Retail Media a “have to buy” media, as brands doubt brand building capability: ANA survey

Retail media is emerging as a critical new medium for certain brands, but a new survey from the ANA indicates that there is a very specific profile of advertiser using these new networks and many are far from convinced, even if there is optimism about their future.

Why it matters

In 2022 it felt like every week a new retail media network (RMN) would appear, as retailers responded to emerging new factors in the space: Amazon’s rise as a retail media giant, the deprecation of the third party cookie and the need for first party data, or the promise of double digit profit margins on advertising revenues all attracted some of the largest retailers to the space.

However, a frothy market with its many vendors has created complexity and confusion among marketers, with the ANA’s Retail Media survey of its members suggesting that a common measurement currency is still lacking, as is a verdict about whether it’s just a sales driver or also a capable brand builder.

What’s clear is that this is an obvious strategic step for retailers, but among advertisers the medium is yet to reach its full potential.

CPG focus

According to the ANA’s report, which you can find here, the vast majority (74%) of respondents who were using retail media came from the Consumer Packaged Goods industry, way more than the next industry of Health and Beauty (8%).

In total, it surveyed its 138 members, 80 of which currently use RMNs. Of those, over half (56%) are spending on five or more retail media platforms. 58% say they will increase their spend in the next two years.

Reluctance

RMNs are something of a “have to buy” rather than a “want to buy” for some marketers. Most brands (61%) are taking their RMN spend from existing budgets, while three quarters of respondents say they have used retail media to drive sales rather than to build brands, leading to concern among some respondents.

“If we just keep reaching the people who browsed our pages before, bought our products before, we’ll never grow our business or bring new people in,” warned one CPG marketer.

Whereas just 12% of respondents say they are spending on RMNs to invest for future brand growth.

Over half (57%) of respondents reported a lack of standardisation across platforms, and others the ability to compare results with other media. “This is limiting growth for both the advertisers and the retail media networks,” writes the ANA.

Pressure

With existing relationships in the space – “buyers have become sellers and sellers have become buyers, resulting in a two-way flow of transactions and revenues,” as the ANA puts it – 85% of brands felt pressured by retailers to support retail media networks.

However, there is also a vote of confidence in there, with some brands considering them foundational media. “They are seen as recession-proof, less prone to budget cuts in more challenging economic times, and a way to counter potential shopper shifts to store brands.”

Sourced from the ANA