As we head into 2023, the big topic for consumer-packaged goods (CPG) brands is retail media networks and how they are going to affect budget allocations.

Retail media is an area of advertising that is just beginning to realize its potential: After two banner years in 2021 and 2022, US digital retail media ad spending is expected to continue its meteoric ascent into 2023, growing 25.8% to $51.36 billion—accounting for more than 18% of total digital ad spend. Dozens of retail media networks have come onto the market in recent years, with virtually every leading digital marketplace, mass merchandiser, national grocery chain, category-specific retailer, and delivery provider getting into the game.

Here are three considerations CPG advertisers should make as they leverage retail media networks:

1) Maximize their troves of first-party data

Interest in retail media is driven by the promise that brand advertisers can access their troves of first-party shopper data to better target and measure ad campaigns, all while placing messages closer to the point of sale. The question, then, is how you can utilize that valuable consensual data to better engage consumers so you can build out your own zero and first-party data collection strategies? This is a critical piece of the advertising puzzle in the cookieless future present.

2) How are retail media networks going to be funded?

One of the big problems facing CPG brands right now is how to finance each network. Think about ways you can create mutually beneficial programs with your partners across brand, product, and sales so that funding can come from each group as opposed to straight out of the marketing budget. Another option: shifting ad dollars from channels on which you would normally do direct buys.

3) Do they offer what you need?

Evaluating whether and how to use a retail media network should depend on your brand’s needs. Do you simply need coverage at the point of sale? Are you looking to create a comprehensive omnichannel experience using the network’s audience data across display and social? What level of analysis into ROAS, SKU-level sale data, and digital shelf optimization do you need? Identifying the solutions that will create holistic campaigns across multiple channels and retailers will enable your dollars to stretch further.


Want to learn about some of the macro trends affecting digital marketing more generally? Check out our 2023 Trends Report to stay ahead of the curve as you plan for the year ahead.

Imagine you’re shopping online. Maybe you’re hunting for a new vacuum on Amazon, or simply placing a pick-up grocery order from Kroger (or Smith’s, Fred Meyer’s, Dillon’s, King Sooper’s—whatever it’s called where you live).

You log in to the website (or the app, if you’re on-the-go), and are met with a seemingly endless selection to choose from. Case in point: a simple search for “vacuum” on Amazon generates over 3,000 results, and “cheese” on Smith’s yields over 8,000. Talk about options!

As you’re perusing, you’re consistently presented with alternatives. When you click on a specific product, you see at least two similar products on that same page. And as you move to the online checkout, you’re shown more and more complementary and alternative items that you can “quick add” to your cart.

Much of this phenomenon is thanks to the growth of retail media, or advertising within retailer websites and apps.  

Due to the growth—or more aptly, explosion—of retail media, many advertisers find themselves wondering: how can I effectively embrace this new(er) channel?

Today, we’re here to break it down for you. We’ll cover the growth of retail media over the past few years, the challenges it presents, and how marketers can incorporate it—without throwing their existing strategies out the window.

Let’s dive in.

1. Retail media is booming

Retail media is following in the footsteps of search and social as the “third big wave” in digital advertising—eMarketer has even gone so far as to pronounce 2022 “the year of retail media networks.”

Just how big is this wave? Here are some stats to know:

What’s driving this explosive growth? Here a few key drivers:

At this point, many advertisers might be thinking, “Cool! Sounds like retail media is all that and a bag of chips.”

But focusing solely on its strengths (and ever-growing popularity among advertisers) doesn’t paint a complete picture of this new and evolving channel.

Which brings us to our next point:

2. Despite its explosion, the retail media landscape is fragmented and complex

Though its growth has been significant over the past few years—and for good reason—retail media presents distinct challenges for advertisers. Perhaps the most notable?

frag  ment          ation     !

Remember when we said that most major retailers now have their own retail media networks? Though this means there’s a lot of inventory available, it also means that advertisers are working with many different platforms to access each retailer’s distinct offerings. And when it comes to monitoring campaign performance, tracking conversions, reporting, and billing, these many disparate sources of inventory (and thus, data) further complicate things.

3. As such, savvy marketers are embracing retail media as part of an omnichannel strategy

Retail media is an impactful, relevant way to reach consumers when and where they’re ready to purchase. So, should advertisers abandon other channels and dump all their resources into it?

In short: No.

To paraphrase an old cliché, advertisers shouldn’t put all their eggs in the retail media basket. Especially since that basket is actually made up of several smaller, distinct baskets that don’t always share information well with other baskets. A messy metaphor, we know—but you get the point!  

Because of this fragmentation—not to mention the fact that channels like search, social, video, audio, display, and native are also critical for reaching consumers at different stages of the purchasing journey—advertisers should look for ways to incorporate retail media as part of a holistic omnichannel digital media strategy.

And though some retail media networks offer extensions to tap into these channels, marketers lose the ability to apply targeting elements and run different tactics when going through a retail media network. Though it might seem like a solution to the fragmentation we mentioned, it would likely end up being more time-consuming (not to mention, more costly) to use these extensions.

Alright, back to the need for a balanced approach when using retail media. So, what might an effective, holistic campaign look like? It might, for example, focus on building broad awareness of a product through CTV advertising, move consumers further down the purchasing funnel through retargeting via search or social, and finally use retail media to convert customers as they evaluate their options on a specific retailer’s site.

The key here is intentionality: Retail media is a great way to personalize a customer’s ad experience, but it will likely fall short if it’s the only type of ad your consumer encounters.

Alright, quick check in: How are you doing? Feeling pumped? Excited? Hopeful? Or maybe a bit…overwhelmed? Stressed, even?

Happy Parks And Recreation GIF

If adding another channel to the mix makes you feel like this ^^ (even when that channel is one with as much growth and potential as retail media), we get it.

Today’s digital media landscape is already so complex, and this is yet another channel to add to the mix.

Which leads us to our fourth and final point:  

4. Amidst this complexity, the need to simplify is significant

Retail media is one more piece of complexity in a digital advertising world that’s already stunningly complex. For advertisers looking to embrace this new channel, simplifying your digital advertising and digital media buying is what’s going to set you up for success.

This is especially true if you’re using a different point solution for each channel. If you’ve got one platform for CTV, another for programmatic display, another for social, and you add another (or five) for retail media, how are you going to have the time to effectively launch, monitor, and adjust each of them? (Not to mention what it would look like during reporting and billing—yikes!)

Luckily, solutions like advertising workflow automation exist. For digital advertisers, workflow automation offers the opportunity to unite many channels into one platform that handles every stage of a campaign through a single sign-on. By using advertising workflow software, advertisers (especially those beginning to dabble in retail media) can reduce manual, redundant labor and ensure their data is consistent and centrally located.

Retail Media: Wrapping up

As retail media continues to add to the complexity of the broader media landscape, marketers will need to find ways to adapt to that complexity. Digital advertising automation is a powerful solution for minimizing tedious tasks and streamlining media buyers' workflows. From planning, to billing, to reporting, digital advertising automation simplifies the campaign process, creating valuable efficiencies and allowing teams to focus on what’s most important: strategy and outcomes.