Retail Media Scale: CPG Brands’ Conundrum

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Execs Negotiating Media w Screen

HOW DO BRANDS UNDERSTAND retail media scale as they plan spending?

In previous articles in this series, we addressed the challenges CPG brands face in dealing with retail media networks. It summarized brand marketer spending trends and described why brand teams are challenged when it comes to making decisions about retail media investments across their entire distribution networks.

We discussed the struggle brands face as they endeavor to support their retail distribution networks with proportional retail media investments across all their distribution channels. With hundreds of small retailers seeking a fair share of the pie, CPGs simply don’t have the bandwidth for empirical decision-making.

Regional and independent retailers are not the only ones concerned about the concentration at the top of the Retail Media Network hierarchy.

CPGs are also wrestling with this, and the conversation is beginning to bring trading partners together in search of workable solutions which enable a fair share of retail media spending to find its way to numerous retailers who are not on the top-ten RMN list.

“The network is the piece that’s missing.”

– Adam Zimmerman, Ideal by Design House

At the handful of larger retailers where retail media is a must, joint business planning discussions have become more complicated, as CPGs work to establish new practices that incorporate traditional trade marketing along with the type of targeted messaging that retail media enables. Negotiations must now address how outcomes can be measured and what merchandising support will be required in the stores and fulfillment centers.

Needed: “Connective Tissue”

At February’s 2025 NGA Show in Las Vegas, two panel sessions were devoted to the existential challenge faced by independent grocers as they seek sufficient retail media scale (i.e., audience size) to be relevant to national brands. Wholesalers and retailer networks represented at the conference discussed their efforts to deliver targetable shopper audiences with sufficient scale and measurability to justify CPG investment.

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What’s ‘Fair and Proportional’ for a Retail Media Network?

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retail media money

HOW ARE BRANDS MANAGING their retail media network spending?

Part one of this analysis addressed the conundrum CPG brands face in dealing with retail media networks. It summarized brand marketer spending trends documented by Cadent Consulting and described why brand teams are challenged when it comes to making sound empirical decisions about their retail media investments across their entire distribution networks.

Steps toward further clarity have been initiated by FMI – The Food Industry Association, which released new research, The Evolution of Retail Media: Decoding What Works — And What Doesn’t, in collaboration with NIQ and Think Blue on Jan. 31 at its FMI Midwinter Executive Conference.

The report forecasts CPG retail media network spending will reach $27 billion by 2026, with the grocery channel commanding $6.6 billion of that total.

Write the study authors, “As RMNs increasingly tap into brand media budgets, brands and retailers must adapt to this new paradigm. Aligning investment strategies, leveraging advanced data-driven personalization, and integrating RMNs into broader business planning will be vital to fully unlock the transformative potential of these networks.”

The report calls out several key challenges that trading partners face in this regard:

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Retail Media and CPGs: How do Brands Optimize Investments?

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Question marks at the table


AMID THE HYPE AND HYPERBOLE around Retail Media Networks, some fundamental issues about CPG marketing spending have barely been addressed. Brand marketers have an opportunity – perhaps an imperative – to elevate the dialog about how funds should be allocated, to maximize returns and sustain mutually profitable relationships with retail partners.

​Ad standards are yet to be established across the RMN universe. The allure of first-party data is compelling, but each network presents its own interfaces and definitions. Established norms around trade marketing spending – the lion’s share of marketing investment by brands – are under pressure. Beneath the surface lurk issues around fairness and proportionality, too.

THIS ARTICLE IS PART ONE of a series, originally published on CPGmatters.com

Experts contacted for this article spoke mostly on background. The consensus is that RMNs are not easy to master and that best practices are yet to emerge. They introduce a heightened degree of intricacy for brand marketers and retailers alike. Some standards may be on the horizon, but trading partner joint planning is not getting any easier.

Concentration at the Top

A relatively small handful of retailers with very broad geographies and high customer counts are sweeping up the lion’s share of retail media spending and decision-making capacity. This presents steep challenges for CPG brands. Their “brand-width” is not unlimited, after all.

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Retail Media Network Gaps Hold Peril for Brands

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Retail Media Networks Mind the Gaps

JUST WHEN YOU THOUGHT the retail media conversation couldn’t get any hotter, we hear high-profile executives from the largest Retail Media Networks (RMNs) and their technology suppliers on podiums and podcasts talking up a glorious future for brand advertisers.

RMNs were a recurring theme at last September’s Groceryshop event in Las Vegas and this month’s NRF ’24 Big Show in New York promises no fewer than 24 sessions on “Retail Media” topics. No wonder – the take from retail media sales this year is projected to reach $52 billion in the U.S. market alone, according to Coresight Research.

RMNs are retailer-owned digital and in-store channels which convey messages and offers to shoppers from CPGs and other third-party businesses. They have exploded in popularity over the past few years, due to the added revenue they can attract for retailers and the personalized audiences they can deliver to advertisers.

Right now, big RMNs wield heavy clout when it comes to scooping up those alternative revenues. The most prominent – Kroger Precision Media, Walmart Connect, Albertsons Media Collective, Target Roundel, Dollar General, Instacart – can deliver audiences in the tens of millions or more. These certainly boast wide geographic coverage that is important for brands.

It’s easy to be dazzled by the scale of those audiences and the purported advertising efficiencies and targeting capabilities of their networks. Savvy advertisers must also recognize that sheer, provable reach is only the first piece of the puzzle.

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