Research Briefing: RMNs vie for ad dollars, but marketers are unsure where to spend

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In this week’s Digiday+ Research Briefing, we examine how the rapid growth of retail media networks is making it hard for marketers to decide where to spend, how agency spending on TikTok has dropped sharply in recent months, and how Amazon is hoping more marketers will hop on board with its DSP, as seen in recent data from Digiday+ Research.

76% of marketers use Amazon’s RMN, while 24% use Walmart Connect

With the recent rise of retail media networks (RMNs), deciding which RMNs are worth spending on can be a challenge for marketers. Georgia-Pacific, for example, has vetted roughly 40 RMNs, run tests with over 25 of them and ultimately consolidated 90% of its retail media network spending with seven networks including Amazon Advertising, Walmart Connect and Kroger Precision Marketing.

Marketers are also looking to RMNs for their first-party data needs, as the cookieless future nears — 61% of agency professionals said they agree Google will get rid of third-party cookies in Chrome in Q1 2025, according to a recent Digiday+ Research survey. “One thing I learned is that the quality of the data was not the same across each network,” said Paras Shah, director of digital marketing at Georgia-Pacific. “While they told you that they had first-party data, they weren’t always giving first-party data for me to activate against them. Some of them were layering in additional sources of data like third-party data in order to get the cost down.”

Currently, Amazon is the clear main character in retail media story, with 76% of marketer respondents saying they use the platform for selling their companies’ products, according Digiday+ Research’s CMO Strategies series. Walmart Connect was marketers’ second most-used RMN, with 24% of respondents saying they use that platform.

In an effort to compete with the top retail media players (which also include Walmart Connect and Target’s Roundel) and to raise awareness among advertisers, some RMNs have begun hosting upfront-style pitches to marketers. Last week, The Home Depot hosted its inaugural “InFront” to tout its retail media offering, the rebranded Orange Apron Media network. “It’s very important for our supplier, marketing teams and agencies to meet our marketing leaders,” Melanie Babcock, vp of Orange Apron Media, told Digiday. “If you’re a retail media network and you don’t think that that piece is important to your supplier, you’re missing the boat.”

Insights and stats:

  • Retail media is not without its challenges. Aside from growing privacy laws, a big concern for marketers is the cost of media. Ninety-two percent of survey respondents said the cost of media was the biggest challenge they face with retail media.
  • The majority of marketers measure retail media success via commerce or sales rather than awareness metrics like impressions or engagement: 95% of marketer respondents said their primary measurement of success is commerce or sales, versus 12% and 5% for impressions and engagement, respectively.
  • Kroger’s Kroger Precision Marketing was selected by only 6% of survey respondents as a RMN their company currently uses. The grocer may grow its RMN through its impending merger with supermarket giant Albertsons Companies, although that deal is tied up in litigation as The U.S. Federal Trade Commission is suing to block it.

Read more about the growth of retail media networks

Digiday+ Research digest

Agency spending on TikTok has fallen sharply in the last few months, according to a first-quarter survey conducted among agency professionals by Digiday+ Research. That’s as the short-form video app faces a potential ban in the U.S. (among other issues). Agency marketers have historically been more skeptical toward TikTok than their brand marketer counterparts, and Digiday’s survey found that the real evidence of agencies’ hesitation to embrace TikTok as a solid marketing channel for their clients lies in their spending there (or lack thereof).

The stats:

  • Agency spending had been holding steady since the second half of 2022, with about three-quarters of agency pros saying their clients spent at least a very small portion of their marketing budget on TikTok. But as of Q1 2024, only 59% percent of agency pros now say their clients put at least a very small portion of their marketing budget toward TikTok — a big drop.
  • Slightly more than half of agencies (55%) are active on TikTok, putting it in fourth place among social channels for agencies, behind Instagram, Facebook and YouTube. For context, 73% of brand pros told Digiday their companies currently use TikTok.
  • Thirty-nine percent of agency pros said engagement is the main measurement of success their clients currently use on TikTok, while 26% of agency pros said commerce or sales is their clients’ top success metric. A focus on commerce and sales could indicate that some agency clients are making TikTok Shop a more serious part of their marketing strategies.

Read more about agency spending on TikTok

Amazon has the potential for more advertisers to get on board with its demand-side platform, but currently many marketers don’t see Amazon’s DSP as a strong alternative to the ones owned by Google and The Trade Desk. That’s according to what marketers, publishers and ad tech vendors shared with Digiday+ Research in a March survey. Just 5% of the 44 respondents in Digiday’s survey chose Amazon as their preferred DSP if they could only select one. In contrast, nearly four in 10 (39%) opted for Google’s DV360, with the same percentage choosing The Trade Desk.

Insights and stats:

  • If Amazon could reshape the narrative around its DSP, there’s every reason to believe it would win over more ad execs. Forty-three percent of survey respondents said they somewhat agree that a new, improved Amazon DSP is enough to get them to reconsider spending more programmatic ad dollars with the platform, while 5% said they strongly agree.
  • “There’s clear desire for a number three in the market. So, there’s going to be a natural reaction for folks to say, ‘Alright, we can only do so much with [Google] DV 360, and this much with TTD.’ So, who else is there?” — Matt Prohaska, CEO of Prohaska Consulting
  • A third of survey respondents (33%) said they’ve used Amazon’s DSP in the past 12 months, while 56% said they’ve used The Trade Desk and 64% said they’ve used Google DV360.

Read more about ad executives’ use of Amazon’s DSP

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