Retail media is marketers’ third-most used marketing channel, according to 2024 survey results from Digiday’s CMO Strategies series. That is the same position retail media held among marketing channels in last year’s report. However, retail media did see an increase in adoption from 2023 to 2024. Forty percent of respondents said their company used retail media last year versus 51% of respondents who said the same this year.

Over the last year, retail media has surged in popularity, with many retailers investing more heavily in the channel and others venturing into retail media for the first time. New retail media platforms have popped up from specialty retailers like luxury department store chain Saks Fifth Avenue, travel company Expedia and national bank JPMorgan Chase. The wide range of new entrants has marked a clear rise for retail media networks (RMNs).

“[A challenge] has just been the proliferation of retail media networks and the fact that there are so many options, and those options are wildly different in their capabilities and maturity,” said Laura Knebusch, svp of CPG marketing and consumer experience at household products manufacturer Georgia-Pacific. “Understanding and navigating where to invest, how to make those decisions and how to think about that long-term roadmap is a complexity we deal with.”

While retail media has a ways to go before competing with No. 1 marketing channel social media, it’s making rapid strides as its strengths become more clear. For example, retail media has an edge over other channels when it comes to its access to purchase data through sites that are built for commerce. With data privacy laws becoming stricter and Google continuing to inch closer toward the end of the third-party cookie, access to networks with customer purchase data is an attractive potential cookie alternative.

Georgia-Pacific’s Knebusch agreed that the availability of first-party purchase data is a particular advantage of RMNs. “I would say the strength is certainly the first-party data, and the ability to identify when and where [consumers] are in different elements of their purchasing cycle and [to] be able to target them with relevant messages,” she explained. “An example would be a back-to-school program with our Sparkle paper towel brand, where we could find people who were online, shopping for school supplies, and who also had been looking at paper towels, [in order] to reach them with a specific message. … That ability to layer in that data is the primary benefit. And to drive and shorten that purchase cycle to conversion are the benefits.”

Group M reported in a 2023 recap report that the retail media ad market grew by more than $10 billion in 2023, and was expected to end the year with an estimated $119.4 billion in revenue. Group M forecasts that it will increase by 8.3% in 2024. Similarly, eMarketer predicted that retail media will account for one-fifth of ad spending in 2025.

To map out marketers’ current digital playbooks, Digiday+ Research sent out a survey asking 174 respondents about past and upcoming investments, marketing channel tactics, preferences and business challenges. 

Digiday+ Research also conducted interviews with individuals and through a focus group with marketing executives across industries.


Amazon still rules, but Walmart and Target make strides

Among retail media networks, Amazon holds the majority of marketers’ budgets, with Walmart’s Walmart Connect and Target’s Roundel platforms coming in second and third. That’s not to say that Walmart and Target aren’t building up their RMNs and even seeing greater adoption among marketers. Digiday’s 2024 survey results showed an increase in marketer respondents’ use of Walmart Connect and Target’s Roundel platform from 2023 to 2024, with Walmart Connect in particular almost doubling in percentage points from 24% of marketer respondents who said they used Walmart Connect last year to 46% who said they use it this year. A further deep dive into the survey also indicated a high correlation between the percentage of respondents’ marketing budgets they allocated to Walmart Connect and to Target’s Roundel platform. The correlation indicates that the two platforms are likely growing in lockstep with each other.

Walmart in particular has ramped up its retail media efforts in the first half of the year. In February, Walmart announced plans to acquire Vizio, an electronics company that focuses on TVs and streaming data. Vizio collects data from 23 million opted-in devices, and 18 million of those are through SmartCast, the company’s smart TV operating system. The deal is currently under review by the Federal Trade Commission, but if it closes, Walmart will be set to increase its streaming capabilities as well as add to its existing consumer data, which would likely be attractive to advertisers. “I think they’re going right after Amazon, as they should,” Vinny Rinaldi, head of media at The Hershey Company, said when asked if the deal could be part of a push by Walmart to compete with Amazon. “But Walmart has a leg up on especially fast-moving consumer goods where we don’t own the endgame.”

Katelyn Nugent, integrated marketing and communications director at fruit juice and snack maker Welch’s, said in an email interview with Digiday that retail media networks are an integral part of the brand’s paid media efforts. “Walmart Connect is our biggest and most meaningful partner. Not only are they the largest U.S. grocery retailer and online grocer, they have low overlap with other grocers and, most importantly, their data and research capabilities are best-in-class,” Nugent said. “We spend about 40-45% of our paid media budget on RMNs supporting all of our key retail partners (Publix, Kroger, Target, Dollar General, Sam’s Club, etc.).”

