Why retail media is still grappling with definition and spending uncertainties
Apr 8, 2025
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Amy Owen, Chief Commerce Officer at Kinesso, dives into the complexities of retail media networks and the impact of economic uncertainty on spending negotiations. She discusses the challenges of joint business planning amidst shifting market dynamics and the confusion caused by industry jargon. Owen also highlights the critical role of first-party data in navigating advertising strategies and the necessity for flexible agreements between brands and retailers to enhance effectiveness. Overall, it’s a candid look at the current state of retail media and its evolving landscape.
Economic uncertainty and tariff impacts are causing brands to reassess marketing strategies, particularly in joint business planning negotiations.
The growing number of retail media networks highlights a booming sector, complicating the media buying process amid economic challenges.
The evolving measurement of advertising effectiveness emphasizes the need for standardized metrics like Return on Retail Relationship to ensure accountable spending.
Deep dives
Economic Uncertainty's Impact on Marketing
Economic factors such as tariffs, the TikTok ban, and overall uncertainty have significantly influenced the marketing landscape. Many brands have scaled back on humorous campaigns like those for April Fool's Day, as the mood among consumers is less receptive to pranks during challenging times. This shift reflects a broader hesitance in the industry, as marketers remain cautious about how to engage their audience meaningfully without appearing tone-deaf. As a result, the landscape is navigating new waters, with many brands reassessing their strategies to align with the current economic climate.
State of Retail Media Networks
The number of retail media networks has grown substantially, with the count now exceeding 250, indicating a booming sector. In discussions with industry leaders, the complexity of retail media buying was highlighted, particularly regarding negotiation processes affected by economic pressures. Insights into Joint Business Planning (JBP) deals revealed challenges as marketers seek to secure advantageous agreements while facing the economic headwinds that complicate spending commitments. This evolving landscape necessitates careful evaluation by marketers to ensure their media investments yield expected returns.
Challenges in TikTok's Future
The uncertainty surrounding TikTok's future continues, with extended deadlines for potential ownership deals leading to ongoing speculation about the platform's viability. Recent tariff discussions that impact contractual negotiations have further complicated the situation, creating a sense of limbo for marketers. Brands that rely on TikTok for advertising are finding themselves in a holding pattern, unsure of how to maximize their investments or adapt their strategies. The overall climate fosters a wait-and-see approach, which could hinder proactive marketing efforts in the interim.
Tariffs and Their Ripple Effect
Recent tariff increases have led to significant repercussions for various sectors, including retailers and advertising agencies. Companies that heavily rely on imports are experiencing higher costs, which in turn can affect their marketing budgets and inventory management. For example, brands like Sheehan and Timu are expected to face tighter margins due to the closing of loopholes that previously allowed them to import goods tax-free. This tension has created a tricky environment for media buyers, who must navigate both economic pressures and shifting inventory dynamics when making strategic advertising decisions.
The Importance of Data and Measurement
The measurement of advertising effectiveness is becoming increasingly complex as marketers deal with various retail media networks employing different methodologies. A growing emphasis on first-party data is highlighted as leading brands and agencies seek clarity in measuring the return on marketing investments. The concept of Return on Retail Relationship (RoRR) emerged as an important metric for understanding the value beyond immediate media expenditures, considering factors like merchandising and sales performance. As companies respond to heightened demands for accountability in ad spending, establishing standardized metrics becomes crucial for building trust and long-term strategies in retail media partnerships.
On the Digiday Podcast this week, hosts Kimeko McCoy, senior marketing reporter and Tim Peterson, executive editor of video and audio, discuss the TikTok ban’s second extension (yes, it has been extended yet again), tariff’s trickle down effects and why agency holding companies are looking to bolster the data capabilities. Also on this episode, Amie Owen (17:28), chief commerce officer at Kinesso, a performance marketing agency within IPG Mediabrands, breaks down how economic uncertainty impacts retail media spend negotiations, otherwise known as joint business planning (JBP), as well as what’s to blame for retail media’s executive dysfunction.
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