“Are you spending my money wisely?”: Marketers are getting creative to answer RMN transparency questions

However, achieving full transparency is proving to be easier said than done.

U.S. retail media advertising spending is expected to rise 26% to $54.48 billion this year, according to a forecast from eMarketer. This means that as more money is pumped into the space, return on advertising spend becomes the focus for marketers looking to understand how retailers are helping them win new business.

Making sense of a hodgepodge of data

The push to audit retail media supply chains and create customer dashboards is coming in part from customers themselves, who want access to granular-level data like sales information and product page views. These clients increasingly want assurance that their agency partners understand whether retail media ads are actually attracting new customers or simply enticing existing purchases, said a senior media agency representative who spoke on condition of anonymity.

A second anonymous executive said his agency was starting to audit RMN media spending and supply chains while encouraging clients to track those spending internally. “I’ve never been involved in a negotiation that wasn’t about what can be done and what would force an agency to do something inappropriate for its other clients,” the second executive said. “Let the media figure figure out where the dollars are going.”

The challenge is often getting retailers to routinely deliver a full stack of insights that are accurate to the dollar. In some cases, media executives say they can address the challenge up front by demanding transparency about media scheduling and fees during the negotiation process. In other cases, where it is more difficult to obtain data from the RMNs themselves, agencies must work with a hodgepodge of retailer data and third-party information to provide a picture to customers.

“I haven’t seen a lot of flexibility from them in that area,” said the first anonymous manager. “There are some things we can do, but you’re often a little handcuffed.”

For example, during a recent campaign, the first CEO’s agency ran a connected TV advertising campaign using Walmart’s customer data and received feedback on how the ads influenced Walmart sales. However, the actual media buying was done through The Trade Desk, using Walmart’s data to target the right audiences.

John Geletka, founder and chief experience officer of creative and strategy agency Geletka+, said his agency creates custom dashboards for almost all of its clients. “We use [analytics and ad intelligence] Tools like Looker, Tableu and [Microsoft Power BI] and sometimes, if necessary, we use other tools such as funnel.io to make it even easier for our customers to track the data,” he said in an email to Digiday.

Reheating the programmatic debate

All in all, retail media is a relatively new channel, so RMNs, especially long-tail players new to the game, may not yet have the kind of infrastructure agencies and their clients that they see at companies like Find Google, Meta and Amazon. At the same time, more and more RMNs are pushing towards external channels such as streaming or social networks to expand their reach. But they also expand the supply chain, making it harder for marketers to understand where their ads end up, ultimately raising concerns about media waste.

Of course, some RMNs like CVS Media Exchange, Instacart and Target have followed the Interactive Advertising Bureau (IAB) and Media Rating Council (MRC) retail media measurement standards, which were finalized in January. But media buyers and planners say some RMNs are simply unwilling to release detailed insights unless advertisers spend some extra money.

“Certain media partners, certain networks can have a stranglehold on agencies and clients because of their size. “They have this bravery about them and they know you can’t find this shit anywhere else,” said Boris Litvinov, president of advertising agency Left Off Madison. (Litvinov did not say which specific RMNs he was referring to.)

“The conversation goes back to the programmatic debate where agency fees and services came into question,” said Rob Douglas, CEO of Left Off Madison. If media planners have to invest additional time to give clients a complete picture, clients run the risk of agencies charging “the cost of doing business” and passing those costs on to clients.

Still, the five industry experts Digiday spoke to for this article said it’s all in the nature of the business. The media negotiation process has always been a gray area, with media providers willing to unlock assets like data and shelf space at the right price. And here, too, the growing RMN space is still relatively new, both for the retailers themselves and for the buyers and planners who do business in this space.

As with programmatic ad buying, there is the cost that the retailer has set for the media, and then there is the cost of running that media, which creates a margin, a third anonymous media executive said. It’s not necessarily a bad thing, they said, but it’s a question of supply and demand.

“There is a lot of variation in the external margins that are charged,” said the third anonymous executive. “If I buy media from a media company, there is a margin there too.”

But the third executive acknowledged that in a data-obsessed, cash-strapped industry, it makes sense to require detailed reporting and look for hidden fees or media waste.

“When you make that much money, you should be in the hot seat. You should be the one checking: Are you spending my money wisely?” they said.