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The State of Retail Media: Behind the Data

Research shows there’s a consolidation opportunity for retail media, says Criteo's Ryan Britton.
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Ryan Britton

When 80% of marketers say the retail media channel is as important or more important than social (ditto for mobile), it’s clear we’ve turned a corner. That’s just one of many notable findings in the Path to Purchase Institute’s “Retailer Media Networks Research” report, but it highlights how the channel has emerged as an essential pillar of the CPG marketing mix. In fact, the survey respondents largely agreed it’s the “new slotting fee” for a digital age.

With more than half of brand leaders surveyed saying they increased investment for 2022, spending reflects this shift, as does the number of new networks launched by retailers ranging from Ulta Beauty to Uber.

But retail media’s soaring growth, which industry analysts have been predicting for months, is just part of the important story this research has to tell. Between the lines, it shows there’s a problem brewing: fragmentation.

Most CPG brands surveyed reported working with multiple retail media networks on disparate UIs. The biggest spenders may work with 10 or more — not to mention any inventory aggregators or other platforms they plug into. Amid all the progress in retail media, this platform proliferation should be a red flag because it has bottom-line implications.

For example, consider the spending inefficiency brands already report across networks. More than 40% of marketing leaders surveyed by the Path to Purchase Institute said they are overspending on networks versus inventory aggregators — and the more networks they work with, the more inefficiency they report. Moreover, a third of respondents are unhappy with network measurement capabilities, and a similar percentage is dissatisfied with network data sharing. Marketers want more targeting options, clear attribution, and the ability to measure incrementality and ROAS across networks. Disjointed dashboards make that virtually impossible.

These sentiments mirror what Criteo has been hearing from advertisers. Our data shows that the top factor holding back organizations from investing in retail media is inefficient budget and decision-making processes, and 75% of marketers said their organizations are over-indexing on spend in retail media walled gardens. What’s more, 83% of marketers said their organizations would invest more in retail media if a unified platform could provide standardized ad formats and reporting with access to multiple retailers.

Platform fragmentation prevents brands from getting a holistic view of spending and performance. And as more networks join the ecosystem, the problem will only worsen.

Without an aggregation strategy, the channel isn’t scalable, and growth isn’t sustainable.

For retail media to reach its full potential, brands need a way to streamline and consolidate inventory management and merge disparate access points. Doing so will alleviate many of the pain points that the surveyed marketers are reporting.

With a more aggregated approach, retail media can be much more than a slotting fee for digital commerce. It can be more strategic, efficient and lucrative for all stakeholders. Increased competition for inventory will improve yield for retailers. Brands will benefit from simpler management and optimized budget allocation. And consumers will enjoy more relevant and engaging shopping experiences.

If we solve these fundamental issues now, the industry can take better advantage of the opportunities that will come with Retail Media 3.0. We’ll go beyond sponsored ads and display to create new consumer experiences. We’ll adopt a more full-funnel approach to turn brand awareness into conversions. And we’ll tap into digital shelf insights to inform product decisions. But first, we need a simpler, more transparent and unified inventory marketplace.

About the Author: Ryan Britton is Vice President of Sales, Retail Media, Americas, at Criteo.

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