Retail media offers greater purchase conversion tracking advantages compared to mass media, but it can be more difficult to scale. Retail media audience size is limited to each retailer’s customer database, which pales in comparison to the audience that mass media sources can provide.
From agency partners to ad buyers to creative marketers and more, there are a lot of hands in the pot. Retail media can be complicated to manage because more cross-functional teams are involved in retail media decisions (e.g., sales teams, shopper marketing, etc.) compared to traditional paid media strategic decisions (see Figure 2).
Figure 2. Example Retailer Media Workflow Structure
Staffing and upskilling an organization to effectively leverage retail media networks has its challenges. Only 19% of marketing leaders stated retail media advertising is an effective sales driver in the last year for physical third-party sales channel partners, according to the 2023 Gartner Multichannel Marketing Survey. The same survey revealed that almost half of multichannel marketing leaders said that not having the right mix of specialists and generalists is a major impediment to successfully executing retail media advertising.
Retail media advertising is also new for media agency partners. Gaining new skills to evaluate performance by retailers and navigating a fragmented network ecosystem take time to learn. Consumer goods organizations can support their agencies by establishing clear internal processes and workflows on retail media advertising that make adding or removing an RMN more seamless.
Then there’s the complication of measurement. Cookie deprecation is driving indirect consumer brands to seek new sources of ad targeting and measurement data from channel partners closer to the point of sale. RMNs are structured to operate differently than marketers’ traditional channels. At present, there is no standard RMN measurement mechanism for brands to leverage, with every RMN operating as a walled garden. Concerns over walled garden power provide brands with incentives to explore media alternatives even when they can’t match the scale and efficiency of the largest retailers.
A consumer goods perspective
RMNs create expensive digital shelves for consumer goods companies, requiring more resources and budget.
Paid media took up the majority of consumer product goods’ (CPG) brand budgets in 2023; adding retail media to the mix requires multiple decision-makers, which complicates the process even further. Many consumer goods companies could use outside help, yet agencies and services receive the lowest percentage of the budget.
