Good morning from Retail Media Age HQ,
Retail media “underperforms” on long-term brand building: that’s one of the key takeaways from Warc’s recently-released Future of Commerce Media 2026 report, according to Alex Brownsell, Head of Content at Warc Media.
The findings from the report paint a mixed picture with plenty of reasons to be cheerful but also some notes for areas of improvement – though these are unlikely to be a huge surprise for anyone working in the industry.
As usual, there’s a growth story, with the headline stat being that the global retail media ad market is set to pass $200bn worth of investment this year and surpass $220bn in 2027, by which point it’ll account for more than 15% of total worldwide ad investment.
But, the report warns, the growth is slowing, particularly in Europe where year-on-year spend growth has dwindled to single digits while the US market remains more solid. I personally can’t see this as much of an issue – the conversation around retail media is already shifting away from growth towards “What next?” as the channel matures, and we’re all aware that exponential growth can’t be sustained forever.
Given the well-publicised drawbacks of that growth, such as a fragmented and often tricky to navigate landscape, it’s only right that attention turns to shoring up the foundations of retail media so that it works as well as possible for those who are investing – and can credibly make the case for why advertisers (and agencies and retailers) should invest besides, “Because everyone’s doing it!”
What I find more interesting are the report’s points about brand-building and creative. Again, it’s not a huge shock to anyone who works with retail media that the format still isn’t that well-suited to building brand; the research reveals that “retail media ads are good at converting existing demand, but bad at generating long-term outcomes”. The research announcement goes on to specify that retail media needs to overcome “creative shortcomings” to “ensure the effectiveness of retail media campaigns”.
It’s true that retail media has been slow off the starting block with creative, but attention is definitely turning in that direction; the other week I highlighted some interesting partnership announcements that show creative is unquestionably top-of-mind, with players like Adobe and Giphy involved in high-profile collaborations.
The Future of Commerce Media 2026 also has some encouraging findings that show how good creative can pay off. For shoppers who are undecided, high-quality creative can drive a 12% lift in short term brand choice – while for shoppers who aren’t even in market, high creative quality offers a 21% advantage in performance when compared with lower-quality ads.
One more interesting point on the top-of-funnel brand building front is that Warc Media’s forecasts show video on-demand (VOD) is “poised” to overtake retail media’s global ad investment by 2028, with connected TV (CTV) already representing 23% of retail media spend. The report points towards Walmart’s just-completed acquisition of self-service streaming TV acquisition Vibe.co as evidence of how retail media networks can provide an entry point into CTV for smaller brands.
Which just adds to my long-held theory that everything is, or soon will be, retail media.
(P.S. Our next RMA Lunch is coming up quickly on 10th September. Have you bought your ticket yet?)
