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  • Writer's pictureRob Lucci

Retail Media Networks & Agencies: The Tangled Web They Weave


Computer wires in a tangled web with the words RMNs above it

The tremendous growth of retail media over the last few years has caused some brands to feel obligated to spend advertising budgets directly with retailers, sometimes leaving agencies in an uncertain position.


With the increasing competition of retail media networks (RMNs), some marketers are feeling pressure to spend advertising dollars with retailers in order to access valuable store real estate and the retailer’s first-party data. This has put media agencies somewhere in the middle, trying to maintain their agency of record role as the retailer-marketer relationship evolves.


The reality is that those relationships are much more complex because they want to sell the agency on buying more media from them. At the same time, the brands are clients of both the agencies and the retailers. They are all selling and buying from each other and are all dependent on each other in that process.


The dynamic gets even more complicated when brands can go directly to the retail media networks in some cases, potentially bypassing agencies completely to manage their spending. And greater competition within commerce is pushing brands to rethink their traditional media budgets to include more of the Retail Media Networks offerings.

 

Many brands are finding a place for RMNs within their media plans. The pressure to include these platforms is coming from competition testing out RMNs and the fact all categories are participating at some level. Brands don’t want to get left behind.

 

These partnerships are relatively new, and advertisers are still learning about each RMN and its capabilities. In some cases, RMNs are getting a larger percentage of a brand’s overall budget allocation, yet this doesn’t mean agencies are completely cut out. Some RMNs are still self-managed, and they are building agency partnerships to support the brands that are spending with them. This could possibly open the door to opportunities for media agencies to manage more of a brand’s advertising spend.

 

The rapid evolution of RMNs is also creating new opportunities with AdTech solutions that serve both sides. We are seeing more brands looking to be more innovative in their efforts, and that may not include the agency’s services any longer.

 

Experts believe this changing relationship driven by RMNs is an opportunity for agencies to rethink and strategize and adapt to make sure they are not left out of the equation. Agencies are helping clients manage through each one of the media tactics that move from managed service to self-service. The agency role going forward is focused on managing all of the pieces that fit together, while verifying each of the RMNs’ performance.

 

Our job as an agency is to hold the retailers accountable for their own media mix that they are proposing. We need to ask them how they arrived at their results, and how they got to the returns that they’re reporting. No different than we would hold any other platform to the accounting of results.

 

Agencies will still play a role, because most brands don’t have the staff or the expertise to run these platforms and negotiate buys with each RMN. The agency partnership needs to be made invaluable to both the brands and the platforms, as agencies will be the advocates for the inventory that’s available.

 

Ultimately, there is still a lot of testing and experimenting to be done. New platforms and tools are constantly changing the landscape. But on the client side, agencies need to approach it as a test and learn period to make sure they aren’t excluded.

 

Right now, because the RMN’s operate independently, there isn’t a perfect solution for any client. New tactics are tried and learned from for the next tactic that’s available at the next retailer. As an agency, you just must keep moving or you will be left behind.

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About A3 Media

A3 transforms media from an expense into a smart investment. Since 1997, we have successfully helped regional businesses launch new products, expand into new markets and increase sales through media plans that make every dollar spent do more. Our clients include brands such as Yuengling and Ashley Furniture. For more information about how A3 Media can help your digital marketing efforts, please call A3 Media at (610) 631-5500.

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