What Your Agency Won’t Tell You About Retail Media

Media agency executives gave retail media network (RMN) leaders rare insights into the minds of their CPG brand clients in a revealing study on the exploding RMN industry.

The study, in partnership with the Path to Purchase Institute and our team at CVS Media Exchange (CMX), confirmed the momentum of RMNs shows no signs of slowing.

The study involved 86 CPG-focused media agency professionals with a focus on the present and future of RMNs. Our study’s insights give a blueprint for RMNs who want to be proactive rather than reactive in meeting buyer needs.

Insight #1: RMN investment is no longer a sliver of the marketing pie — it’s now half of it. Eighty percent of CPG buyers are going to spend more in retail media next year than they did this year. This increase is coming as they shift retail media dollars from 35% to closer to 50% of future budgets.

RMN takeaway: Now is the time to double down on showcasing your ROAS and highlighting exclusive inventory. We can track spending in ways other advertising channels can’t and reach audiences at a granular level. Dollars are being allocated to RMNs that tell that story best.

Insight #2: There’s a healthy debate in your buyers’ leadership meetings on deploying new dollars on in-store media vs. new channels like mobile app placements. You may feel like you have multiple RMN media channels worth investing in, but our study shows that senior leaders and mid-level leaders disagree on the value of each. Senior leaders showed a preference for in-store digitization, with 59% believing it’s necessary for success. Compared to 34% of mid-level leaders with the same belief, it’s clear that your media mix presentation may be received quite differently based on the audience.

RMN takeaway: Know your audience. Mid-level leaders are more open to app and other off-site placements, whereas senior leaders value the in-store experience.

Insight #3: ROAS & ROI still dominate measurement, but incrementality is climbing the charts. ROI and ROAS are rated by agencies as the most important measurement for their CPG clients. But going beyond “How much revenue are we driving?” are key questions about whether retail media can bring additional buyers into the brand, category and store, with approximately 30% of respondents indicating “incrementality to category/brand” tops their measurement wish list.

RMN takeaway: Everyone is using different KPIs for measurement and effectiveness. It’s confusing for media buyers to compare effectiveness with other media channels. To meet the demands of increasingly sophisticated marketers, incrementality will be a metric that networks will need to accurately measure against to demonstrate positive ROI. The industry is still early in its inception, and there is a big opportunity for RMNs to partner with independent industry bodies to develop standardized metrics.

Insight #4: Agencies rely on RMNs’ ability to innovate with new channels and analytics to meet goals. Eighty-four percent of agency respondents said that retail media will be a strategic priority over the next two years for their CPG clients, with the innovative channels leading the evolution — especially shoppable video content, increased personalization, omnichannel audience tracking and in-store digitization.

RMN takeaway: Continue to innovate your offering, but always keep the consumer in mind. Build a product that is additive to their experience, in retail or otherwise.