The State of Retail Media: Outlooks, Strategies & What’s Next

From defining incrementality to accelerators and barriers to investment, P2PI and Skai’s proprietary research aims to benchmark retail media’s meteoric rise and offer statistical guidance for CPG brands.

Cyndi Loza

2/5/2024

In collaboration with Skai

Retail media’s rise and impact on the marketing landscape has been undeniable and it shows no signs of dying down. It’s going to be the fastest-growing ad channel across media through 2027 (according to Insider Intelligence), making it bigger than connected TV, digital audio and traditional television advertising combined in the next few years.

Recognizing its growth, omnichannel marketing platform Skai has produced a “State of Retail Media” report the past few years to help marketers understand trends driving the channel, as well as current and future retail media challenges and strategies. “This is our third annual report on the state of what has become the fastest-growing channel in advertising history,” says Michelle Urwin, Skai’s vice president of marketing. “[Retail media is growing] faster than search, faster than social, and is still growing in double digits year-over-year.

Through these State of Retail Media reports, Urwin explains, Skai’s goal is “for marketers to gain valuable perspectives on how their peers are embracing this opportunity and navigating its unique challenges.”

The Path to Purchase Institute (P2PI) — which conducted our own State of Retail Media research back in 2022 — teamed up with Skai to jointly produce this year’s report aimed at benchmarking retail media’s meteoric rise and offering statistical guidance for CPG brands looking to make informed and strategic decisions on their retail media programs. To do this, P2PI fielded an online survey from Oct. 23 to Nov. 20, 2023, picking the brains of 98 professionals working within a consumer product manufacturer (with more than 10% of marketing budget allocated to retail media) or an agency. Respondents were asked a variety of questions ranging from retail media strategies and measurement to accelerators and barriers to more investment in the channel.

Executives working within agencies made up 59% of survey respondents with CPG brands making up the rest (41%). Nearly a third of respondents surveyed (30%) were managers, followed by directors (23%) and senior management (22%) and head of business (8%). Among CPG brand professionals, a majority (58%) indicated that 11%-35% of their total marketing budget was allocated to retail media in 2023, followed by 28% who reported 36%-50% of their total budget was allocated to retail media and 15% who said more than half was designated for retail media.