Retail Networks: The Titanic of Digital Ad Spend

Hold onto your wallets, folks, because the ship of retail media networks (RMNs) is sinking faster than you can say “click-through rate.” Despite the fanfare, the billions of dollars, and the glossy presentations at every marketing conference, RMNs are floundering like a fish out of water. Advertisers are left scratching their heads, wondering why their dollars are vanishing into the ether with little to show for it.

You’ve probably heard the buzz: Retail Media Networks are supposed to be the next big thing, turning every corner of our shopping experience into an ad opportunity. We’ve got Instacart making YouTube ads shoppable for CPG brands and Walmart slapping third-party ads on every screen in their stores, from self-checkout lanes to the TV aisle. They even acquired Vizio to stream their ad offerings directly to your living room. With U.S. advertisers expected to shell out a whopping $54.48 billion on retail media by year-end, you’d think this rocket ship would be blasting off. Instead, it’s more like a glorified fireworks display — all flash, no lasting impression.

Let’s take Walmart Connect, for instance. They’re pushing ads into every nook and cranny of their stores, even over the store’s radio. They’ve partnered with Kroger Precision Marketing and Disney Advertising for a beta test with PepsiCo, leveraging shopper data to target audiences across Disney’s ad inventory. Sounds innovative, right? But here’s the catch: these networks are propped up by placeholder AdTech platforms that are about as reliable as a paper umbrella in a hurricane. This slapdash tech leads to inefficiencies, errors, and lost revenue. The illusion of innovation masks a crumbling infrastructure.

The retail media landscape is bursting at the seams with over 160 networks, each promising targeted advertising magic based on first-party data. Imagine a crowded bazaar where every stallholder is shouting louder than the next, each claiming to have the ultimate potion for ad success. It’s a wild, chaotic scene, and more choices should be a dream come true, right? Wrong. More choices mean more headaches, more confusion, and more ways to screw up. It’s like being a kid in a candy store with a hundred bucks but no idea which sweets will actually taste good.

So, here we are with 160 networks, each one swearing they’ve got the secret sauce to targeted advertising. They all have their unique spin—some brag about click-through rates, others boast about in-store foot traffic, and a few even claim engagement rates are the holy grail. The inconsistency is mind-boggling. Comparing these networks is like comparing apples to aardvarks. You end up with a mismatched jumble of data points that leave you scratching your head, wondering if you’re making progress or just spinning in circles.

This mess isn’t just a minor inconvenience; it’s a full-blown circus. Without standardized metrics, advertisers are flying blind, throwing darts in the dark. They can’t measure ROI accurately or decide where to plunk down their cash. It’s like trying to navigate a maze with a map that’s constantly changing. Advertisers need consistency to make informed decisions, but right now, the retail media landscape is anything but consistent. It’s a lot of wasted effort, chasing after numbers that might as well be random guesses.

The ANA’s latest report, “Retail Media Network: Optimism Tempered with Caution,” drops some hard truths. This report isn’t just a gentle nudge; it’s a loud wake-up call, complete with air horns. A staggering 55% of marketers are screaming for RMNs to meet advertiser measurement standards. They’re not asking nicely—they’re banging their fists on the table, demanding consistency and transparency. Without it, they’re stuck in a murky swamp of metrics that mean nothing. It’s time for standardized metrics, not tomorrow, not next year—yesterday.

Sales attribution woes haunt 48% of marketers, who feel like they’re chasing ghosts. Trying to pin down how sales are directly linked to their ad spend is like trying to catch a greased pig. The data is slippery, unreliable, and often late. Then there’s the 40% who are tearing their hair out over the timeliness of data and analytics. They need real-time insights, but instead, they’re getting yesterday’s news, which in the fast-paced world of retail, is about as useful as a chocolate teapot.

The ANA, along with the Media Rating Council (MRC), is scrambling to develop a standard list of measurements to make sense of this chaos. It’s like trying to herd cats. Every network has its way of doing things, and getting them to agree on a single standard is a Herculean task. But without this standardization, the retail media landscape will remain a jumbled mess, and advertisers will continue to throw money into a black hole, hoping for the best.

Despite all the hullabaloo about RMNs, many advertisers are still in the dark about their real impact. The pressure to buy into RMNs for better shelf space or store displays is like a high-stakes poker game with unclear rules. More than half of marketers are testing RMNs for brand awareness and consideration, not just sales. But the data, or lack thereof, is a buzzkill. It’s like throwing a party and realizing too late that nobody brought any snacks. A whopping 68% are using RMNs for mid- and upper-funnel objectives, but with 57% spending up to 39% of their marketing budgets on retail media, it’s a risky gamble. It’s like betting big on a horse race with a blindfold on—you have no idea if your horse is even in the running.

Now, let’s hear from Dan Marc, a retail media network guru, on the key issues plaguing RMNs:

"Retailers often excel at managing retail operations and leveraging data, but when it comes to media strategy, they’re out of their depth," says Marc. "They lack clear, effective go-to-market strategies, competitive pricing models, and strong strategic relationships. Value chain optimization? Forget about it."

Marc highlights the nightmare of developing robust tech infrastructure. "Retailers need advanced AI and data analytics to merge online and offline data seamlessly. Scalability and data privacy are major hurdles, and most are tripping over them," he explains. "Strong leadership and skilled talent are the bedrock of successful RMNs, but what do we see? Leadership with no vision and teams lacking expertise in digital marketing, data analytics, and AI."

According to Marc, retail media initiatives must align with broader business goals. "Clear transformation goals and agile governance models are critical, but often missing," he adds.

Retail media networks might seem like the golden ticket to digital advertising, but beneath the glitter, there’s a lot of rot. Until these networks can sort out their tech, data, and strategic issues, advertisers will be left wondering if they’ve been sold a bill of goods. The next big thing? More like the next big flop unless they get their act together.

Retail media networks are a great idea, in theory. Who wouldn't want to monetize every square inch of retail space, both physical and digital? But as it stands, the execution is shoddy at best. Calling everything "retail media" and hoping it sticks is like throwing spaghetti at the wall—messy and largely ineffective.

To succeed, RMNs need to move beyond the superficial allure of buzzwords and empty promises. They must build robust, reliable platforms and ensure that data is not just plentiful but also accurate and actionable. Otherwise, advertisers will continue to waste money on campaigns that deliver nothing but frustration.

So, dear advertisers, while RMNs might hold the keys to a future where every ad is perfectly targeted and every dollar well spent, we’re not there yet. Until then, maybe keep a close eye on where your ad dollars are actually going—and brace for some turbulence.