Ad spending on retail media networks (RMN) is projected to increase 26% this year to nearly $55 billion, according to a new study from the ANA. Despite this, it’s clear advertisers are still hesitant about the channel.
RMNs have attracted a lot of attention in the past few years, partly because of the extraordinary proliferation of new entrants in the channel. Even so, the percentage of ANA members using them has remained relatively flat, 58% last year and 60% in 2024. The same is true for upcoming use: 87% said they were unsure/weren’t going to use them, a three percentage point drop from 2023.
The overall increase in RMN spending is because fewer marketers are spending significantly more on the platforms. The number of marketers adding additional retail media platforms is declining, with only 35% saying they will be using more, down from 58% in 2023.
Furthermore, there was a significant 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, compared to 82% a year ago.
Part of this is due to the lack of standardization in measurement among different channels. As one responder put it, “Very important 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 very 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 cost of doing business. Also, 63% of brands said retailers’ influence was “a lot of the reason” they used them.
Even so, advertisers are optimistic about the future of the networks. Two-thirds expect them to become a valuable marketing tool within two years. That is partly because of the continuing work towards measurement standards. It is also a reflection of marketers seeing more opportunities within 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 can be found here (Registration required).
Why we care. Marketers, especially CPG companies, 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 believe retail media can enhance consideration and awareness. The importance of RMN first-party data is significant.
