Buying Retail Media Off-Site Creates Transparency Woes

The proliferation of retail media networks has turned ecommerce sites into advertisers and, increasingly, into a version of media agencies. But that transition comes with its own set of challenges. Retail media has attracted ad dollars partly because it promises brands they can reach consumers right at the point of purchase. As the sector grows, brands are also looking to target this valuable audience on platforms outside of retailers' own sites and apps: A soda brand might want to find Walmart shoppers on Facebook, Disney+ or across the open web. Buying retail media off-site promises to help advertisers reach audiences more effectively, but it also risks exacerbating two industry problems: the lack of transparency in programmatic buying and lack of standardization in the relatively immature retail media sector. “Most of the time, the retailer controls the media buy,” said Michelle Dooley, founder of retail media-focused Catalyst Media Consulting. “A brand or advertiser is putting a lot of trust in that retailer that they’re going to buy the right media.” U.S. ad spend on off-site retail media network inventory is projected to grow to $11 billion this year, to account for 18.5% of all retail media network spend, according to October 2023 estimates from Insider Intelligence. Recently, major retail media players have inked deals with large media companies to make their audiences available off-site, such as Amazon's partnership with Meta and Snapchat in 2023. And earlier this year, Instacart launched a partnership with Google Shopping. In-Store Retail Media in 2024: Hype or Happening? Problems off platform When retailers buy off-site media on behalf of brands, they may lack the expertise and access of media agencies. For example, a brand might work with a retailer on a bundled audio buy across platforms like Spotify and Pandora, but these buys don’t take into account the upfront inventory the agency has previously negotiated, said Briana Finelli, head of commerce, U.S., at WPP-owned Wavemaker. “They’re not the experts in the channels,” she said. “They’re not experts in programmatic audio. That applies to any off-site.” Another issue is measurement. Finelli said that metrics like reach and frequency are not always guaranteed in off-site media buys, mostly because off-site inventory can often only be purchased via managed service rather than programmatically. Plus, attribution, one of retail media’s distinguishing features on its owned-and-operated properties, becomes harder when audiences are targeted on other channels. "Did that impression drive the behavior?" said Brian Monahan, global client president and head of retail media solutions at Dentsu International. “It’s, by definition, less clear when you can’t use last-click attribution.” Owned-and-operated inventory typically does outperform off-site because the advertisers are reaching people who already are on a site to make a purchase instead of convincing them to go there, said Elizabeth Marsten, vice president of commerce strategic services at performance agency Tinuiti. Still, off-site targeting can broaden the funnel and expand the brand's audience beyond likely shoppers. This uneven performance contrasts with the price tag for off-site media, which is typically 30% to 70% more expensive on a CPM basis than buying media like online video or paid social without the retailer's first-party data, said Finelli. "To justify the premium, retail media firms can’t just offer managed service media buying like their agency counterparts," Dooley said. "They must also prove their value by showing the sales driven when using the first-party audience data to target the most relevant customers." Working toward a better system? Buyers looking for more control over off-site media buying can use deal IDs, where retail media partners can package their audience data for buyers to target on a demand-side platform, but retailers still get to guard sharing their data with the entire open exchange, Dooley said. However, this is uncommon, she added, pointing to Target’s Roundel network as an exception. For now, retail media owned-and-operated inventory still commands the majority of buyers' attention and money. Off-site still needs to prove its value before buyers can work to fix its problems, Marsten said. “The only reason you would start to dig in and get upset is if it wasn’t performing,” she said. Plus, buyers have less power in their relationship with retail media platforms than they do with other publishers, Finelli said. “The [brand] clients rely on these retailers buying their inventory in massive quantities,” Finelli said. “We don’t have as much leverage because brands can’t go toe-to-toe with retailers that hard.”

Retail Media Networks

Buying Retail Media Off-Site Could Worsen Transparency Issues for Brands

Off-site retail media is a growing category, but one that restricts buyer control

Catherine Perloff

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Catherine Perloff