As talk of recession looms, smaller brands bet on the value of retail media — here’s why

“It’s important to us to capture the attention of shoppers who are already on those platforms,” said Lauren Lovelady, founder and CEO of Each & Every. “Both of those retailers just have a ton of traffic every day,” she added, referring to Amazon and Ulta, two of the retailers with whom the fragrance brand spends its retail media dollars.

An estimated 94% of U.S. ad decision markers say they’re concerned about the impact of tariffs on ad spend, according to a recent survey conducted by the Interactive Advertising Bureau. The survey also found that nearly half (45%) of advertisers are planning to reduce overall ad spend in light of economic uncertainty.

Smaller brands, including Each & Every, Omaha Steaks and Halfday, are contending with the same macroeconomic trends as their larger counterparts. But unlike their large counterparts, small brands are often working with smaller budgets and are therefore tasked with being especially strategic about how and when their marketing dollars are spent.

Both Each & Every and Halfday are particularly keen on boosting brand awareness through their retail partners following recent relaunches that have given them new brand positioning and packaging. Each & Every has retail media spend dedicated to Ulta and Amazon’s networks, while Halfday has spend dedicated to Instacart and GoPuff. Both brands plan to increase those ad budgets going forward, but that doesn’t mean they’ll increase the number of retail media networks they partner with — at least not as talks of recession continue and consumers tighten their spending.

“It really just comes down to what’s working, what’s most effective, and going from there,” said Brian Coleman, head of marketing at Halfday.

With tariffs creating so much uncertainty, marketers say budgets are likely to hinge on efficiency to ensure there’s a return on dollars spent. Brand clients aren’t making hard cuts to budgets, at least not yet, according to Tucker Matheson, co-founder of performance marketing agency Markacy. However, marketers are likely going to start cutting back on any spend that doesn’t result in incrementality. Notably, marketers have been pushing for incrementality in the retail media space, picking apart metrics like ROAS in an effort to gain more granular insights that will help them determine campaign efficacy.

As Matheson puts it, every brand CMO should be “gut checking” retail media partners to ensure their spend is as efficient as possible. “Everybody’s probably looking at all their retail media network spend right now, including all their digital and traditional spend, and really trying to figure out: How do I get a better beat on my ROI here because I know budget cuts are coming?” he added.

Omaha Steaks is a performance-driven brand that’s currently testing into Amazon’s retail media business, according to Angie Kubicek, Omaha Steaks’ senior director of growth marketing. With consumers bracing for a potential recession, Kubicek said the brand is hedging its bets (and ad dollars) on media buys that offer flexibility — yet another thing marketers have scrutinized retail media networks for as of late.

“Right now, I won’t do anything if I can’t get out of it. That’s where my ad spend is focused,” Kubicek said. She later added, “I’ll spend it if we can prove out a true incremental read on performance. That’s the holy grail of any ad spend, is that incrementality.”

Despite all the questions around performance, incrementality and spend commitments that are looming alongside economic concerns, it seems small businesses still see retail media as an important part of the media mix.

“Our planners find that retail media networks still work well in the face of uncertainty because people still have to shop,” Munir Haddad, co-founder and CEO of ad agency Kiosk, said in an email.