OPINION Retail media’s changing marketing structure

There is huge variety of different combinations used to run Retail Media within advertisers. The 2023 Retail Media Benchmarks from the Digital Shelf Institute and Stratably used a sample of 52 brands. It found 22 different functional combinations, with eCommerce typically ‘owning’ the agenda.

Stratably and DSi point out reasons why this is the case:

• Compared to alternative media offerings, retail media is relatively new, which means there isn’t one playbook approach that works for all companies. 
• Many advertisers are experimenting by bringing different groups together in different ways.
• Advertisers find that it requires cross-functional teams to execute well.

More mature marketing teams with lots of experience in Retail Media are finding that they MUST change as different parts of the marketing team were often competing with for the same ad unit.

Why is this change occurring?

FMCG brands typically break down their teams and budgets into the follow ‘buckets’:

• Brand: Brand budgets are to build and promote a brand – to enhance brand reputation and visibility to drive salience and consideration.
• Trade: Trade budgets are used as an investment tool to influence the performance of suppliers at retail.
• Shopper: Shopper marketing budgets are about affecting shopper behaviour instore to generate purchase decisions. 
• Digital: Digital Marketing budgets go to fund search and social campaigns – mostly Google and Meta.

Where does the Retail Media ‘bucket’ fit into all of this? Sure, Retail Media targets shoppers near the point of sale using first party data online or offline. 

However, if Retail Media has ad units that can build brands, change trade terms and affect shopper behaviour in store and online, where does the budget actually sit?

This is at the core of the challenge facing CMOs – how do they reduce silos, optimise budgets and improve retail media’s effectiveness?

Kenvue (formerly the consumer healthcare division of Johnson & Johnson) have talked about how they addressed these challenges by changing internal media teams.

Jordan Witmer, Associate Director, Omnichannel Retail Media at Kenvue talks about how they gave combined brand, agency, and shopper marketing stakeholders into one embedded model: “We’re six months into what we’re calling an embedded model. That means we’ve pulled our whole media ecosystem into one organisation.”

It believes that this has helped develop a more unified approach to its media spend and helped make quicker, more informed decisions. “Now, as soon as the team uncovers something that will help contribute towards a business outcome, they are able to act on it, as opposed to previously when it would have to get run up the ladder before anything happened” according to Witmer.

This type of centralised model is something many brands are striving toward, though not all of them are there yet, said Paquin.

Advertisers have had to develop internal centres of expertise in brand, trade, shopper and digital. However, these silos are now causing co-ordination issues as no-one now knows who controls the budget.  

Kenvue have also been quite specific on how they choose Retail Media Networks: “If we’re looking at how to drive growth for brand X in segment Y, we evaluate all the players on the board. Then we choose who is interesting or can do something unique. I am no longer playing the game of investing with retailer X to drive outcome at retailer X. Retail media is a bigger game. How do you feed into my systems? How do you stack up against everybody else so I can make an educated choice that is potentially you.”

Expect a lot more information coming out from brands about how they are addressing the challenge of teams structure and how to cope with the deluge of newer Retail Media Networks.

Stay informed
Our editor carefully curates a dedicated Retail Media newsletter on a bi-weekly basis, filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter.