Where Will In-Store Retail Media Investment Come From?

In a 2024 AdWeek op-ed, co-authored by Keith Bryan, we argued that as in-store digital screens begin to proliferate:

[P]hysical stores will begin to emerge as the “new TV”—a mass-reach advertising vehicle ideal for national brands. Digital surfaces inside retailers’ four walls—whether at the front of the store, checkout, endcap, smart cart or cooler doors—deliver much of what brands want and what linear TV has lost: fast reach, high attentiveness, younger audiences and cultural relevance.

As brands continue to struggle with linear TV’s decline, they should commit to investing 5% of existing linear TV budgets in in-store media by 2025.

We understood that a near-term 5% budget shift was unrealistic. But it also wasn’t a crazy idea to consider. Our main point was that brands should deliberately shift a slice of that budget into a channel reaching audiences that linear TV can no longer reach as efficiently.

The same logic applies to several other large media budgets that don’t work as hard as they used to—or to the extent that marketers think they do. A marginal slice of a massive budget is a realistic way for advertisers to migrate dollars into high-potential formats like in-store retail media.

In addition to linear TV, here are the other budgets advertisers should look to shift first.

The programmatic budgets flowing into in-store retail media today are primarily digital-out-of-home (DOOH). But those dollars come at a trickle because in-store is a small sliver of an already modest DOOH ad market. It may be the easiest to shift right now, but that budget should be a bridge to the future rather than the primary funding source.

Programmatic video, in my estimation, are the most obvious dollars to funnel into in-store retail media. The channel generates a lot of ad waste due to fraud and inattentiveness, and has creative that can adapt to the in-store environment.

While it once seemed like premium inventory that could extend (or even substitute for) linear TV reach, the channel has proved a weak and ineffective proxy. Because it was never really premium. It always appeared on smaller screens and competed for attention with other ads and content. It has largely been a nuisance to audiences—and that’s when it actually reaches human eyeballs.

Programmatic video has also historically been a magnet for ad fraud because fraud chases CPMs. Despite these serious media quality issues, it hasn’t slowed down ad investment. According to Emarketer, programmatic open web video will be a $30 billion ad market in the US this year, an increase of more than $10 billion in the past three years.