Agency execs call for retail media to be holistically considered beyond the lower funnel

“There’s still tremendous growth to be had in the commerce landscape,” Khan told the audience, citing the stat that more than 80% of sales are still happening in store, but less than 5% of retail media is spent on in-store media. “So if you think about that expansion opportunity for retailers to really digitize the physical experience, that is going to create tremendous tremendous growth for retail media — think about that last point of purchase.” 

In store may also be a way to bring down the expense of reaching consumers at the lower-end of the purchase funnel. “Retail media is very effective, right? It’s at one of the lowest points of in the funnel, and but it’s very expensive, so the efficiency is not quite there,” said Kahn. “So I think in a good way there’ll be a bit more balance between the effectiveness and the efficiency, which will help to actually grow the next phase of commerce media, so I think while some areas will be will come down or plateau, there will be other areas of growth like the in-store piece.”

And in an earlier session on Day 2 of the Media Buying Summit, Instrument CEO Laurel Burton talked about how all the distraction around AEO and GEO has made the industry overlook the value of websites as part of an overall commerce strategy when, to her mind, the opposite is true. 

“My prediction is the exact opposite that websites are dying,” Burton told the audience at a session on the melding of creative and tech with media. “I think they are the absolute central hub that needs to create a consistent experience because they’re feeding both that consumer and also that lanswer engine. You literally can’t be a product and a brand without this as a channel.”

Burton’s fellow speaker, Crocs CMO Carly Gomez (who happens to be an Instrument client), elaborated on Burton’s position saying the website needs to be coordinated in its messaging with other marketing channels.

“As people are discovering your brand, yes, they may come in through an LLM,” Gomez said. “But then if they want more information on your brand, their next stop either is your social media site or one of your social media handles or your e-commerce or your app. And essentially you want them all to feel cohesive and deliver the best possible experience.”

And yet, the upper-funnel brand-building side of retail media can’t be overlooked, argued Dentsu’s Khan, who pointed to the likes of CVS and Kroger as two retail media network providers who are helping to push the creative boundaries further (but didn’t elaborate).  

“It goes back to ensuring that you’re getting the incrementality and the efficiency out of it, and that it’s worth the extra dollars that you’re paying for the closed-loop measurement,” she said. “People forget that there’s so much opportunity to come back to the power of creative in retail media, and I think retail media has been relegated to this performance marketing channel. But if you think about it, with the in-store and the shopper marketing experience, you still need that unmissable creative component too.”

Having just also picked up Diageo’s shopper marketing business, Khan noted that AI-powered Media Mix Modeling (MMM) will also help bring down the cost, even as consolidation will likely reduce the total number of retail media networks out there. 

“Retail media’s boom was based on the back of closed loop measurement — this promise that you could understand with every dollar what you’re actually driving on the other side,” said Khan. “But I also believe AI has accelerated this idea of of agile MMM, or incrementality — more traditional MMM becoming more sophisticated. And so, as you think about closed-loop measurement, advertisers are investing in their own capabilities to invest across retailers and get that closed loop measurement themselves, instead of having the retailers grade their own homework. What happens is that data CPM that retailers have been charging for closed-loop measurement potentially does compress.”