Compared to last year’s CMO Strategies retail media report, Digiday’s 2024 data reveals that some marketers are shifting their RMN investments to other retailers outside of Amazon. “The investment chips, at least from our clients, are starting to flow into Walmart, Instacart, Kroger, Chewy, Ulta and more,” said Jared Belsky, CEO of digital agency Acadia. “Walmart for us grew 104% [in 2023], Target was 56% and then the smaller retail media businesses together grew around 200%.”


RMNs show top-of-funnel potential alongside bottom-funnel strength

What did not shift much from last year were the main success metrics marketers consider for retail media. The majority of marketer respondents said that they measure retail media success via commerce or sales rather than awareness metrics like impressions or engagement — 86% of respondents said commerce or sales is their primary measurement of success across all platforms in 2024, versus 9% who said the same of engagement and 1% who said impressions is their top success metric. This result is likely because retail media sits much closer to the point of checkout than other marketing channels. The passive scrolling of social media is better for building brand awareness and engagement, whereas more purposive behavior on RMNs drives lower-funnel sales on owned platforms.

“[Retail media is] more bottom-funnel because you are so close to that transaction. You have the opportunity to close the deal and be able to provide very tight feedback to the advertiser in terms of the metrics,” Alex Kazim, vp and general manager of global advertising at eBay and lead of eBay’s RMN, said about retail media’s positioning. “It’s essentially deterministic attribution — the item transacted with [the ad], you drove the buyer, and then advertisers understand the return they’re getting from their dollars on the platform. That’s one of the reasons why [retail media] has benefited so much from all of the privacy changes.”

Though retail media has demonstrated strength as a bottom-of-the-funnel marketing strategy, the channel has started showing signs of breaking into the top of the funnel. Joe Milano, chief data officer and marketing lead at Tapestry, a luxury fashion holding company that owns Coach and Kate Spade New York, said he sees the potential for using RMNs for top-of-funnel marketing. “Amazon is the largest because it has become more generally a search engine, in some cases, for Gen Z, millennials, etc. Even if you’re not necessarily shopping, you’re becoming aware of some brands on these platforms,” Milano said.

Similarly, eBay’s Kazim also noted the top-of-funnel potential for RMNs. “Typically, retail media networks have been lower down in the funnel. I think there is an opportunity for them to get higher up in the funnel. Because of the first-party data, you can tightly target what users you are trying to find,” Kazim said. 

“For example, if [a marketer is] looking for people who love golf and bought a golf club in the last 90 days, we have that data. If that’s your audience, we can target that audience,” he added. “That’s very hard to do outside of a marketplace. Inside the 3-P advertising world, you can try to target someone on social media who likes golf. Sure, they’ve looked at some golf videos, but did they buy something? Part of what we can do is provide that level of very tight targeting.” 

With the growing number of retail media networks, especially those from specialty retailers, this top-of-funnel strategy will likely become more relevant for niche brands. Those brands will be able to address their specific audiences without having to rely on segmenting features at larger retailers, such as Amazon. 

To that point, Athletic Brewing, a non-alcoholic beer brand and brewery, looks beyond Amazon to food and beverage-specific retailers to better fit the company’s niche product marketing needs. “We do use more than just Amazon,” said Kate Breen, media strategist at Athletic Brewing. “We’ve invested in other networks such as Instacart and Drizly — now Uber Eats — as well as national chains like Walmart and grocery retailers like Kroger.” 

Chris Furnari, senior communications manager at Athletic Brewing, further emphasized this point. “We want to bring greater awareness to Athletic and the non-alcoholic beer category on a wide range of platforms,” he said in an email. “Generally speaking, different retail media platforms can outperform one another depending on the industry. As a brewing company, we have found platforms like Instacart — which is hyper-focused on food and beverage — to be very effective and comparable in volume to Amazon in recent years.”


Is retail media’s growth sustainable?

Similar to the lack of change in success metrics, the challenges marketers face on RMNs did not change much from last year to this year either. This year’s survey included new responses to gauge marketers’ challenges regarding RMNs, such as lack of consumer interest and lack of expertise. However, even with the new options factored in, cost of media remained the biggest challenge marketers said they face with retail media networks. Some respondents did note one new challenge this year — lack of budget. 

When looking at the marketing mix as a whole, including social media and display ads, Digiday’s survey found that cost of media is the most common challenge across all marketing channels. While cost is often associated with budget, for marketers working with retail media, the two challenges can be viewed separately. Marketers’ retail media budget concerns are unique in that the challenge they face is likely stemming from the rapid growth of RMNs. As new platforms are introduced, marketers have had to stretch their budgets in order to balance their platform mix.

