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Mary Lague9 min read

The Rise of Retail Media Networks

Whether you’re familiar with them or not, you’ve seen retail media networks (RMNs) in action. In a physical store, on a retailer's website or app, even on streaming TV and social media.

RMNs are multichannel advertising approach by retailers to leverage their digital and physical properties to sell advertising direct to brands, namely consumer packaged goods (CPG) brands.

Retailers seem to be in a power position because they have access to first-hand, first-party data from customer purchase data that CPGs and ad agencies do not. Does that mean they’ll rise on endlessly? Or is there a treacherous landscape ahead for all involved?


Who and What are RMNs?

At the heart of it, a retail media network (RMN) is basically what it sounds like – a retail organization using their physical position and digital assets to sell advertising space directly to brands. Retailers are creating these networks that span different mediums and platforms to monetize ad space both online and in their physical stores. 

Retail media networks allow brands to connect with consumers more directly, with retailers leveraging their private first-party data to offer brands various diversified ad opportunities with a mix of engaging (and even interactive) messaging and strategic positioning. 

Shopping used to essentially mean one thing. Going in person to a retail store, finding the products you want or need, walking up to the person at the register, paying and leaving.  

Shopping shifted online, and the retail experience tried to mirror what it was like in real life. The two continue to mix together, with shopping at a store bringing in online elements, and the online experience starting to reward you for shopping in person in unique new ways.  

As the two fused together in more dynamic ways, retailers are trying to take control of the space around them, physically and digitally, leading to (cue suspenseful music) the rise of retail media networks. Retailers are also forming collaborations and cooperations with brands directly, as well as with publishers, social media companies, and streaming platforms to create in-store displays, videos, social media content, streaming TV ads, and more, 

Since retailers largely own the point of sale, more and more retailers are launching their own versions of RMNs, which presents new opportunities and new challenges for everyone involved, especially the consumer-packaged goods (CPG) industry.


Rising Social Commerce Trends

At first glance, this might seem like a big benefit for CPGs, which can now directly work with the retailers that are selling their products.  

On the flip side, it also means that more and more (and more) retailers are getting involved, which means there are a growing number of entities to negotiate, collaborate, and do business with.  

Brands will need to discover new strategies and approaches to find the best fit and ideal way to leverage this rise.  

Some are turning to collaborations beyond the retail landscape, enlisting influencers, going hyper-local in different markets, and infusing the partnerships with retailers into their RMN ad space on streaming networks and social media.  

There is some tension in the air as well. Retailers are keeping first-party data about shopping trends, consumer habits and sales data close to their vest, while brands are trying their best to get ahold of that precious data because third-party data is on the way out and less reliable than ever in the new post-cookies world.  

Audience segmentation and consumer insights are coveted by advertising brands, and CPG brands are being put in a position to rely on and trust RMNs to guide them toward optimized ad spending and target audience insights.


Importance of audience data_Wakefield
Source: Wakefield Research


Retail is Taking Ownership of the Story, and Data

It’s nothing new, really, as retail stores have always sought partnerships with brands through in-store experiences like end caps, packaged coupon deals, and most of all, the best shelf space. All the while, they’ve kept their own data and insights protected and rarely shared it thoroughly with those on the outside.  

The new story is that as RMNs cut out the middleman, it’s up to the brands to really find the best partnerships with retailers and to even curry favor so that they aren’t literally pushed to the side by their competitors. This is fueling the rapid rise of the retail media networks, and forcing CPG brands to consider how they’ll allot their marketing budgets and ad spends in 2024, and beyond.  

The biggest benefit RMNs have in their favor is control of insider insights and data, as we’ll cover more in a moment. Their inner process is called a deterministic closed-loop measurement, where they can offer advertising brands a level of knowledge they simply cannot find elsewhere.


closed-loop-measurement-googway group
Source: Goodway Group


Leveraging RMNs for Consumer Packaged Goods Brands

The way a brand will buy and run ads and look to personalize is changing faster than anyone expected and is becoming hard to predict while keeping up with it in the current day.  

RMNs do allow brands to form better consumer connections that can inspire purchases both in-person and online.  

For instance, a CPG brand can now buy ad space in-store and digitally with an RMN, such as Walmart, thus creating a brand experience that can begin in either domain and extend the other way. A customer can shop for their products online, or even just browse the digital shelf space, and be presented ads, offers, and even product listings that benefit the ad buying brand. This could incorporate coupons of offers for either online-only or even in-store only purchases, or a blend of the two.  

It extends further by having ad space in the brick-and-mortar shop optimized to showcase the brand, with the brand products on the ideal shelf area and eye level. The ads could even be displayed on the outside windows, at the entrance, and littered throughout the store in a strategic manner.  

One step further, as some retail stores start to incorporate digital screens on their shopping carts, ads could even be displayed there.  

The RMN itself could have ads on a streaming network, such as Disney Plus, and the CPG brand can buy retail ads through the RMN to have their product or brand featured in an ad. And if the RMN or CPG has a relationship with an influencer, this can stretch out to create multimedia experiences involving all aspects, including using the personality in branding in several assets.  

