{"id":593790,"date":"2023-01-04T05:49:57","date_gmt":"2023-01-04T11:49:57","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/01\/04\/how-much-will-commerce-media-grow-for-media-agencies-in-2023\/"},"modified":"2023-01-04T05:49:57","modified_gmt":"2023-01-04T11:49:57","slug":"how-much-will-commerce-media-grow-for-media-agencies-in-2023","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/01\/04\/how-much-will-commerce-media-grow-for-media-agencies-in-2023\/","title":{"rendered":"How much will commerce media grow for media agencies in 2023?"},"content":{"rendered":"
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January 4, 2023<\/span> | By Michael B\u00fcrgi<\/a><\/p>\n<\/div>\n

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\n\t\t\t\t\tIvy Liu\t\t\t\t<\/p>\n<\/p><\/div>\n

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<\/em><\/em>This article is part of a limited editorial series, called The 2023 Notebook, and is designed to be a guide to marketing and media buying in the new year.<\/em> Explore the series here<\/a>.<\/em><\/p>\n

It\u2019s not often a new revenue opportunity comes along for media agencies, as their traditional sources of income (commissions on planning and buying) dry up in the age of procurement.<\/p>\n

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That\u2019s in large part why both holding companies and independent agencies have rushed to grow their commerce media units \u2014 it\u2019s a new vein of revenue that happens to coincide with and take advantage of the rush of new retail media networks and e-commerce companies formed over the last two years.<\/p>\n

IPG\u2019s UM shop recently expanded the scope<\/a> of its long-time UM Shopper offering to the broader UM Commerce, a tacit realization of the broader commerce media potential. Likewise, Omnicom earlier in 2022 tapped a commerce czar in Frank Kochenash<\/a>. On the indie side<\/a>, Court Avenue expanded its e-commerce offerings while Icon Commerce rebranded to reflect its focus in the area.<\/p>\n

Commerce media nuance<\/h2>\n

There are numerous facets to commerce media, with a long-term enterprise value McKinsey<\/a> pegged at $1.3 trillion by 2026<\/a> (of which agencies can expect to generate $5 billion in revenue).<\/p>\n

For one, there are the growing number of retail media networks (RMNs), most of them based in the U.S., which together could haul in something like $100 billion by 2026, according to McKinsey\u2019s report. Seemingly, there\u2019s a new one announced almost weekly, the most recent being Fyllo, a cannabis-themed RMN, as well as a new retail ad network from ad-tech firm Quotient, which introduced an aggregator of sorts to other RMNs just before the holidays.<\/p>\n

\u201cAt present, retail media only accounts for about one-tenth of a brand\u2019s total ad spending on average, but we\u2019re hearing from our clients and partners that more and more conventional media dollars are going to be reallocated to retail media,\u201d said Lisa Hurst, evp of marketing and strategy at full service creative shop Upshot Agency. \u201cEspecially as these networks become more sophisticated and better partners in executing omni-commerce campaigns. We expect to see more retailers launching their own media platforms.\u201d\u00a0<\/p>\n

Agencies with multi-national reach could end up benefiting, as RMNs are expected to grow quickly in other parts of the world as well, noted Carolyn Murphy, vp of Americas with WARC\/Ascential.<\/p>\n

The shadow of Amazon<\/h2>\n

Then there\u2019s the broader e-commerce world, which includes the granddaddy of them all, Amazon \u2014 a company that seems to grow but under the strains of a competitive pinch from companies like Walmart. E-commerce also includes livestream shopping, which hasn\u2019t quite materialized as its proponents would hope \u2014 although not for lack of trying.<\/p>\n

Possibly the main challenge within both the agency and client worlds \u2014 when progress is being made \u2014 is getting one side of the business to talk to the other. Shopper marketing budgets aren\u2019t the same as media budgets, and they\u2019re usually under different P&L lines in both agencies and brands.<\/p>\n

Likewise, much of lower-funnel, performance-driven media work relies on wholly different stats, KPIs and measurement tools than upper-funnel brand-driven efforts. For commerce media to deliver better results, those gaps need to be filled by other insights. That doesn\u2019t always happen.<\/p>\n

\u201cThe distinction at the client level between retail media performance media, or commerce media, is not a clear distinction,\u201d Jay Pattisall, vp and senior agency analyst at Forrester, told Digiday in September.\u00a0<\/p>\n

There\u2019s another potential challenge some brands will have to overcome in this growing space, noted Michael Shields in a recent Next in Marketing blog post<\/a>. He wrote that brands that don\u2019t already have shelf space with a retailer that offers an RMN can end up paying higher prices.<\/p>\n

But on the positive side, there\u2019s a good chance that media agencies will be able to figure out with their clients how to harness the right insights to start getting non-endemic categories (from autos to travel to entertainment) to spend their marketing dollars in commerce media. And why not? Just because you bought more detergent on Kroger\u2019s website doesn\u2019t mean you might not also be interested in a deal on a new car, right?<\/p>\n<\/div>\n

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