Is Retail Media Retail, Media, or Retail + Media?

The Sector’s Future Growth Depends on How RMNs Answer This Question

Kroger Precision Marketing SVP Cara Pratt’s declaration that “retail media is media” marked a key inflection point for the sector. Until that moment, the default for most retailers was to treat brands as mere suppliers who could be arm-twisted to spend on retail media as part of the JBP process.

Brands understandably saw things a bit differently. In the retail media context, they were no longer the supplier but the customer. It was now up to RMNs to serve their needs if they wanted access to new marketing budgets.

In a 2023 article, “Why Retail Media Networks Need to Start Acting Like Media Companies—Not Retailers,” I wrote that:

Retailers want brands to spend on retail media ads using national media dollars—which represents net new ad spend—and grumble that retail media often pulls from existing shopper and trade marketing funds. But earning national media dollars will only come if retail media networks (RMNs) stop acting like retailers and start acting like media companies. The disconnect happens because most RMNs haven’t evolved beyond their original purpose of driving their own traffic and sales.

In the short term, retailers had the incentive to capitalize on whatever leverage they could apply. This worked well circa 2020-21 when brands were awash with incremental budget, and those dollars were flowing disproportionately into retail media. But this tactic wouldn’t be sustainable—and would breed resentment along the way.

Retailers resisting their new identities as media companies are now floundering as they realize RMN growth to date was largely dependent on incremental dollars. While Amazon Ads and Walmart Connect are generating billions in ad revenue with 20%+ growth rates, other RMNs are struggling to grow by single-digit rates. Retail media, as it turns out, may be less retail and more media?

In response to my 2023 article, Ethan Goodman, EVP of Global Digital Commerce at Mars United Commerce, replied: “[W]hile I agree at a basic level that ‘retail media is media,’ I think the retailers who behave like ‘retail media = retail + media’ will win disproportionately in the future.”

Aha, so there’s a third option!

Which brings me to the title of this article: Is retail media retail, media, or retail + media?

Let’s examine the arguments.