CPG

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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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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