The rise of retail media networks and the implications for agencies

How agencies fit

Of course, with so many marketers offering their own ad solutions, it can be complicated for a brand to navigate the cluttered landscape. There is no all-encompassing provider that would allow a vendor to advertise with different retailers at once because no retailer wants to share with a competitor. Currently, media agencies are helping brands place deals in each retail media network. However, experts said there could be a future where agencies are no longer needed as retailers continue to take on more of the buying and placement duties.

“Right now most agencies are liking this because a good chunk of brands are still using their media agencies to place the deals in the media network,” said Colburn. But he noted that many retailers have characterized their media networks as being agency-like as the intermediary between advertisers and the consumers. “Placing messages for an advertiser at the right place and the right time to the right consumer sounds like an agency to me. [Brands] might start seeing their retailer partners as more strategic partners than their agencies.”

As brands manage the complexities of advertising in different retail media networks, they’re building out better internal operations. In the last year, many CPG brands have created a “center of excellence,” an internal group that works with both outside agencies and retailers to place ads and keep track of the portfolio. Merkle found that 96% of CPGs have a center of excellence to support RMNs, up from 86% last year.

“How Roundel [Target’s media business] goes to market is different than Walgreens or Walmart and that is complicated for a brand to be able to navigate, which is why they are investing in and thinking about a center of excellence. Should my shopper marketing agency own this or my brand agency own this? How do I make sure my dollars are appropriately invested across this gamut of the landscape,” said Cameron.

Growth mode

Retailers that already built successful retail media networks are expanding them. During Advertising Week, Kroger announced the launch of a private programmatic marketplace, a self-serve platform where brands can track the grocer’s customers on the web. The grocer has operated its own media network, called Kroger Precision Marketing, since 2017.

“That’s a standing RMN actively evolving their offerings to meet the needs of their suppliers,” said Cameron. “Self-serve options are one of the bigger trends brands are offering.”

Best Buy, which has also had its own media business for several years, recently rolled out a teaser site for “Best Buy Ads Coming Early 2022.” A spokesman confirmed it is an “evolution of the ad business” for the electronics seller but declined to provide more information.

After founding its media network nearly two years ago, TripAdvisor saw COVID-19 take a bite out of business initially. Yet the company has been able to still do deals with advertisers outside of travel in categories such as automotive and spirits, for example, according to Christine Maguire, general manager and VP of global media business at TripAdvisor, speaking on a recent episode of Ad Age Remotely. An automotive brand might buy an ad on TripAdvisor in hopes of luring car purchases from consumers itching for a roadtrip. Ford and Tesla both recently ran campaigns with the marketer, according to a spokesman. Since the majority of travelers, or 60%, aren’t sure where they want to go, TripAdvisor has been able to measure how ads influence decisions.

“Destination is a really big example where [advertisers] can measure the impact of ad exposure on our site then rationalize every single investment they’re making with us,” Maguire said, noting the richness of TripAdvisor’s first-party data. “We are really excited about the potential as we head into 2022 because of the success we’ve seen despite being a travel company during a global pandemic.”

Macy’s is also in growth mode. The department store chain started its media business last year and expanded in the spring to include its Bloomingdale’s sister brand. Thus far, Macy’s has run more than 800 campaigns for 140 advertisers on Macy’s and over 90 campaigns for 80 advertisers with Bloomingdale’s. While Macy’s has some outside partners, the retailer has built out a robust in-house sales team to manage and scale the media business, according to Melanie Zimmerman, VP of Macy’s Media Network.

“It was very clear to us from the beginning that we want to make this a core part of our business and with that we want to make sure the core functions are in-house,” she said. “We will continue to hone in on what we do really well which is the storytelling for our brands across Macy’s and Bloomingdale’s and connecting them to the most attractive audiences.”

Other retailers are just beginning to tout their new media offerings. Many are thinking ahead about privacy implications for shopper data and how they can still deliver an effective solution for advertisers. Grocer Albertsons this year hired Kristi Argyilan, who built Roundel at Target, as senior VP of retail media to grow its ad solution. Argyilan spoke recently about balancing personalization with privacy.

“How do you continue to respect what consumers want from a privacy perspective and also from personalization perspective and how do you work within the confines of the law while still giving customers the services that they demand from us,” she said at an Advertising Week panel. “Anticipating where the privacy laws are going to go long-term is a lot of the work we’re doing right now so we’ll be prepared to serve both the law and what the customers are asking for from us.”

Lowe’s says that since announcing its debut of One Roof Media Network earlier this month, the retailer has already received “numerous” requests from prospective advertisers after launching with 100 brands. Lowe’s is working with Publicis’ CitrusAd and Criteo; it also worked with consultancy Franklyn West on strategy. Thalberg noted that Lowe’s has seen some “very encouraging signals about the viability” of the new offering. The chain plans to add on-site inventory and select off-site partners as it grows in 2022.

“Retail media networks are exploding—they’re here to stay,” said Merkle’s Cameron. “For them to all stay compelling and capture the right amount of dollars, it’s staying true to their individual visions and mission statements.”

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