Retail Media Networks Learn the Power Of Ad Sales Leverage

Advertising

Sep 12

An issue that has been bubbling up over the past few years appears to be gaining prominence - and perhaps driving up frustration among some brands and media buyers.

Retail Media Networks are realizing they have leverage, and aren’t being shy about using it.

It’s hardly a new tactic for a media seller that has a large audience, desirable property or just a lot of overall clout to use it to grow its business. Back in the 1990s, for example, NBC would go to advertisers and say something along the lines of “hey, you’d like your ads to run in ‘Friends’ or ‘ER’? Well, you have to also by some other shows.”

This is a gross simplification, but it makes the point. What’s different this time around is that retailers are using their considerable clout as store owners to influence media spend. This was a point of tension I wrote about a few years ago, and according to Digiday, it’s becoming a problem for some brands.

The retailers’ ‘pitch’ in this case is: If you want to have your toothpaste or cookies getting on a good shelf that everyone walks by and sees, you need to spend more with our retail media network.

Which could be smart negotiating or it could muddle worlds and damage some trust over time. For one thing, many brands’ media buying and “shelf-space” negotiating teams are run separately, with different budgets, goals and leaders. This could create many headaches - and maybe resentment. Also, the reason brands like RMNs is that they are super effective in driving their goals (often sales). But when you force them to spend in ways they don’t want, you could risk dampening the effectiveness of the media vehicle itself.

This will be interesting to see play out over time.