The retail media boom is here —  how can it scale?

Retail media has been hailed as the Holy Grail of advertising, offering brands the ability to reach high-intent shoppers with first-party data and trackable results. Yet its rapid growth has led to a familiar set of problems: fragmentation and high operational costs.

With over 200 retail media networks (RMNs) operating today, advertisers face a logistical challenge. The current retail media landscape is a maze of disconnected platforms, each with its own measurement standards, buying interfaces and tech stacks. At the same time, advertisers are forced to manage multiple vendor relationships. This complexity threatens to undermine the efficiency at scale that programmatic advertising can offer.

If retail media is going to deliver on its promise, the industry must streamline access, standardize operations and make the channel more accessible to all advertisers — not just the largest brands and holding companies.

Let’s home in on the problems and the solutions.

The problem

Programmatic was created to solve this exact problem: How do I buy specific audiences and media without contacting a countless number of publishers and incurring unsustainable operating costs? With the proliferation of retail media networks — each in effect its own walled garden with siloed interfaces and managed service teams — we’re at risk of returning to square one.

As a result of this fragmentation, agencies are forced to rely on a managed service approach. This requires sending out dozens of emails and cobbling together manual reporting. While some of it is handled by demand-side platforms (DSPs), the process is not as efficient as it could be.

For holding companies, retail media is navigable, but the operational costs are exorbitant. For independent and mid-market agencies, the channel is largely inaccessible. This is the problem ad tech needs to solve.

The solution

To democratize retail media and streamline operations, buyers need access to a single interface that can automatically run ads at scale. A centralized workflow would eliminate the need to work across different DSPs, RMNs and reporting tools.

Ideally, buying retail media would be like buying ads through a DSP in the early days of programmatic — where advertisers could check a box on a screen instead of sending emails, making phone calls and waiting for approvals. Agencies should have control over the day-to-day operations, receiving real-time updates and turning campaigns on and off without having to learn new tools or go through new contacts. The billing team shouldn’t need to liaise with a bunch of vendors.

This boost in efficiency would have a big impact. Holding companies would be able to slash operational expenses. For independent agencies, accessing retail media offers a second-mover advantage. They won’t be stuck on legacy platforms, nor will they have to develop a bloated organization to handle ad operations. That could then allow mid-market or independent agencies to compete more effectively against larger players.

There are signs of progress. Retail media ad-serving company Kevel’s purchase of Nexta — a self-serve advertising platform — suggests a shift toward a more accessible, scalable retail media solution. Kevel enables retailers to launch their own media networks, while Nexta makes those media networks self-serve and extends their inventory to off-site destinations. This kind of partnership is exactly what the sector needs to reach its full potential.

The big picture

The challenges facing retail media are not unique. There’s also growing momentum to democratize access to connected TV (CTV). Startups such as tvScientific, Vibe and MNTN have emerged to make it easier for mid-market advertisers as well as small and medium businesses to tap into CTV while proving it can drive results. 

A similar opportunity exists in commerce media, which is currently inaccessible to all but the largest advertisers and comes with outsize costs. Standardizing and streamlining access could vastly expand the channel and level the playing field for smaller agencies and brands.

This challenge — and the opportunity it represents — goes beyond CTV and commerce media. Privacy concerns are fueling a wave of new ad networks. Several ad tech companies have embraced the strategy of bundling media and data together to create more valuable, closed-loop ad solutions. That also can create more complexity for advertisers and publishers. With pressures mounting, the time might be coming for another programmatic revolution. It’s time to make advertising simple again.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.