Why retail media is still grappling with definition and spending uncertainties

No doubt, retail media is booming. But when it comes to defining measurement in retail media, (or even what constitutes as a retail media network in a sea of more than 250 RMNs for that matter) or who pays for retail media network campaigns, the industry is still figuring things out. Meanwhile, economic headwinds and tariffs loom, causing marketers to push for more flexibility in their retail media spend commitments, in which retailers have been asking for bigger commitments year over year.

On this episode of the Digiday Podcast, Amie Owen, chief commerce officer at Kinesso, a performance marketing agency within IPG Mediabrands family, breaks down how economic uncertainty impacts retail media spend negotiations, otherwise known as joint business planning (JBP), as well as what’s to blame for retail media’s present dysfunction.

Also on this episode, hosts Kimeko McCoy, senior marketing reporter and Tim Peterson, executive editor of video and audio, discuss the TikTok ban’s second extension (yes, it has been extended yet again), tariff’s trickle down effects and why agency holding companies are looking to bolster the data capabilities.

Here are a few highlights from the conversation with Owen, which have been edited for length and clarity.

Too many cooks in the retail media network kitchen

It’s all over the place when it comes to budgets because there are the sales teams at our client’s [brands] that are having the relationship with the retailer and the retailer wants us to do good work with them, and to actually increase our sales year over year. What does that look like? Then, you have the shopper marketing folks too where, from their standpoint, they want to appease from the media side, but then also the merchandizing side. And then the brand teams are saying, “What’s the ROAS? What’s the incremental return and how does that actually work on our side too?” It’s a little bit of how the clients are set up and how they actually approach it and what’s their mantra when it comes to retail media. I will tell you it’s different depending on the category and depending on how long the client has been playing in the space.

Lagging standardization

It’s hard to look at a retailer side by side without having a dictionary to understand what those retailers are saying. I got a report yesterday from a given retailer that said, “Hey, this program did really well, and we measured it and here you go. We saw incremental ROAS and you should invest more.” Well, the retailer graded their own homework. They called it incremental return, which they didn’t tell us what the methodology was, and they called it ROAS and incremental, and the industry as a whole has five or six definitions of what that actually means. It’s interesting and it opens up conversations to have with this retailer and say, as “I’m looking at it for one particular client, this is how they look at your metrics.” It doesn’t mean that it didn’t perform. It’s just one of those things where you’ve got to take a step, and it almost adds different pieces and process to the overall “Did it work, did it not work?” equation. 

‘My way or the highway‘

It’s hard to drive incremental investment year over year when the bar is already so high. Being strategic and understanding what they’re delivering for us as a client vs. for them as a retailer to benefit all parties is definitely a topic of conversation.

That needs to be a conversation with the retailer. It can’t be all bells and whistles and rose-colored glasses, because the reality is that it’s not going to be that way. You need a partner that goes along with you for the ride, not that just says, “It’s my way or the highway.” I will say that we are seeing that flexibility from the retailers because they get it. They also get the conversation of, how high is too high? Because how are we going to continue to invest in you? What else are you giving us in return?