Media Buying Briefing: Who controls the balance of power between retail media and media agencies?

Depending on who you ask, there are two scenarios playing out in the rapidly expanding commerce media space. 

One has retailers pressuring brands by seeking ad-spend increases on their media networks in exchange for better shelf space in stores or online. The “inside baseball” assertion is that retail media networks (RMNs) are taking advantage of their position — given that it’s in their stores or on their websites that people purchase products, and if the products are less visible, sales may get hurt.

“The inference is, brands ‘have to do’ — it’s not a ‘want to do’,” said one industry observer who spoke on condition of anonymity to speak freely. “An agent working on a brand’s behalf with such scale in commerce and retail media [as Publicis has assembled] is able to level the playing field of the buying and negotiation environment.” 

This observer’s own research shows that about three in four brand marketers are concerned about their brand in the retail environment. 

The other has brands (and their media agencies) leveraging their ad dollars as a means to secure better shelf space, or reduce spending on retail media networks if they don’t get what they want. 

“The advertiser has far more power over retail media networks than, say, over Google or Meta, or any of these massive digital advertising players,” said Jon Flugstad, head of business development, commerce media at ad-tech firm Moloco. “So you’ve actually seen a lot of exertion of that power, whether it’s pushing for standards around measurement or incrementality. It actually shows that there is more of a voice for advertisers.”

It all depends on where you stand in the relationship. But the fact is, both sides in this increasingly tense dynamic have amassed power, and they’re looking to use it to secure an advantage over the other side. 

But some of that power might be getting misplaced, argued another observer of the commerce media scene. Publicis “may be making this play around connected commerce, where they have the supply and demand side and therefore can connect the transaction to create more efficient media,” explained this observer who also declined to speak for attribution. “There’s a couple of problems here. One, the supply side value proposition is eroding. And two, on both sides, it’s tricky to serve two masters because you end up with some perverse incentives that don’t make you fully able to tell your customers that you’re totally on their side.”

The push for standards around measurement that Flugstad mentioned has actually made a little progress, as the IAB and IAB Europe last week rolled out standards and guidelines for retail media networks’ in-store media placements at its Connected Commerce Summit: Retail Reimagined. They’ll remain open for industry feedback until the beginning of November. 

“Retail media networks have already had a meaningful impact on the digital advertising industry in a short period of time,” said David Cohen, CEO, IAB. “Working in conjunction with IAB Europe, we are fostering a collaborative ecosystem to ensure that in-store retail media is properly understood and utilized in an efficient and safe manner, for all constituents to thrive in this ever-evolving landscape.”

That effort only covers in-store, however, and the bigger issue revolves around whether RMNs and agencies and brands can find common ground on a broader basis.

One complicating factor is the reality that the consumer generally no longer follows traditional notions of the purchase journey. That has stumped both sides in thinking through what used to be known as shopper marketing budgets, which were the closest an advertiser could get to the consumer when shopping. That’s all now considered performance marketing and shopper marketing budgets in many cases are being blended in with brand budgets, further muddying the distinctions within commerce media. 

“If you ask consumers about awareness, discovery or consideration, they’re like, ‘I don’t know what you’re talking about; I go on TikTok, I get exposed and I buy a product,’” said George Musi, chief business officer at Night Market, Horizon Media’s commerce and retail specialty operation. “So that whole notion of a purchase journey just went up in smoke in a second. They skipped multiple steps.”

It’s left both sides in this power struggle a bit on their heels — and therefore a bit suspicious of each other for now. But once more answers are unearthed, it seems likely they’ll find common ground. After all, commerce media has proven increasingly invaluable a tool in the marketing toolbox every year since Amazon first started 30 years ago. 

Color by numbers

Music streaming service Spotify is having a great year. WARC Media’s latest Platform Insights this month highlighted how Spotify may start cutting into video ad budgets as it expands beyond audio content. But can it compete against social media? —Antoinette Siu

Some stats:

• Spotify video ads averaged around 58% above Adelaide’s attention benchmark for online video — beating out platforms including TikTok, Instagram and Snapchat.
• Spotify’s global ad revenue is expected to reach $2.1 billion in 2024 and some $2.6 billion in 2026 — marking double digit growth in its ad business over the last six quarters.
• The company reported seeing a 44% year-on-year increase in video streams over the last 18 months, with a growing number of users watching podcast content. (Spotify totals 626 million users globally, with growth coming from outside the U.S. and Europe.)
• Spotify research also showed a 66% boost to incremental sales and 27% higher purchase intent when campaigns combine video and audio formats versus using audio-only.
• WARC Media anticipates financial services will become the third-highest spending category on the platform this year, with estimated investment reaching $339 million.

Takeoff & landing

• Performance shop Tinuiti has joined the list of media agencies officially certified as a TikTok Shop partner. 
• Active Media Services — which houses barter shop Active International, media agency Involved Media and video offering XACTV Network — has rebranded to AMS.
• Santander bank launched a review of its global creative and media, the latter of which is currently handled by Dentsu’s Carat. 
• Personnel moves: Digital agency Dept hired Andrew Dimitriou as its global chief client & growth officer; he most recently was VMLY&R’s CEO for EMEA … Stagwell named veteran PR executive Sunil John to be senior advisor for Stagwell MENA.

Direct quote

“Joining Publicis Groupe will help Mars realize our vision of being the preeminent global commerce company faster and more completely. We’re excited to have the support of Publicis to bring new opportunities to our existing clients and also to share our connected commerce solution with new clients around the globe. We look forward to writing the next chapter of commerce together.”

— Rob Rivenburgh, global CEO of Mars United Commerce, which is being acquired by Publicis Groupe. 

Speed reading

• Ronan Shields and Marty Swant continued their coverage of the trial of the century — the DOJ vs. Google — with stories that looked ahead at the next 15 years, and a rundown of some of the more gobsmacking numbers that have been unearthed during the trial.
• Jim Cooper and Seb Joseph were in Cologne, Germany last week to cover global digital conference Dmexco, and offered up a series of stories on top of their moderating duties.   
• I wrote about the haves and have-nots of late-stage political advertising, with an eye specifically toward whether digital OOH is picking up a larger share of the $12 billion in play. 
• Krystal Scanlon got the inside take on X’s latest outreach to advertisers and agencies when it hosted them in an upfront-esque meeting in New York.