There may be more retail media networks—Ulta Beauty is the most recent retailer to invest in the space—but that doesn’t mean brands know where to put their dollars. Increasingly, advertisers are challenged with how to allocate their media budgets as more and more retailers start their own media businesses, according to a recent survey from Bobsled Marketing, an Acadia Co.-owned agency that works with brands on e-commerce strategies.
The report, which surveyed 59 mid- to large-sized brands such as Lego and Hain Celestial, found that overall, only 21% of brands are happy with how their retail media dollars are currently allocated. Some 26% of brands don’t have a consistent methodology for where they are allocating their media spend.
“Retail media networks are a compelling place to run ads, because of the valuable insights that retailers have about shopper behavior,” said Kiri Masters, founder and CEO of Bobsled. “But brands don’t have endless budgets, and in fact often have ways of allocating their budgets that are less than ideal.” She noted that such strategies include media spending based on sales—for example, if Amazon represents 10% of a brand’s sales, the brand would allocate 10% of its media budget to Amazon’s ad network—or spending based on return on ad sales. Bobsled’s survey found that 34% of brands allocate by sales and 27% allocate by return on ad sales.