have the data telling them what works and what doesn’t, are struggling to holistically talk with both of these teams at their retail partners to quickly pivot and capitalize on what’s working.
This sends mixed messages to advertising partners, according to one buyer who spoke with ADWEEK on condition of anonymity.
Some retailers believe that “if you want to keep your products on the shelf, you should play nice here,” the first ad buyer said. From the brand perspective, that layers retail media onto the slotting fees that retailers charge for prime shelf space.
Retailers are working to bridge the gap between merchandising and media by building cross-functional teams, but it’s a process that media buyers say isn’t complete at most RMNs.
