The Drum Awards for Marketing - Entry Deadline

-d -h -min -sec

Media Media Planning and Buying Retail Media

Retail media: how ad agencies decide where to spend in an increasingly crowded space


By John McCarthy | Opinion editor

April 19, 2023 | 7 min read

Globally, the ad dollars being committed to retail media already match the spend going into print. In the next three years we can expect it to rival TV, according to the IAB. The boom is coming, but agencies will only crown a few winners.

3D shopping cart and credit card coming out of mobile phone screen

Shops are busy building out products that monetize their first-party data

Retail media is an umbrella term referring to the broad set of tools being made available to advertisers by retailers. Our favorite shops are busy building out products that monetize their masses of first-party data and help brands better talk to people in the shopper mindset, getting their products in front of them when they are interested in buying them.

That, of course, is provided it is properly executed. But for Daniel Knapp, the chief economist at digital advertising trade body IAB Europe, too many marketers are still seeing retail media as nothing more than a dedicated channel. Instead, he insists, it is “an infrastructure that will bring about great change in digital advertising”.

Retailers are rushing to sell their ad inventory, whether that is in-store, on-shelf or via digital products, and some are even bundling with brands across the open web, social and TV. But the fuel in this engine – and perhaps the real attraction – is that the media will be informed by the trove of data retailers have on consumer shopping habits.

Knapp says that between 2020 and 2022, the number of online retail media offerings in Europe doubled to almost 90. It’s busy, but that choice has been welcomed in a space that has been dominated by e-commerce giant Amazon, which has made a killing on sponsored search within its marketplace.

For retailers that still see the bulk of their sales made in physical shops, there’s an opportunity to link online activity to in-store purchases, often using an ID linked to a loyalty scheme. As Laura Badea, the digital commerce partner at media company Wavemaker, explains: “By directly matching customer ID data with impressions, it is transforming how we are optimizing our advertising budgets.”

These physical retailers coming to the boom later than Amazon will have in-store data to feed into the insights they provide advertisers and Badea says this will shift the perspective of advertisers from “brand-led outcomes to commerce-led outcomes”. She says she is increasingly hearing clients talk about ”holistic marketing budgets,” with retail media as ”the glue that brings it all together”.

For Jason Wescott, who heads up Xaxis’s global commerce practice, Xaxis, campaigns that are overloaded with retail media spend could bias people who are already in the market for a product, creating a system that could collapse in upon itself. “The future of retail media presents a big paradox,” he says.

Pointing to research that says its highest value is in driving and measuring sales, he disagrees and says for him the biggest opportunity in retail media is “in unlocking brand budgets and moving up the funnel”. Like Knapp, he’s most excited by the implications of retailer data being used to serve ads across the open web, rather than exclusively on its own channels, and warns advertisers not to get “hooked on the return on advertising spend (ROAS) drug too much” and instead keep in mind the power of brand building.

Suggested newsletters for you

Daily Briefing


Catch up on the most important stories of the day, curated by our editorial team.

Ads of the Week


See the best ads of the last week - all in one place.

The Drum Insider

Once a month

Learn how to pitch to our editors and get published on The Drum.

Wescott says it is exciting for agencies to see the rush of brands bringing retail data to market, particularly with first-party data being so coveted as the third-party cookie gets retired. For the entire system to work, however, there needs to be more openness and collaboration, he says. “If it is to scale to the levels we want, it has to be more open and combined so everyone can combine as a single source of truth… or it will be ridiculous.”

Many working in the retail media space decry the lack of standardization in measurement and product, saying that if it is to be as big as TV then rivals may have to work together in some capacity. Wescott's advice for them is: “Get your responsive ads and search right. Get the on-site ads right before moving up the funnel. Find new ways to work in harmony with other networks and measure holistically.”

Meanwhile, Laura Wakeling, the EMEA senior director of client success and onboarding at retail media platform CitrusAd, has detected less fear from retailers in recent years when it comes to adoption. She says she expects growth from a “modest” base and believes the market can “break open” Amazon’s lead. We’ll see you at the checkout in 2026 to see if that rings true.

Media Media Planning and Buying Retail Media

More from Media

View all


Industry insights

View all
Add your own content +