What Google’s third-party cookie left turn means for retail media’s growth spurt

“Does it take a little bit of the pressure off [to find alternative identifiers]? Sure,” said Jennifer Kohl, chief media officer at VML ad agency. But, she added, “We have to keep waiting because you never know when Google is going to issue another statement that might be, maybe not a complete 360, but a little left turn.”

By the end of this year, global retail media spending is set to surpass $150 billion, according to the World Advertising Research Center (WARC). That figure represents a nearly $18 billion jump from the 2023 total. Agency execs said they expect that growth to continue, given retailers’ first-party data remains valuable and offers marketers real-time information about customer shopping habits.

“Ultimately it [Google’s cookie deprecation decision] buys a bit of time, a temporary relief, I suppose. But ultimately, the road has already been started,” said Callen Johnson, digital media operations director, SMG, a network of specialist commerce agencies.

The current pitch for retail media networks is that they’re brand-safe environments, first-party data treasure troves, and an opportunity for an advertiser to show up closer to the point of sale. Regardless of Google’s cookie apocalypse, that pitch holds true, said Ethan Goodman, evp of digital commerce at The Mars Agency. Retail media networks are still better equipped to connect advertisers with audiences than other media providers and networks, he added. 

“Whether cookies continue to exist or not, that first-party data is still better and of higher quality than a lot of the data that’s available otherwise,” Goodman said. “If anything, many of our clients are projecting that they’re going to be flat to increased on retail media going forward.” (He did not provide specific retail media spend figures.)

Since Google first announced its cookie deprecation years ago, marketers knew they would have to start weaning themselves off of their reliance on Google’s cookies. A deadline for the cookie deprecation was looming, putting the wheels in motion to find alternative ID solutions — at least that was the case for some marketers. For years, the tech giant’s timeline to decimate cookies was shrouded in uncertainty and some marketers remained reliant on cookies even up until this June.

Clients aren’t shifting dollars or attention back to third-party cookies, at least not yet, according to Goodman. Notably, marketers have yet to be able to read the tea leaves on Google’s cookie plan going forward and if online users will opt into cookie tracking. 

Retail media’s growth spurt was supercharged by Google’s third-party deprecation plans, turning marketers’ attention to first-party data. Major players in the space, like Amazon, Target’s Roundel and Walmart Connect, saw competition from smaller, even regional, players like 7-Eleven, Dollar Tree and Hy-Vee grocery chain.

Digiday spoke with four retail media networks for this story, including CMX (CVS Media Exchange), Uber’s ad business, TripAdvisor Media and Sam’s Club Member Access Platform (MAP). None of these say they plan to change their pitch to advertisers in response to Google’s third-party cookie about-face. 

“I would say our pitch remains consistent,” said Ryan Burns, Sam’s Club MAP head of strategy. “Nothing changes for us because we have that [first-party data offering] steadfast regardless of what happens in the market.” 

However, according to Kohl and Goodman, Google’s reversal could mean a slowdown in how many retailers flood the marketplace with ad network offerings. The industry has debated if retail media networks will continue to see growth as trade marketing budgets become more exhausted. (Trade marketing budgets are dollars companies spend with retailers to promote their products and boost sales.) With that in mind, some retailers, including The Home Depot, have started vying for brand marketing dollars as opposed to trade marketing dollars.

“As the budgets grow bigger, they’re going to continue to be under scrutiny to prove that the return is there. I think that’s probably the biggest hurdle that they’re facing right now,” Goodman said. 

—Digiday marketing reporter Sam Bradley contributed to this report.