Will Retail Media Networks Ever Get Into Brand Ad Budgets?

Retail media networks are on a roll. Ad revenues are expected to increase 9.9 percent to $125.7 billion in 2023 making retailers’ websites the third-fastest growing channel for advertising, according to a new report.

GroupM’s 2023 Global Mid-Year Forecast puts retail media’s growth behind digital out-of-home and CTV, which are a fraction of its size. The media buying agency forecasts that revenues from retail media will surpass television ad revenues, including CTV, in 2028.

A separate report from eMarketer projects that retail media ad sales will grow 19.7 percent this year to $45.15 billion. Annual growth is forecast to accelerate in the coming years leading to ad sales rising to $106.12 billion by 2027.

The dollars flowing into retail media coffers continue to be dominated by trade funds. A study of 500 consumer packaged goods marketers by Wakefield Research found that 64 percent planned to increase their retail media spending with most of those funds coming from the sales promotion side. Eighteen percent of CPG’s total ad budgets will flow into retail media networks this year.

Results from Association of National Advertisers (ANA) members earlier this year found that 88 percent felt pressured to buy ads on retail media networks. Forty-four percent said retailers exerted “a lot” or “complete” pressure to get media buys. Forty-one said retailers had some influence on purchasing, and eight percent said a little.

The report said that those interviewed said that using RMNs was rarely a “choose to use” decision but a “have to use” one. Numerous factors influence buying decisions including product sales, shopper marketing, and joint business planning goals.

Search has driven the “lion’s share” of retail media ad spend, according to an article in March by Andrew Lipsman, principal analyst, of Insider Intelligence.

Mr. Lipsman foresees retailers being able to reach into CPG brand budgets going forward with the evolution of retail media networks (aka RMN 2.0).

“As RMNs get serious about using first-party data for targeting display, video, and streaming TV ads—often by partnering with third-party publishers and media companies—brand dollars are migrating into these formats. That means retail media will become as much about branding as it is about performance advertising,” he wrote.

Fifty-three percent of advertisers in the Wakefield study said that they purchase retail media to reach a wide audience of consumers. Forty-seven percent do it to target a specific audience.

Credit: https://retailwire.com/discussion/will-retail-media-networks-ever-get-into-brand-ad-budgets/

Leave a Reply

Your email address will not be published. Required fields are marked *