Inside Mars’s Retail Media Investment Matrix — Why Only the Top 6 Retail Media Networks Win

Inside Mars's Retail Media Investment Matrix
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[00:00:00] Kiri Masters: At the Path to Purchase Institute live conference last week, Kelly. shar stood on stage and described something. Most retail media networks would rather not hear mars's snack Business has built a formal [00:00:15] scorecard to decide which networks get budgets and which don't.

[00:00:20] Here's what Shar, who is mars's Global Retail Media Strategy Director, told the audience, she said they've created what they're calling an [00:00:30] investments matrix, which evaluates networks on two dimensions, retail media capabilities such as audience targeting, reporting, and all the features that are offered, and commercial growth, which is things like partnership sales, net sales [00:00:45] value, and future growth potential.

[00:00:47] The output is a ranked list of retailers for each region that Mars operates in complete with tactical guidance, like start with search, expand to onsite display, then offsite display, maybe CTV [00:01:00] eventually, ~and she says that.~

[00:01:00] ~And ~And she says that Mars has found this super beneficial, just a guide on how and where to invest, which has been a big piece of work. This is what accountability looks like when it moves from theory to practice. And Mars [00:01:15] isn't alone with building a formal evaluation network for retail media.

[00:01:19] But here's the downer. Even when networks make the cut on paper, it might not translate to increased media spend. Let's dive in.

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[00:01:29] Kiri Masters: [00:01:30] The Association for National Advertisers, the A NA recently released guidance recommending exactly this approach in their retail media internal management guidance report. In September, the a NA tells brands to implement a scorecard [00:01:45] framework that evaluates retail media networks based on ~business goals, account size based on business goals, account size.~

[00:01:48] ~Based on a few different factors like ~business goals, account size, brand growth, past performance, platform capabilities, et cetera, rather than reactive spending or sales led pressure. This [00:02:00] report, which was developed in collaboration with 17 major CPG brands. Identifies fragmented budgets with a lack of clear accountability as a core problem.

[00:02:09] And so this scorecard approach seems to address a genuine problem that brands have, which is [00:02:15] turning retail media ad spending from a sales negotiation into a performance conversation. But there's an uncomfortable truth underneath all this structure.

[00:02:26] A couple of months back I spoke with a senior retail media buyer at a [00:02:30] multinational CBG conglomerate who's built exactly this kind of scorecard. Their framework evaluates networks based on scale capabilities, incremental roas, growth trajectory, total store performance, and online share growth,

[00:02:44] [00:02:45] they've set basically a capabilities floor where they won't entertain the idea of spending on any new network unless they meet those clear minimum standards. But here's the rub. When I [00:03:00] asked. This media buyer, if they would expand beyond their current five to six retail media relationships. If suddenly tomorrow more networks met their requirements, the answer was immediate.

[00:03:12] I've told this story before, it might be familiar to, [00:03:15] to you. This CPG conglomerate would not spend on new networks, even if they managed to reach all of their requirements. They said the revenue contribution simply isn't there for incremental media networks, and the [00:03:30] juice isn't worth the squeeze in terms of managing and additional relationship.

[00:03:35] Despite all the complaints from brands, this isn't just about retailers failing to perform or provide standardized [00:03:45] measurement. Some networks on their scorecard would pass these capability requirements. The constraint is actually operational capacity on the brand's side.

[00:03:55] You've probably heard this research before, that the average brand works with only about [00:04:00] five, six, maybe seven retail media networks, and that number hasn't budged. Even as dozens of networks have launched and matured.

[00:04:08] Even Mars with its sophisticated matrix and regional guidance isn't signaling plans to dramatically [00:04:15] increase the number of networks that they activate against. The Matrix is fundamentally a tool for managing existing relationships more strategically, not for scaling to additional partners. The ceiling on the number of networks that a brand is willing to work with [00:04:30] directly is a ceiling on the growth potential of retail media as a whole, and that's why some solutions have been proposed to solve this supply and demand gap, which I've spoken about before, including retail media consortiums and time [00:04:45] bidding. Miracle Ads is the only retail media solution designed for both one P and three P Marketplace brands. Why does that [00:05:00] matter? Marketplace sellers demand a seamless advertiser experience that still offers full funnel ad formats, and retailers need a flexible solution that allows you to scale your media business.