It paves a path for brands to super personalize the customer experience and buyer journey by being more directly involved with the retailers themselves.


RMN Challenges and Friction to Consider 

With any emerging technology, industry, or approach, there are challenges and other obstacles, both known and unforeseen.  

Since it evolved seemingly overnight in 2023, there is still a lot of unknown for both sides. For some, it’s seen as a necessary evil, almost the next evolution of trying to have a brand-specific direct-to-consumer sales platform or online portal.

The biggest challenges for CPG brands now are:

  • The competitive nature is intense and escalating, because competitors are going head-to-head fighting over the same advertising space directly with retailers  
  • Retailers don’t need to operate like ad agencies, which survey the entire landscape and try to strategize what’s best for the brand 
  • As more and more retailers opt to try their own RMN, the bandwidth for CPG brands will have to expand to explore the myriad options  
  • Retailers aren’t sharing data with brands, causing a lot of frustration 
  • There are no industry standards to measure the process, the investment, the success, the ROI, and more, leading to plenty of confusion and misinformation  
  • Forecasting what happens if RMNs start to consolidate, like so many industries, to package offers and share ad networks and space  
  • Gauging whether RMN ads could lead to an oversaturation and overexposure of certain brands 
  • How to balance between traditional ad spends and RMN

One last, big note to add to the list – a Wakefield Research report shows that CPG brands are not spending incremental money on RMNs, but rather through trade spending with deals, placement fees, and other incentives that are common in deals between retailers and CPG brands. That could mean that the spending expansion and cash flow involved is a bit overstated.

CPG brands want more from RMNs, and as those networks grow, there will have to be more compromise and agreement on many fronts, as signified in the chart below.


Interoperability and consortia_Wakefield

Source: Wakefield Research


Finding value in RMNs

At the very least, it feels necessary to get involved and test out investments with RMNs. That way, as the landscape changes again, you’ll already have some first-hand experience and insights on what works best for you, for partnerships, and you’ll be able to adapt faster in the years to come.  

Let’s run through a few current numbers and projections, to gauge why it might be worth it to invest now to be more flexible and prepared later.  

In 2023, the RMN market is predicted to generate about $52 billion dollars, and that’s expected to accelerate. Some projects have RMN spending to grow upwards toward an ad spend of $100 billion by 2026.  

RMN is expected to surpass linear TV ad spending very soon, with an increase in market share from 17.1% in 2023 to almost 27% by 2027.  

More than half of advertisers, 56%, are working with at least five RMNs, with that usage expected to increase in the next two years. However, 42% of advertisers reported questioning their investments in RMNs, thinking of it as a valuable ad tool but also as a cost of doing business today.  

It’s also important to highlight that in 2021, projections had RMN spending reaching around $30 billion, and this year’s numbers have far surpassed that already. 

Some benefits to investing in RMN include:  

  • Customizable messaging and store-specific strategies 
  • Increased brand visibility and recognition  
  • Improved targeted through understanding the different segments and audiences for specific retailers 
  • Structuring a connected RMN ecosystem with retailers 
  • Cross-promotional opportunities across digital, in-store, on streaming networks, and social media 
  • AI advancements pushing toward more performance optimization and automation to better assess the strategic partnerships 
  • Rising platforms and agencies optimizing the RMN investments for CPG brands to unify cross-retailer programs


Who are the Main RMN players?

Big and small, affordable and affluent, retailers of all varieties are starting to invest in and expand their retail media networks.  

Some of the names you might recognize:

Kroger Walgreens Uber
Amazon Lord & Taylor  Lyft
Ebay Macy’s Nordstrom
Wayfair Ulta Petco
Target CVS Costco
Walmart  Best Buy Doordash
Home Depot Albertsons GoPuff
Dollar General Marriott Drizly

Nearly every type of retailer imaginable is represented on that list. According to Forbes research, 74% of brands have budgets dedicated to RMNs. Aside from that, 64% of brands that have advertising budgets of $100 million or more say they expect to increase RMN spending.


What’s Next for RMNs and Brands?  

Brands are breaking through and finding innovative ways to take advantage of the current RMN and ad strategy landscape.  

Stay tuned for our next articles in this series on RMNs, where we’ll really dig deeper into all sides and give you some actionable examples, our thoughts, opinions, and insights. We’ll also go over brands pushing for industry standards and transparency, such as Unilever, as well as the role AI will play in filling in the gaps between the two sides.  

Want to get a head start and start finding your own unique ways to leverage evolving RMNs and audience connection opportunities catered to your CPG brand? Get in touch with us, and together we’ll find an effective disruption model guided by robust research to give you optimal opportunities to excel right now, and going forward.



Mary Lague

Mary is the VP of Research at Pilot44 and leads our research and insights group. She brings over a decade of market and consumer research expertise spanning business and product innovation. Known for her strategic insights and forward-thinking approach, Mary is dedicated to guiding brands toward successful innovation and sustainable growth. She is a seasoned advisor in helping global brands spot disruption and a trusted ally in navigating change.