Some experts have said that the boom in new retail media options is not sustainable and harms all parties. “There’s not enough money to go around for this to be sustainable,” said Ethan Goodman, evp of digital commerce at The Mars Agency. “Once you get past a certain point, the offerings start to blur together and the question becomes, ‘Why don’t I just invest in the [major players, like Amazon, Walmart, Target and Kroger].’” 

However, with more retail media options becoming available, marketers are able to better decide what mix is best for their brands. Tom Spaven, vp of marketing at sustainable brand Reduce and former vp of marketing at Good Wipes, said independent agency Acadia helped Good Wipes with its retail media strategy. “You can give them a total budget and then ask them to come back with a recommendation on optimal split rather than giving them the budget by channel to play with” Spaven said. “Essentially, they’re coming in upstream and helping you build a retail media strategy as opposed to just spending your money for you in the places you tell them to. They just know all the tricks — they are very embedded with the retailers themselves.”


Marketers are less concerned with RMNs’ scalability, but focus on lack of standardization

A notable change that occurred in this year’s survey compared with last year’s is that scale has become less of a challenge for marketers than it was a year ago — 8% of marketers on average said scalability is an issue in 2024 versus 29% in 2023. This decrease could indicate that retail media networks have started to build up their targeting capabilities with first-party data and product offerings, particularly pushed ahead by the increase in competition in the retail media space. However, while it seems easier to scale RMNs due to the increased offerings and first-party customer data, many industry professionals have voiced concerns about data attribution to measure that scalability. Natalie Sexton, vp of marketing at Natalie’s Juice, outlined the company’s top concerns in an email to Digiday. “The main challenges we’ve faced with retailer platforms have been costs and tracked conversions,” Sexton said.

Similarly, Katie Williams, U.S. CMO at consumer health care company Haleon, said in an email that Haleon’s biggest challenge is measurement. “Specifically challenging is the lack of standardization in measurement guidelines across networks,” Williams said. “Even with consistent metrics like ROAS and attribution, the methodology varies across RMNs. We’ve been creative in how we overcome this kind of challenge, such as developing our own custom KPI framework that aligns to Haleon and our portfolio of brand objectives to expand beyond ROAS-only measurement. [The goal is] to be inclusive of more indicators of success given the stage in the shopper journey and the role media is playing.”

Georgia-Pacific’s Knebusch said the biggest challenge with retail media is the inconsistency of measurement across platforms. “We try to make the right investment decisions for our brands across all the different channels. I think there are now about 200 retail media networks, and it has grown just over the last couple of years. And we need to have a way to consistently measure performance,” she said. 

Knebusch summed up the connection between the need to spread marketing budgets across RMNs and measurement challenges. “That, I think, is going to continue to be the biggest challenge, especially as retail media networks grow their capabilities and want to be a bigger part of your marketing mix. If the measurement isn’t there, it’s going to be more challenging for us to be able to do that [make the right investment decisions] overall,” Knebusch said.

  • Amazon holds the majority of marketing budgets within retail media. However, competitors are making strides in the space. Walmart Connect and Target’s Roundel platform saw increased adoption from 2023 to 2024, with Walmart in particular almost doubling in percentage points from 24% of marketer respondents who said they used Walmart Connect last year to 46% who said they use it this year.
  • There is a high correlation between the percentage of marketing budgets allocated to Walmart Connect and Target’s Roundel platform, indicating that the two could be growing in lockstep with each other.
  • The majority of marketer respondents to Digiday’s survey said that they measure retail media success via commerce or sales rather than awareness metrics like impressions or engagement — 86% of respondents said commerce or sales is their primary measurement of marketing success across all retail media platforms in 2024, versus 9% who said the same of engagement and 1% who said impressions is their top success metric.
  • Though retail media has strengths as a bottom-funnel marketing strategy, the channel has started showing signs of breaking into the top of the funnel.
  • As more retailers introduce their own RMNs, marketers have had to stretch their budgets in order to balance their platform mix. Some experts have even said that this influx of new RMNs is not sustainable and can harm retailers and advertisers.
  • Scalability became less of a challenge this year for RMNs. Eight percent of marketers on average said scalability is an issue in 2024 versus 29% in 2023.
  • While scalability has become less of a challenge in 2024, standardization of data attribution and measurement in the channel have become more challenging as marketers seek to understand the impact of their investments.

Con información de Digiday

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