Retail media frenzy muddies negotiations with brands, who agency execs say must spend or ‘suffer the consequences’

In the retail media network arms race, agencies say their brand clients are feeling the squeeze, and are being pressured to spend big with retailers to secure and maintain premium in-store shelf space.

Retail media networks (RMNs) have seemingly become the industry’s latest shiny object, with retailers flocking the space en masse, determined to make everything a retail media network and hocking their first-party data to drum up another source of revenue. On average, retail media makes up about 20% of clients’ total ad spend, according to an agency executive who oversees digital commerce. (The exec shared these figures and spoke with Digiday on the condition of anonymity). That figure is up from an estimated 10% to 15% of total ad spend a few years ago, they added.

And that’s not all — retailers are increasingly including RMN media spend commitments as part of their partnership agreements, according to four agency execs Digiday spoke with on the matter.

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