The Latest Frontier: Retail Media
Navigating Retail Media Networks: Maximizing Transparency and Strategic Value
Retail Media Networks (RMNs) have rapidly become a critical component of the advertising ecosystem, already capturing 10% of global ad budgets with projections indicating they will surpass traditional TV by 2028. Despite their rising prominence, RMNs present unique challenges for marketing procurement teams related to transparency, efficiency, and accurate measurement of return on investment (ROI). At recent event hosted by Women in Marketing Procurement, and sponsored by RAUS Global and AlixPartners, an expert panel explored these issues, offering actionable insights into how procurement professionals can strategically manage and optimize retail media spend. The panelists were Helen Trad, Director of Retail & Media at AlixPartners, Libra Balian, Director of Marketing Procurement at AlixPartners, Fiona Foy, Partner Americas, Media Marketing Compliance and Victoria Potter, Director, ECI Media Management. The panel was moderated by Christine Moore, Founder and Managing Partner of RAUS Global.
The Rise of Retail Media Networks
The explosive growth of retail media networks stems largely from shifts in consumer behavior, particularly the acceleration of online shopping driven by the pandemic. As Victoria Potter from ECI Media Management explained, “The promise of RMNs lies in their ability to leverage first-party data and measurable outcomes at the point of sale, thus closing the loop between ad spend and consumer purchases.”
Helen, a former leader at Amazon Advertising and current Director of Retail Media at AlixPartners, added another dimension, emphasizing retailers’ financial incentives: “Retailers have embraced retail media due to significantly compressed margins. Networks like Walmart can operate at margins between 70–90%, making them highly attractive revenue streams.”
Procurement’s Strategic Role in Retail Media
Procurement professionals find themselves at a pivotal intersection, uniquely positioned to maximize efficiency and transparency in retail media spend. Fiona Foy from Media Marketing Compliance highlighted the complexity and internal dynamics, noting, “There’s a complex organizational structure internally and externally, and marketing procurement’s ability to view these relationships holistically makes them ideally placed to manage and drive significant value.”
Yet, as Libra pointed out, “Too many brands accept retail media proposals without questioning whether the suggested spend aligns with their own strategic goals. Retailers will inevitably suggest higher budgets year after year, but procurement should counteract this by demanding a bottom-up, internally driven budget justification.”
Optimizing Investments and Auditing Performance
Given the infancy and complexity of retail media networks, performance auditing becomes crucial. Fiona emphasized, “You must be able to audit retail media. It’s not just digital; it encompasses in-store and point-of-sale advertising. Without auditing, you’re simply taking agencies and the retsilers at their word.”
Victoria further underscored the importance of measurable KPIs: “Clear, standardized KPIs are essential. Without these, it’s impossible to measure effectiveness accurately. Ensure these KPIs are explicitly outlined in your contracts.”
It becomes ever more complicated as the KPIs vary across many of the Retail Media Networks, making cross RMN comparisons almost impossible. Here, marketing procurement can take the lead and develop KPIs that can then be implemented across the many partners brands often have.
Helen, from AlixPartners, added, “Retail media should not be viewed in isolation. It must be integrated into your broader media ecosystem, ensuring your spend is optimally balanced across channels. Demand incremental testing and standardized metrics to accurately assess true value.”
Direct vs. Agency-Led Retail Media Buys
A key decision for procurement is whether to manage RMN spend directly with retailers or through agency partners. Fiona advised that both approaches have distinct advantages: “Direct relationships offer potential savings by eliminating intermediary fees, granting deeper first-party data access and better retailer relationships. However, agencies can offer strategic oversight and integration with broader media strategies.”
Often clients with strong internal negotiation power and skill, can do a better job than external partners can. You can be more specific and customize your demands as you know exaclty what the Brand wants to achieve.
Victoria concured, advocating a hybrid model: “Leverage internal capabilities for strategic negotiations directly with retailers, while agencies provide campaign-level optimizations and broader media integration.”
Final Words — Seizing the Opportunity
The panel stressed procurement’s critical role in shaping the future landscape. Fiona drew a parallel with social media’s early days, urging, “Just as social media required standardization for effective measurement, procurement must insist on transparency and consistency from retailers to avoid another opaque ecosystem like programmatic buying.”
She encouraged procurement to “ask hard questions of retailers, agencies, and internal teams alike”. If marketing procurement can establish clear KPIs, rigorous audits, and transparent reporting standards now, while the retail media landscape is still malleable, the future will be a lot less disperse and be the wild west it currently is.
Key Actionable Steps for Procurement Leaders:
- Demand Transparency: Require detailed disclosures of first-party data usage, measurement methodologies, and optimization tactics.
- Standardize Metrics: Push for standardized measurement and incremental testing to accurately evaluate RMN effectiveness.
- Negotiate Strategically: Challenge retailers’ top-down budget proposals with internally driven, bottom-up approaches.
- Audit Regularly: Conduct comprehensive audits to ensure campaign delivery, compliance, and ROI.
- Employ Hybrid Models: Balance direct retailer relationships with agency expertise for optimal oversight and efficiency.