[00:05:13] Learn [00:05:15] more@miracle.com. That's M-I-R-A-K l.com.

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[00:05:22] Kiri Masters: There's a number of reasons why brands cap their RMN relationships. I've gone into a little bit more detail on the blog version of this [00:05:30] episode. Just to recap them super briefly, these include platform fragmentation, so having all of these different self-serve platforms that you need to plan, buy and report on ad spend.

[00:05:44] Number [00:05:45] two, measurement inconsistency. Basically every retail media network measures things a little bit differently and provides different numbers on their scorecard. Number three, relationship management. Each of these retailers have their own cadence [00:06:00] of sales JVPs and.

[00:06:04] Negotiating retail media ad spend. Interesting here is that brands are increasingly pushing for merchants to be brought into retail media conversations, some brands are giving [00:06:15] more preference to retailers that bring their merchants to the table, notably, recently, this is something that Hold Del Hayes talked about leaning into this model.

[00:06:26] They call it a two in a box strategy where they see. very [00:06:30] specifically are bringing both retail media and merchants together to those brand conversations. And clearly that's a big differentiator for them. And the fourth reason why brands cap their RMN relationships is the complexity of [00:06:45] commercial.

[00:06:45] Negotiations. Every network has different commercial terms, budget structures, expectations around joint business planning commitments. Multiply that by 15 networks, and you've created a full-time job just mapping and [00:07:00] managing those commercial relationships. So scorecards seem on the face of it, a great solution for brands looking to minimize the chaos.

[00:07:10] But here is the issue. They formalize which incumbent [00:07:15] networks keep their budgets and which ones get cut. They do not create expansion opportunities for mid-tier networks. They create a performance bar that protects the top six. [00:07:30] I've heard from media buyers at two separate CPG conglomerates that they show their retail media network partners.

[00:07:36] Blind competitive data. Something like, here's where you sit on eye, OAS versus the other networks that we work with. [00:07:45] On one hand that transparency creates accountability on the retailer side. Retailers know what they're evaluated against, but it doesn't open slots for new entrants. Emerging retail media networks could do all the right things.

[00:07:59] They [00:08:00] could invest in better measurement, improve targeting capabilities, build self-service platforms, and still not crack the top six because they're not displacing enough revenue to justify the operational burden. [00:08:15] I call this trap, the rich get richer. So now what scorecard can solve real problems? They bring data discipline to budget conversations.

[00:08:24] They give marketing teams ammunition when sales wants to overcommit to a retailer, [00:08:30] but they do also perpetuate this fragmentation problem that the industry keeps talking about. And if anything, they formalize it.

[00:08:38] I'm not suggesting that brands shouldn't have scorecards, but they should be aware of the top heavy [00:08:45] situation that they may perpetuate, and for the mid-tier retail media networks hoping to break into the top six, they need to understand they're not competing on capabilities alone, they're competing for displacement.

[00:08:57] So they need to either grow [00:09:00] their suppliers, businesses so significantly that the brand can't ignore the revenue contribution. Or they need to offer something so significantly superior in terms of targeting or inventory [00:09:15] that they justify the operational burden of onboarding mid-tier retail media networks simply cannot just copy what has been done before.

[00:09:23] They need to offer something truly unique. The last potential path is to make integration [00:09:30] so seamless that they've reduced rather than increase complexity. And this is, as I mentioned earlier, a reason why these alternative structures are being considered such as best bike positioning itself as ad [00:09:45] infrastructure for other retailers.

[00:09:46] Or the idea of federations and consortiums, even real time bidding, making a play for a second act in retail media. If mid-tier networks can plug into existing workflows rather than requiring [00:10:00] separate management, maybe the operational ceiling lifts, but for now, most brands are gonna do exactly what Mars described.

[00:10:08] They're going to build matrices and decision frameworks to optimize allocation across a fixed [00:10:15] set of partners. The scorecards are coming. Not to expand the playing field, but to defend it.

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