For decades dealing with big retailers has been a cage fight; brands have to bung money here, there and everywhere to be listed let alone given a prominent display.
The age-old altercation now has a new dimension: retail media. On the one hand marketers love it because they think it gets them as close as they can be to consumers plus access to retail media’s first party data – walled gardens in effect.
On the other, according to this piece in Ad Age, some think they’re being ripped off as the media agencies with big retail accounts are required to promise large amounts of other-client spend to the retailers’ respective media operations (justified or not.) This has emerged in the wake of Amazon’s recent decision to divide its global media between OMG in the US and WPP elsewhere.
For the record, Omnicom says it does no such thing; WPP, so far, has declined to comment. Amazon says: “We conducted an extensive, thorough and objective review to find the right agency partners. In that process, we evaluated agencies’ ability to reach our customers based on their marketplace expertise, media planning experience, media pricing, measurement abilities and account management across all geographic regions. Any suggestion otherwise is false and misleading.”
This comes at the same time as a renewed focus on what agencies call (not wholly transparently) “principal-based” trading. That is, buying media on their own account and flogging it on. Broking, in other words.
Sean Corcoran, former US CEO of Interpublic’s Mediahub, told Ad Age: “The retail media world, and really the broader media marketplace, is now riddled with backroom deals and principal buying models that are leading to a muddled marketplace where many brands are losing out‚ and they don’t even know it.”
Simon Francis of consultancy Flock Associates said: “Some of the retail clients are saying to their media agencies, ‘You are our partners, but if you expect to keep our retail media accounts we expect you to invest heavily into our retail media network. So the media network commits heavily into their clients RMN and then has to somewhat artificially move other clients’ money to it.”
There are also reports of holding company teams revising client media plans for benefit of the holding company – that is, where they make the most money.
Media has always been a murky old business and we shouldn’t be surprised at such developments with retail media forecast to take 20% of all media spend imminently. Ad holding companies are currently struggling to make any money at all. There probably won’t be a definitive resolution until one of these deals lands in court. At least the lawyers will profit from it.
