A new ANA report on retail media networks characterizes marketers as “reluctant buyers” who embrace RMNs with mixed feelings.
The study (titled, “Retail Media Networks: A Forced Marriage or Perfect Partnership?’) revealed that brands view RMNs as “have to buy” versus a “want to buy.”
A survey underpinning the report found that 88% of respondents believe they are somewhat or heavily influenced by retailers to buy advertising on their RMNs. The survey conducted last summer polled 138 members, 80 of whom utilize RMNs. A follow-up qualitative survey was also used to gather additional insights for the report.
The report found that a majority--two-thirds of respondents—use RMN’s “to drive conversion (sales)” as the most important objective. Only 12% indicated “to invest for future brand growth” was the most important objective.
In the report, a retail media network is defined as a network of digital channels owned by a retailer that allows marketers to purchase advertising space directed by the retailer’s first-party data to targeted shoppers and prospects. Retail media advertising can include online display advertising and paid search across retailer assets, as well as off-site display, video, and social placements (i.e., to other web and social sites) targeted by the retailer’s first-party data.
“The rapid proliferation of RMNs have made them a must-buy media platform for brands, yet they have also created more marketing decision-making complexity for advertisers,” said ANA CEO Bob Liodice.
The report attributed the increased spending and overall growth of RMNs to a relatively recent confluence of technological, privacy, and behavioral shifts in society, including:
Respondents also said spending on RMNs was not incremental and was being shifted to RMNs from existing budgets for shopper marketing, brand marketing, and trade spending.
And there is concern that those shifts would result in an emphasis on driving short-term sales at the expense of building brand equity.
That said advertisers are optimistic about the future of RMNs. Most brands said they expect that both their investment in RMNs, and the effectiveness of their programs will increase in the coming years. 52% believe RMNs will be viewed more positively as a “valuable marketing tool” in the next two years, compared to 31% currently viewing RMNs that way.
The report also found:
The full report can be accessed here.
eMarketer has projected RMN ad revenue will reach $52 billion in 2023, and $61 billion in 2024, capturing one in five digital ad dollars spent by marketers.