Unpacking The ANA Retail Media Network Study

The Association of National Advertisers recently released the results of its Retail Media Survey. More than anything, this report reveals a communication gap between brands and retailers, but a gap that is very fixable!

Are We Speaking The Same Language?

The report states very early on what it believes is a flaw with RMNs, noting, "A major finding and concern expressed repeatedly throughout the study is that although RMNs are being credited for driving brand sales, they have not yet convinced advertisers of their ability to drive brand growth." Yet, on the same page the report then says, "While accessing upper-funnel brand budgets is a goal for RMNs, brands do not see this as a priority."

In that exact quote, brands are saying RMNs are good at driving sales. This is true! Brands asked, and retailers are delivering sales, trial, and incrementality in spades. However, have brands even given retailers the chance to help them build their brand? Are the brand's brand teams and brand agencies engaged with the retailer as a partner in achieving their brand building goals? This can be remedied by better communication and changing how we think about brand, sales, and the value of RMNs.

It's About Mindset

Carol Dweck's famous book Mindset revolutionized how we think about what contributes to achieving the best outcomes. In fact, Satya Nadella credits it with inspiring Microsoft’s turnaround. It's worth asking from the mindset lens, what mindset are brands in when the ANA says, "Brands are reluctant buyers and see RMNs as a 'have to buy' versus a 'want to buy.'?" Just two paragraphs earlier, it stated, "RMNs are being credited for driving brand sales." Are buyers/brands saying that the same RMNs that drive sales are seen as a 'have to buy' instead of a 'must buy,' then?

The report later ties this to the shopper marketing/merchandising relationship that goes back decades. Brands paid for advantageous shelf space, end caps, and other promotional items. Today, shoppers spend so much time in a digital environment, on-site, off-site, and other digital avenues are the best way a retailer can help a brand grow its share.

A great way to pressure test where the sentiment of “have to buy” comes from can be found in a hypothetical. What if a retailer told a brand, "You cannot buy on our retail media network, but your competitors can." Most brands faced with being left out would now very much want to buy on that retailer's network! This is human nature. We want what we don't have and don't want to admit we want what we're told is good for us. When brands lean in with retailers, they will find the best way to partner to achieve their broader business goals. In most cases, it’s possible they find those retailers to be as helpful and capable as the largest media platforms - perhaps even more.

How Can We Help Brands Get the Most From Retailers' RMNs?

1. Focus on value creation (and not just cost and sales.) I wrote about this nearly three years ago and it's equally true today. We spend far too much time distracted by perceived injustices, cost makeup, and others' behavior and not enough time on delivering value the CFO and CEO can clearly see.
2. As Meta, Google, and others have lost signal on iOS devices and Safari, and as authorities worldwide begin to crack down on big tech dominance, retail media networks have become the go-to for brands to build their brand and sales metrics as efficiently as possible. Retail media wasn’t meant to be incremental money, just money better spent than in other places.
3. The future of measurement is modeled. If anyone will defy that, though, it's retailers and their media networks! As I wrote a couple years ago, advertising and marketing are now going through their scientific transformation the way pharma or farming did long ago. There was a time where knowing chemistry was the last thing on a farmer's mind. Today, the most sophisticated farms are steeped in it. The same is happening for advertising and marketing with data science. Not everyone is embracing it yet, but it is inevitable.
4. Buyers are human beings, and that can come with a bias. For instance, 53% of marketers in the survey use Instacart's RMN, but only 38% use Dollar General's. Yet, when looking at the most recent full-year revenue available for both brands, Dollar General is meaningfully larger. It's important to follow the data!
5. In most cases, RMNs’ ability to measure accurately is better than other marketing vehicles but brands don’t always see it this way (page 31.) Brands can get the most from RMNs’ closed-loop measurement by defining the brand’s own definition of business success (more than media success alone,) and working to structure campaigns to deliver on those business goals.

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Despite the paradoxes, the report shows brands are bullish in spending more with RMNs in the next few years despite perceived challenges. This is smart, as RMNs become a haven for accurate measurement and high data quality in the face of the diminishing cookie and identify signals traditionally found throughout the rest of the ecosystem.