Ad spending on retail media networks (RMN) is projected to extend 26% this yr to almost $55 billion, in accordance with a brand new study from the ANA. Despite this, it’s clear advertisers are still hesitant concerning the channel.
RMNs have attracted a variety of attention prior to now few years, partly due to the extraordinary proliferation of recent entrants within the channel. Even so, the share of ANA members using them has remained relatively flat, 58% last yr and 60% in 2024. The same is true for upcoming use: 87% said they were unsure/weren’t going to make use of them, a 3 percentage point drop from 2023.
The overall increase in RMN spending is because fewer marketers are spending significantly more on the platforms. The variety of marketers adding additional retail media platforms is declining, with only 35% saying they will probably be using more, down from 58% in 2023.
Furthermore, there was a big drop in advertisers using Amazon Advertising, the industry’s leading RMN (accounting for some 77% of all retail media spending). Only 61% are using it, in comparison with 82% a yr ago.
Part of that is as a result of the dearth of standardization in measurement amongst different channels. As one responder put it, “Very essential to push retailers on measurement requirements to advertiser’s standards to be on parity with other media outlets.”
Dig deeper: 3 challenges for marketers as retail media networks evolve
However, it is vitally telling that many advertisers see RMNs as a “have-to-buy” versus a “want-to-buy.” While 41% see them as a useful marketing tool (up from 31% in 2023), 35% are “meh” about RMNs and 23% see them as a value of doing business. Also, 63% of brands said retailers’ influence was “a variety of the explanation” they used them.
Even so, advertisers are optimistic concerning the way forward for the networks. Two-thirds expect them to turn into a precious marketing tool inside two years. That is partly due to the continuing work towards measurement standards. It can be a mirrored image of marketers seeing more opportunities throughout the RMNs. While once viewed as a strictly transactional tool — focused on incremental sales and lift, now 68% of advertisers use them for mid- and upper-funnel communications and national brand/equity plans.
The full report might be found here (Registration required).
Why we care. Marketers, especially CPG corporations, initially viewed retail media networks as a business cost with established partners. They have since recognized them as effective sales drivers and potential full-funnel partners. While primarily seen as sales tools, many marketers now consider retail media can enhance consideration and awareness. The importance of RMN first-party data is critical.
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