March 9, 2022

2 minute read

 

Amazon’s ascent to $31 billion in advertising revenue has driven every retailer to launch a media network.

 

It’s difficult to overstate the impact this will have on consumer brands.

Organizations are transformed:

  • Artificially constructed silos that pigeonhole teams into activating on only certain channels (e.g. social media or retail media) will be replaced with outcomes-based structures (e.g. grow awareness or grow sales).
  • Retail media specialists will become common and brand marketers will become literate in retail media.
  • Each account team will have a clear understanding of their account’s media platform capabilities and how it fits into achieving their company’s goals. Similarly, the CMO will understand individual retailer requirements for minimum and preferred investment amounts.

Retail programs are reset:

  • It is highly unlikely brands can accept retailers’ desire for 100% incremental funding into new retail media options.
  • The programs often lack scale and retailers struggle to demonstrate a clear incremental sales lift.
  • More realistically, brands will contribute some amount of incremental funds and shift a portion of their in-store activations into new digital activations.

Prioritization becomes essential:

  • While Amazon will be the first priority (most traffic + best ad tech), a clear framework will outline company goals and identify the role each retail media platform will play in achieving those goals.
  • “Commercial awareness”, or how retail media efforts fit into broader negotiations with the retailer, will become a critical element in evaluating budget requests.
  • Technological developments will develop over time, bringing data transparency to the relative returns available across platforms.