ADventures in Law

Home | ADventures in Law

As consumer habits evolve, new media channels emerge. Before the internet, brand media budgets were split between traditional media like print newspapers and magazines, radio, television, and out-of-home billboards. Now our attention has splintered along with our screens – and so have brands’ budgets, with hyper-focused media placements gaining in popularity. For in-house counsel fielding nonstop contract requests from their marketing clients, we want to demystify one new channel that is a media dollar magnet: retail media networks (RMNs).

core/paragraph

<a href="https://www.forbes.com/sites/nikkibaird/2023/02/23/retail-media-networks-are-having-a-moment-but-it-wont-last/?sh=32cf20ee8bd3" target="_blank" rel="noreferrer noopener">Forbes</a> may have said it best in one of its 2023 articles: “Retail Media Networks (RMNs) are really just a fancy way of describing retailers’ ability to use their own digital properties to sell advertising to brands, much like a media property would.” Big retailers that sell a mix of brands’ products and services under one digital roof were early to the RMN game and continue to dominate the space. RMNs from your favorite brick-and-mortar big box stores (you know the ones) emerged between 2011 and 2017. More recently, retailers like convenience stores, pet supply shops, and sporting goods retailers have entered the scene, per <a href="https://acadia.io/retail-media-networks-everything-ad-buyers-and-sellers-need-to-know-about-the-125-billion-trend/" target="_blank" rel="noreferrer noopener">Acadia</a>, a digital marketing platform. For retailers, the push to create a revenue stream by leveraging their first-party customer data via an RMN is strong. And they can do it without cookies, which is attractive to all of us as we face a cookieless future. Advertisers like RMNs because visitors show up ready to shop at the point of sale.

So, next time you’re scrolling through a retail app, look for ads and offers to pop up that resonate with you based on your transactional and demographic data. For me, that means a glamorous mix of BOGO children’s cold medicine, soccer socks, and laundry detergent. Lately, I’ve seen ads for antacids too.&nbsp;

In January 2023, the <a href="https://www.ana.net/content/show/id/77513" target="_blank" rel="noreferrer noopener">Association of National Advertisers</a> (ANA) stated that “projected RMN ad revenue will reach $52 billion in 2023, and $61 billion in 2024, capturing one in five digital ad dollars spent by marketers.” In its February 2024 article,&nbsp;<a href="https://www.emarketer.com/content/retail-media-accounts-one-fifth-of-worldwide-digital-ad-spend" target="_blank" rel="noreferrer noopener">eMarketer</a>&nbsp;charts worldwide retail media ad spend trending up from $50 billion in 2019 to an estimated $166 billion in 2025, which would be almost 22% of overall digital ad spend globally. The ANA credits RMN strength, in part, to retailers’ massive data collection during the COVID-19 lockdown, when online shopping spiked. Additionally, the ANA reports that while brands are optimistic about RMNs, they view these as “have to buy” properties for brand positioning purposes. To me, this feels like the new version of the supermarket endcap. Brands always want to be in sight and in mind for their shoppers, online as well as in store.

For in-house counsel on the advertiser side, here’s what to know when an RMN media buy comes across your desk:

Key Retail Partners: These may be presented as “must do” urgent opportunities from Marketing. Your Marketing team will identify key retail partnerships and push hard to close those media agreements early in your fiscal year. Some of these relationships are presented like “up fronts” with a dedicated media spend for the year, with more detail to come later. I know how all lawyers feel about a vague contract for six-plus figures. Thankfully, those ads for antacids will find you too.

core/list-item

core/list

Exclusivity: Some dedicated sponsorship opportunities within an RMN may be exclusive in your product category, but retailers have important multi-brand relationships to maintain. So, exclusivity in a general RMN media buy isn’t realistic.

Shopper Data: Retailers guard their first-party data for commercial and privacy reasons. While the norm is to share reports and key analytics, don’t expect full access to or ownership over the transaction data.

Governing Terms: Some RMNs use the <a href="https://www.iab.com/wp-content/uploads/2015/06/IAB_4As-tsandcs-FINAL.pdf" target="_blank" rel="noreferrer noopener">Interactive Advertising Bureau’s Standard Terms and Conditions for Internet Advertising for Media Buys 3.0</a> (IAB 3.0), or a variation thereof, to govern the terms of the media placements. Others use bespoke terms for that RMN specifically. So, you’ll need to review carefully and discuss commercial and risk expectations with your clients who are used to some operational standards within IAB 3.0 that may vary on an RMN.

Media Agency Involvement: Most in-house marketing attorneys rarely see detailed media buy agreements because brands hire agencies to recommend and place their media buys. And those media agencies have lean but mighty legal teams that negotiate the terms on behalf of their clients (and therefore can recite the oft-negotiated portions of IAB 3.0 in their sleep). Some advertiser and RMN agreements are direct, so you may not have the benefit of an agency negotiating the agreement.

Resources: To learn more about RMNs, here are some good places to start. The IAB published recommended <a href="https://www.iab.com/wp-content/uploads/2024/01/IAB_Retail_Media_Measurement_Guidelines_January2024.pdf" target="_blank" rel="noreferrer noopener">Retail Media Measurement Guidelines</a> in January 2024 in collaboration with the <a href="https://mediaratingcouncil.org/sites/default/files/Standards/Mobile%20In-App%20Measurement%20Guidelines%20%28MMTF%20Final%20v1.1%29.pdf" target="_blank" rel="noreferrer noopener">Media Rating Council</a>, a not-for-profit media industry self-regulatory body. The <a href="https://www.ana.net/miccontent/show/id/rr-2023-01-ana-retail-media-networks-partnership" target="_blank" rel="noreferrer noopener">ANA’s Comprehensive Research Report on RMNs</a> from January 2023 also has valuable insights.&nbsp;

Media Insights for In-House Counsel: Retail Media Networks