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The strategic significance of retail media is undeniable, but while 80%<\/strong> of agency executives say that they view retail media as an exciting opportunity to stand out in a crowded marketplace, only 41% currently consider it a core part of their media strategy<\/strong>, according to a new survey by Infillion. Indeed, retail media networks (RMNs) still account for only 5%<\/strong> of media budgets among the executives surveyed.<\/p>\n The hang-up seems primarily to be a lack of infrastructure<\/strong>, with measurement capabilities and scalable cross-channel execution<\/strong> topping the list of barriers \u2014 not unusual for a still nascent media offering.<\/p>\n \u201cI was surprised by just how \u2018in progress\u2019 so many aspects of retail media are,\u201d said Jeremy Woodlee, General Manager of Enterprise at composable advertising platform Infillion in an interview with Retail TouchPoints<\/em>. \u201cThe report validates its importance \u2014 as we\u2019ve heard in industry news and at every event, RMNs are a very strategic and valuable part of so many brands\u2019 advertising. However, it\u2019s still a media type going through incredibly rapid change and evolution, such as the growth of CTV, the need for measurement standardization and the importance of offsite. It\u2019s rare for something to become this important, this fast, with so much willingness across the industry to navigate the early stages. <\/strong>It\u2019s a clear validation of just how valuable RMNs have become.\u201d<\/p>\n Infillion surveyed 58 <\/strong>agency professionals directly responsible for buying retail media to understand how current dynamics such as planning mindsets, budget structures and organizational silos are shaping retail media investments.<\/p>\n RMNs\u2019 promise of precision targeting, closed-loop measurement and contextual relevance are, without a doubt, appealing to advertising executives, but technical barriers and silos (both internal and external) are currently stifling investment<\/strong> \u2014 so much so that \u201cone of the most surprising findings in this research was just how difficult it was to conduct the survey,\u201d reads the report\u2019s introduction. \u201cAsk five different agencies about their retail media strategy, and you\u2019ll get five different answers, reflecting a space with no one-size-fits-all approach<\/strong>.\u201d<\/p>\n Indeed, the current challenges hindering retail media spend aren\u2019t relegated to the ranks of the medium\u2019s operators. Agencies\u2019 internal dynamics also are lagging, which Infillion saw as evidence \u201cof a channel evolving faster than traditional team structures can keep up.\u201d<\/p>\n The findings are a testament to retail media\u2019s rapid growth and potential, as well as the pain points that will need to be solved in order for it to become a dedicated part of the full-funnel advertising mix. Lest we forget, retail media is still young<\/strong> \u2014 while Amazon launched its ad business in 2012, it was another decade before it became a business model that other retailers seriously considered.<\/p>\n Now that it\u2019s here, agencies and brands are champing at the bit to take full advantage of the retail media opportunity \u2014 and often being met with frustration: \u201cThe appetite for full-funnel retail media is already here, but the infrastructure to support it is lagging<\/strong>,\u201d said Liz Weinsten, VP of Marketing at Infillion in the report. \u201cUntil RMNs close these gaps, ambition will continue to outpace adoption.\u201d<\/p>\n But just as retail media\u2019s rise has been swift, Woodlee foresees quick maturation: \u201cMost of the major trends in RMNs will drive fixing those issues in time<\/strong>,\u201d he said. \u201cMoving beyond trade marketing budgets to brand budgets for endemic brands; becoming more relevant to more brands, either through new media networks with new endemics or by offering solutions for non-endemic brands; growing offsite media buying with audiences in places like CTV.<\/p>\n \u201cIn each case, things like standardized measurement will become more and more important<\/strong>,\u201d he added. \u201cThe RMNs have their hands busy launching the foundational elements and activating brands, but they are quickly turning to making that experience very smooth for brands, and that will make things better, quickly.\u201d<\/p>\n The picture becomes even more muddled as companies adjacent to retail \u2014 in sectors like travel, services and payments, such as PayPal<\/strong>, Re\/Max<\/strong>, Uber<\/strong> and United Airlines<\/strong> \u2014 launch their own media networks and expand the ecosystem from retail media to commerce media<\/em>.<\/p>\n But Woodlee said that the impact of these newer entrants still remains to be seen: \u201cIf anything, they should accelerate the breakdown of silos,\u201d he said. \u201cEven more media environments relevant to even more brands \u2014 it\u2019s becoming harder and harder for media buyers to silo RMNs\/CMNs into specific teams and use cases.<\/strong> It\u2019s more than trade marketing, more than pure performance marketing and more than search marketing. It\u2019s kind of everything \u2014 full funnel, in other words.\u201d \u00a0<\/p>\n When it comes to full-funnel, three<\/strong> areas have been of particular interest in recent years: CTV<\/strong>, in-store<\/strong> and offsite<\/strong>. But while CTV has emerged as a breakout format<\/strong>, adoption of the much-lauded in-store retail media remains slow, at just 2%<\/strong> (compared to 23%<\/strong> for CTV).<\/p>\n \u201cSo many of the brands (CPGs especially) driving the adoption of retail media are also very big TV buyers,\u201d explained Woodlee. \u201cI think it\u2019s natural for them to see the value of CTV in terms of driving brand awareness and other upper-funnel goals. RMNs allow them to easily, organically connect upper-funnel advertising to real lower-funnel goals. I\u2019m surprised it\u2019s not growing faster.\u201d<\/p>\n The same cannot be said for in-store retail media, but it\u2019s quite likely that that is related to the familiarity of the channel: \u201cRMNs are prioritizing in-store because these media surfaces are incredibly unique and special \u2014 it\u2019s natural that they\u2019d lead\u00a0with something that was differentiated,\u201d said Woodlee. \u201cBut it takes time for brands and agencies to test, adopt and scale new formats<\/strong>. Plus, I bet there is some real friction from how similar in-store retail media is to traditional trade marketing placements (e.g. endcap promotions).\u201d<\/p>\n In fact, the report found that while in-store media ranks high in strategic planning because it sits closest to the point of purchase, many buyers have found that in-store currently lacks the scale, measurement and tools needed to justify significant spend today<\/strong>. Buyers aren\u2019t dismissing in-store \u2014 they\u2019re simply waiting for it to catch up.<\/p>\n As advertising technology advances, a new ad type is emerging that will be particularly beneficial to retail media \u2014 shoppable ads across CTV, display and video<\/strong>. While this segment currently represents just 5%<\/strong> of RMN investment, it\u2019s projected to grow to 18%<\/strong> by 2026. \u201cThe opportunity lies in making the path from inspiration to purchase seamless within the ad experience itself,\u201d the Infillion report declares. \u201cAs creative capabilities expand, shoppability is becoming a feature, not a format, unlocking new value across the entire funnel.<\/strong>\u201d<\/p>\n Check out the full report \u2014 Getting Real About Retail Media: Unfiltered Perspectives on Advertising\u2019s Next Big Opportunity \u2014 for a raft of additional insights into agency buyers\u2019 attitudes and actions, including:<\/em><\/p>\nRetail Media: \u2018A Medium in Flux\u2019<\/strong><\/h2>\n
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Retail Media Ambition Currently Outpaces Adoption<\/strong><\/h2>\n
Entrance of Commerce Media May Help to Break Down Silos<\/strong><\/h2>\n
CTV, In-Store Diverge in Agency Uptake<\/strong><\/h2>\n
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Area to Watch: Shoppable Ads<\/strong><\/h2>\n
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