DMEXCO Column: Retail Media in 2025

Where the advertising channel can still be optimized

Even though January is a month for looking forward, I would like to take a brief trip down memory lane: in 2015, Angela Merkel was still chancellor, Microsoft released the Windows 10 operating system, and only absolute experts had heard of Retail Media in Germany. Yet the advertising channel had already been around for almost 10 years. In 2006, it started on the other side of the Atlantic: Amazon had begun to strategically align its advertising marketing, and other large companies followed

Confetti, party hats and celebrations

So, we could celebrate ten years of Retail Media in Germany this year. But do we have reason to do so? In reference to an old advertising slogan, I would rather put it this way: there is still a lot to do. Let’s get to it.

Last year, we at The Federal Association for the Digital Economy (BVDW) asked advertisers about their Retail Media experiences. Our Retail Media Ecosystem focus group also wanted to know which Retail Media providers the respondents had already worked with. 89 percent of the respondents named retailers or their Retail Media networks, while 66 percent said that they had worked with network marketers. In turn, just under 54 percent mentioned AdTech providers and 49 percent offsite publishers. How many had not yet worked with Retail Media providers? Zero.

It is obvious: Retail Media has become established. The channel is considered to be particularly important for the upper funnel: just over half rate its potential impact for the upper part of the conversion funnel as high, and a further 17 percent even rate it as very high.

What are the reasons for this popularity? There are figures for this too: Almost 90 percent of respondents cited targeting based on shopper usage behavior and purchase data as an advantage of Retail Media for upper-funnel campaigns, while 60 percent estimated that the retailer platform acts as a pre-filter for a ready-to-buy user group. Also, 60 percent pointed to a higher conversion probability after the use of an awareness campaign.

Roll up your sleeves and get to work

However, we don’t want to be satisfied with the status quo. That also means – after a good party, it’s back to work. Not all advertisers are yet fully convinced by Retail Media – especially in the upper funnel. They still see room for improvement, particularly in terms of pricing and reach.

The results of the 2024 Trendmonitor of Die Mediaagenturen (the group of media agencies represented in the BVDW and their own trade association) also show that there are still enough challenges to overcome. In a far-reaching deep dive they are for the first time dealing with Retail Media. For example, with regard to the product portfolio, Two-thirds of the agencies surveyed for the trend monitor said that offsite possibilities in the form of data activation could still be improved by retailers and their media offerings. In plain language, they would like more options for using customer data in a targeted way to personalize advertising measures outside of their own website or app. Expanding offsite data strategies is an important step for retailers to reach their target groups beyond their own channels, increase reach and execute more targeted and effective campaigns.

According to Die Mediaagenturen, there is also room for improvement in the area of activation. For example, three quarters of the respondents say that self-service is lacking. The agencies would like to see better tools and platforms that they can use to independently and flexibly create, manage and evaluate campaigns. Detailed targeting, performance tracking or automated optimization are at the top of the wish list. What is needed here are simpler interfaces and better support. And as with any young media genre, reporting is at the top of the list for Retail Media. Standards should help to measure the added value of advertising measures and to increase product sales in a targeted manner. Incrementality also plays an important role here.

2025 is the year of actions

So let’s be aware: Retail Media offers enormous potential, especially for upper-funnel campaigns. And as is so often the case, there is still a lot of work to be done by all parties involved to exploit the full spectrum of this channel. The topics discussed, such as offsite data activation, self-service platforms, reporting standards and the organization of sales, show that the Retail Media industry still has some challenges to overcome in 2025 – but they also reflect the high level of interest on the demand side in being able to use Retail Media in an even more targeted way in the future.

The good news is that work is already being done on this. The figures show that Retail Media has found a permanent place in the marketing mix and that the industry is playing a leading role in developing solutions through the BVDW, among other things. In 2025, we will not be able to avoid investing in technology, organization and service – but if we invest wisely, 2025 could be a milestone year for the channel.

What will be crucial in 2025 is one of the topics we will be discussing at the BVDW Retail Media Festival Vol. 2 on February 6. We will be talking to future shapers across committees about Retail Media. It all kicks off at 10 a.m. at the LAYA Group in Munich. The day’s program includes case studies, current developments, impulses, discussions and much more. In any case, one thing is clear to me: in 2025, we will certainly have more than one reason to celebrate again. And I’m sure one or two people will don their party hats for this.