General Manager Retail & Commerce
Retail media is growing rapidly – and fundamentally changing the way brands, retailers and agencies interact. However, the increasing variety of channels and formats poses challenges for companies: How can marketing and sales objectives be optimally aligned? How can inefficient budget usage be avoided? And what role do agencies play in strategic management?
More and more retailers are becoming networks or publishers. According to IAB Europe, the association of European digital marketers, there are now 138 in Europe – and the number is growing. At the same time, the retail media inventory is growing rapidly, and it’s no longer just on Amazon. Numerous retailers want to piece of the booming retail media advertising market. According to forecast by IAB Europe, this market will grow to 22 billion euros in Europe by 2026 and even reach 31 billion euros by 2028.
For advertising brands, this development presents both opportunities and challenges. The increasing variety of retail media offerings makes it difficult to keep track: Which retailers are relevant for your own marketing strategy? Which target groups can be reached and under what conditions? Which formats deliver the best results? How do you measure the success of retail media? And above all: Are the structures of the companies and their agencies equipped for integrating retail media into their own marketing and media strategy effectively? Many advertisers do not have solid answers to these questions because they lack sufficient benchmarks and experience.
At the same time, it is clear that retail media is no longer only effective in the lower funnel, i.e. in sales and conversion. This is confirmed by a survey conducted by the Retail Media Ecosystem focus group of the Bundesverband Digitale Wirtschaft e.V. (German Federal Association of Digital Economy) at the end of 2024: More than two-thirds of the respondents view the potential of retail media in the upper funnel, i.e. in increasing attention and interest, to be high or very high.
This is promising news for advertisers. However, many companies are not yet structurally prepared for retail media. In many companies, marketing and sales work largely separately from another – often with conflicting goals. One example: While the marketing department wants to rejuvenate the brand, the sales department wants to increase sales in the short term. Conflicts are inevitable.
A close alignment of internal goals and activities would be essential. After all, retail media can fundamentally change the rules in one of the most important business relationships. Until now, the cooperation between brands and retailers was based on a traditional retail relationships. However, retailers are now also becoming publishers and marketers, offering services traditionally managed by the brands’ marketing departments. As a result, new points of contact and a change in the distribution of roles on both sides are emerging.
How companies become retail media ready
Companies and brands must therefore work on their organizational structure in order to remain future-proof in the age of growing retail media relevance. It is no coincidence that we define retail media as a combination of RETAIL AND MEDIA, i.e. sales AND marketing. For companies, this means that sales-oriented eCommerce and performance departments must now work closely with brand teams. However, different languages and KPIs often clash here – a challenge that should not be underestimated.
But it’s not just companies that have to adapt – agencies are also facing change. In the new setup, they are much more needed as more than just a consulting entity. They serve as a link between marketing and sales within the company, as well as a neutral party between retailers and the company. Their task is to bundle internal activities, create synergies, and efficiently orchestrate cooperation between sales, marketing, performance marketing, e-commerce and brand management. In order to fulfill this central role, agencies not only need media professionals, but also sales experts who can guide them through the new challenges.
The Role of Agencies in the Retail Media Age
Agencies play a crucial role in preparing companies for the demands of retail media. They support advertisers in several key areas:
While agencies used to primarily coordinate with media planners and marketing managers, key account managers of the brands are now also becoming more important. The brands’ e-commerce teams need to know the overall plans and must be bought together with the retail media expert teams of the agency.
Close coordination between marketing and sales is essential. Especially for product advertising, it’s crucial that the promoted items are actually available. Sales and retailers often have an annual plan for sales and promotions. The agency needs to review this and align it with the media planning. Agencies help to synchronize sales and media planning to ensure that campaigns are specifically tailored to promotion actions and achieve their maximum impact. Ideally, promotions and media build on each other. The agency advises on which digital and stationary measures should be played out at what times.
Retail media offers brands great opportunities, but without targeted control there is a risk of budget loss. A common problem is self-cannibalization. For example, a brand advertises a product using Google Ads, while a large retailer is also pushing the same product with a Google Ads campaign. Both are bidding on the same keywords, driving up each other’s click prices and reducing efficiency.
Strategic media planning prevents this situation through cross-channel tracking and data synchronization between brand and retailer. This helps avoid duplicate bids and enables more efficient budget management.
Evaluating retail media campaigns is not trivial, as reporting standards vary from retailer to retailer. Agencies support brands in implementing data-driven attribution models to precisely determine the impact of their actions, thereby enabling more efficient management of advertising budgets. Traditional metrics such as impressions or clicks are not sufficient. What matters are conversions, return on ad spend (ROAS) and incrementality - the additional revenue generated by a campaign. This not only optimizes performance but also strengthens the strategic role of retail media in the marketing mix.
The amount of data retailers offer brands is increasing exponentially. Agencies help advertisers to select the datasets that fit their specific campaign strategy: The data package with high reach but potentially lower granularity? Or the highly granular one with a low reach and higher level of detail? The challenge: as the data offering grows, there are increasing overlap, meaning that the same person may appear several times across several data pools.
Many brand managers still talking about omnichannel strategies today. Retail media, artificial intelligence and high-quality data pools are paving the way for a unified commerce approach. The key difference? A seamless, real-time linking of all relevant data points along the entire costumer journey – from offline retail to online purchases.
The successful integration of retail media into existing media plans directly contributes to two key business objectives: a noticeable increase in sales and a consistent, seamless customer experience. Consumers experience a seamless, personalized shopping experience that is tailored to their needs. Brands benefit from a consistent, cross-channel presence. When this integration succeeds, retail media becomes far more than just another advertising channel. It transforms into a strategic growth driver, that offers real value to both brands and customers.
The Authors
