Our Retail Media Consultant, Yara Daher, shares five key principles to help guide Retail Media's transformation in 2025.
Retail Media is no longer a niche; it's a dominant force shaping the future of advertising, and the numbers speak for themselves. Retail Media in Europe grew 4x faster than the total ad market in 2023, boasting a staggering 22.1% growth compared to 6.1% for the overall market. This trend is projected to continue, with forecasts indicating a €31 billion market value by 2028.
Budgets are shifting from trade but also from other media channels such as linear TV and programmatic. It is a mistake to talk about Retail Media in isolation, the Future of Retail Media is pegged to the future of other media. CTV and Retail Media will witness similar rates of growth but the truth is one powers the others. Retail data will power CTV (or other channels) a Coca-Cola campaign might be booked as Retail Media on Tesco but activated on ITV.
Keith Bryan of Colosseum Strategy and former President of Best Buy Ads told his board 14 years ago “Retailers are media companies in denial”. They believed in that and let him set up what is now 'Best Buy Ads'. As we approach 2025, it is time for Retail Media Networks (RMNs) and Commerce Media Networks (CMNs) to emerge from this denial. To achieve this, a collaborative effort is essential. RMNs, CMNs, brands, agencies, ad tech companies, and industry bodies must work in unison to drive significant advancements in Retail Media.
Here are five key principles to guide this transformation:
1. Retail + Media: The synergy between retail and media is vital; neglecting one undermines the effectiveness of the other. Understanding and leveraging this duality will be critical for success.
2. All In-Store Media is Retail Media: In-store Retail Media merges experiential marketing with digital strategies. Prioritising scalability over hyper-personalisation will help maximize impact in physical retail environments.
3. Don’t ignore Onsite Search: Failure to optimise onsite search is an existential threat. RMNs must recognise the importance of a seamless and effective onsite experience to enhance visibility and engagement.
4. Capture the Full Customer Journey Offsite: Offsite media extends across the entire customer journey. Programmatic partnerships can provide extensive reach, but true differentiation comes from strategic collaborations with publishers and creators.
5. Move Beyond ROAS – Embrace I²: It's time to shift focus from Return on Ad Spend (ROAS) to Insights and Incrementality (I²). By prioritising these metrics, brands can gain a deeper understanding of campaign performance and enhance decision-making.
As Retail Media continues to gain traction, embracing these principles will help the industry move forward. By recognising the interconnectedness of retail and media, and working collaboratively among all stakeholders, we can transform Retail Media into a driving force for advertising success in 2025 and beyond.
Find out more about IAB Europe's Retail Media work and how you can get involved on our Retail Media Hub here.
