Consumer goods manufacturers that sell to your local accounts are ramping up their retail media strategy. This strategy encompasses shopper marketing tools such as trade promotions and co-​op advertising programs. Retail media now includes a range of media formats aimed at convincing consumers to buy the promoted brand.

The Value of Retail Media

The increasing investment in retail media programs leads some analysts to predict an annual commitment exceeding $50 billion before long. Manufacturers are always adjusting their retail media mix. This mix includes display ads (including video) in stores, search engine shopping ads, social commerce, and CTV streaming ads.

Around 82% of surveyed organizations claim their retail media performance met or exceeded KPI expectations last year. This kind of success explains why manufacturers are eager to continue investing. Here’s what they plan this year, according to The 2025 State of Retail Media Report produced by Skai.

On average, these vendors pay for advertising on six retail media networks. But their investment goes beyond advertising on in-​store video screens.

Here are the formats they say are extremely important in the coming year:

• Retail media 92%
• Social advertising 40%
• Shopper marketing/​trade promotions, co-​op advertising programs 43%

Media Formats

Vendors noted the following specific plans for this year’s spending.

On-​site Search Ads

This year, 77% will increase their budget for on-​site search ads. These ads appear when shoppers search a retail website for a specific product, especially on their phones. Around 71% will spend more on social commerce ads this year.

Co-​op Marketing

At least 49% plan to increase their marketing co-​op programs. Analysts point out that’s a significant jump from last year. They also indicated the co-​op advertising program growth was especially strong in the consumer electronics category.

Paid Search and Social

In addition, about 25% of the typical vendor’s paid search and social marketing budget is earmarked for supporting retail partners.

Retail Media CTV

More businesses are showing interest in retail media CTV. By using a retailer’s customer data, businesses can target audiences with ads in the CTV platforms.

However, CTV cost is a stumbling block for 58% of surveyed businesses. And over half struggle to find good tracking and measurement methods. 

Working with Retail Partners

Developing a retail media budget allocation requires monitoring multiple data points. The top considerations include media mix modeling recommendations, results of performance measurement and business plans (all at 38%). However, 33% seek input from their retail partners.

Decisions about increasing investment are not made in a vacuum. Marketers heavily account for retailer insights, potential ROI, and the ease of measuring ROI.

While retail media spending accounts for a significant part of a business’s marketing budget, the investment is not static. These budgets can be reduced for a variety of reasons.

For example, more retailers are selling private label products at a reduced price which consumers find enticing. In this case, there’s little opportunity for vendor branding efforts.

CPG firms may also pull back on retail media because they can’t prove their investment is driving additional revenue. They may also realize the ROI may be lower than what they are getting from other media formats.

As the number of retail media formats increases, organizations fear falling behind. Their teams constantly monitor new developments. And when they can’t keep up in-​house, they are reaching out for retail media expertise. If you possess these skills, you may be able to pitch your services.

Co-​op Advertising Programs

Despite the challenges, retail media is here to stay as a full-​funnel strategy. Manufacturers are more committed than ever to buying advertising on retail media networks at large retailers.

They also see the value of local advertising done with dealers through co-​op funding programs. Some of these programs are considered formal with documented accrual and reimbursement rates. Vendors also specify which media formats they will approve in these programs.

Other programs fall into the negotiable category. If you are selling media space to a local dealer that carries products eligible for negotiable funding, don’t miss this opportunity. The dealer can pitch the vendor on the ad campaign they’d like to run.

Share data with them on how target audiences respond to advertising by checking out AudienceSCAN from AdMall. And with that same subscription you’ll also find information on thousands of co-​op advertising programs. With the potential paid advertising before them, more local dealers will want to sign a deal with you.

As your clients work with their large suppliers, they should know more about retail media.

A typical CPG organization may allocate 25% of their marketing budget to retail media. They then use shopping market budgets, national media and trade budgets to fund the rest of the cost of these programs.

Remind your clients that co-​op advertising programs and other retail media support can help them increase sales.

Photo by Kindel Media on Pexels.