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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
The critical differences in US and EU retail media
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[00:00:00] Kiri Masters: I wasn't expecting a fight when I published a piece about Sam's Club's in-store Retail media success. The article talked about measurement capabilities, parking lot activations, And member level [00:00:15] attribution, straightforward coverage of a US retailer executing well on physical media formats.
[00:00:22] The pushback that I got came from across the Atlantic. Multiple retail media leaders started [00:00:30] arguing that in-store media has been operating successfully at scale in their markets for years. That the US percentages I cited didn't reflect the reality in Europe, and that perhaps I was missing the bigger picture about what's [00:00:45] possible
[00:00:45] with physical retail formats. They had a point.
[00:00:48] Here's the data that sparked the conversation. When you strip out. Amazon's dominance in store will represent only 3.3% of US retail media spend according [00:01:00] to e-marketer research, but several European networks are operating with in-store, representing much larger shares of their retail media revenue.
[00:01:08] So what's going on? Are other markets simply ahead, or are these markets [00:01:15] so structurally different that a comparison is misleading? I spent a couple of weeks digging into this question, talking to people operating retail media networks on both sides of the Atlantic, and what I've learned is that both [00:01:30] explanations are true.
[00:01:31] And understanding why matters for everyone in this industry, regardless of geography.
[00:01:38] Just like natural selection. Retail media markets have evolved under legitimately different conditions. Some of [00:01:45] these differences are hard structural barriers. Others are organizational choices that have calcified into, that's just how we do it around here. And distinguishing between the two reveals opportunities, both [00:02:00] markets might be missing today's episode is in the bridge version of an article that I wrote for the drum called The Critical Differences in US and EU Retail Media Operations.
[00:02:13] You need to understand it was published on [00:02:15] February 10th. I'm only gonna be able to share a bit of a recap in our 10 minutes today. If you want to get into more detail, do check out retail media breakfast club.com to read the full piece. Let's jump in.
[00:02:29]
[00:02:30] Kiri Masters: So there are five hard barriers, five major differences between the us, uk, European retail media operations that aren't about [00:02:45] sophistication, capability, vision. They're about legitimately different market conditions that shaped how these industries developed.
[00:02:54] The first is the Robinson Patman Act. This US law [00:03:00] makes it much harder for brands to use trade dollars in ways that clearly favor one retailer over another, and that's helped to reinforce a rigid separation between trade marketing budgets and retail media budgets, and that is a [00:03:15] distinction that doesn't exist in other markets.
[00:03:18] Retailers in various European markets can tap existing supplier relationships and budgets and then elevate their retail media offering. But in the US. [00:03:30] RMNs faced a harder challenge. They had to pursue entirely new budget pools as Drew Cashmore, the Chief Strategy Officer at Vantage, documented in his analysis of those different buckets, US [00:03:45] networks needed to compete for brand marketing dollars that were typically allocated to Google Meta and traditional publishers.
[00:03:53] ~In short, this law means it's harder for brands to allocate.~
[00:03:53] ~In short, this. ~In short, this arcane law, which gets interpreted differently, company by company, [00:04:00] it means that the budgets that are available to spend
[00:04:03] Aren't as transportable as they might be in other markets. Another difference in the evolution of retail media between markets is that e-commerce [00:04:15] penetration has created a bit of a path dependency according to e-commerce research. US advertisers in their sample allocate an average of 18% of their ad budgets to retail media.
[00:04:29] ~While European markets typically range from six to 18% depending on the category, which is~
[00:04:29] ~while, ~while [00:04:30] European markets typically range from six to 18%, when digital scaled first in the us, drew Cashmore notes that every retail media business inadvertently positioned itself as a direct competitor, Amazon and Walmart. [00:04:45] Who were really good at sponsored product ads, but Europe's path was different.
[00:04:51] European retailers have been monetizing in-store advertising for years before we ever started calling it retail media. Because [00:05:00] e-commerce developed and matured later in Europe, retailers maintained and professionalized their in-store infrastructure rather than pivoting wholesale to digital formats. [00:05:15] Miracle Ads is the only retail media solution designed for both one P and three P Marketplace brands. Why does that matter? Marketplace sellers demand a [00:05:30] seamless advertiser experience that still offers full funnel ad formats, and retailers need a flexible solution that allows you to scale your media business.
[00:05:41] Learn more@miracle.com. That's [00:05:45] M-I-R-A-K l.com.
[00:05:48]
[00:05:49] Kiri Masters: Another hard structural barrier is data regulation. GDPR makes leveraging customer data significantly more complicated. In Europe, European [00:06:00] retailers have to navigate significantly more stringent privacy compliance than their US counterparts. Especially for offsite audience extension. That has slowed some of the more aggressive.
[00:06:13] Data monetization plays that we've [00:06:15] seen in the us, even if the underlying ad tech is similarly advanced. And finally, geography density that affects in-store economics.
[00:06:26] The number of stores, the location of [00:06:30] them, the size and format. These are all things that drive differences in the capital expense required for the hardware and the connections that are essential for in-store digital.
[00:06:44] [00:06:45] Advertising, high density in urban centers makes screen deployment more economically viable compared with many markets in the US which are notable for strong car culture and suburban sprawl. Now, not all [00:07:00] differences are structural.
[00:07:01] Some barriers are organizational or cultural. So one is internal p and l warfare,
[00:07:09] the trade marketing versus shopper marketing versus brand budgets.
[00:07:14] [00:07:15] these are harder lines in general in the US compared to other markets where things are a little bit more fluid
[00:07:21] The thing is markets all around the world are different. They're all facing disruption and challenges in different ways. AI [00:07:30] disruption, advertiser fatigue and measurement demands. No one market has the answer. We all have lessons to teach and learn the US. Needs to recognize that some barriers to format innovation [00:07:45] are mostly, uh, self-imposed organizational choices rather than market realities.
[00:07:51] And other markets might learn from the US' early forays into onsite advertising, both positive and [00:08:00] negative. We are all here because millions of people shop every day. Whether in store represents 3% or 30% of your retail media mix.
[00:08:10] That fundamental value proposition hasn't changed. The retailers [00:08:15] who will win are the ones that will learn from other markets while respecting their own structural realities. In an industry where standing still means falling behind, understanding why we're different matters just as much as learning [00:08:30] from those differences.
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