Latest / Retail Media Breakfast Club / Why Long-Tail Advertisers Are Becoming Retail Media’s Biggest Growth Engine
Transcript
- Long-Tail Advertisers Are A Quiet Growth Engine For Top Performing RMNs === [00:00:00] Kiri Masters: Retail media networks are ponying up the big bucks to match Amazon and Walmart's advertising capabilities. Better measurement, self-serve platform, sophisticated targeting, all in the hopes of breaking into the top tier [00:00:15] where the big CPG brands allocate their budgets. ~But there's a problem.~ [00:00:19] ~Those big brands aren't expanding the number of retail media networks. They. ~But there's a problem. Those big brands aren't expanding the number of retail media networks that they're working with. As I wrote last week, a lot of them are [00:00:30] hitting a hard ceiling at half a dozen retail media relationships and no amount of capability improvements is going to change that.~ change that.~ [00:00:40] ~And they say that no amount of capability improvements~ data from Penta LEAP's new 2025 [00:00:45] sponsored products. Benchmark report that was just released a couple of weeks ago reveals what's actually driving retail media network growth, and it's not just about clocking in more Fortune 500 advertisers. A key strategy for [00:01:00] retailers is in activating the long tail of smaller brands and third party sellers and allowing them to advertise on a retailer.com. [00:01:10] Retailers who've cracked this are seeing big results while their [00:01:15] competitors [00:01:15] chase displacement strategies that are getting harder and more expensive to execute on. Let's dive in. [00:01:22] [00:01:23] Kiri Masters: Last week I shared a comment that Kelly spi, who is Mars' Global Retail Media Strategy Director, [00:01:30] made at the past Purchase Institute live conference, um, which she described the company's formal investments matrix, which is a scorecard that evaluates retail media networks on their capabilities and scale. [00:01:44] [00:01:45] The output is a ranked list of RMNs with tactical guidance for each region on how to engage with them. Mars, like many large CPG conglomerates that I've spoken with about this, isn't really [00:02:00] interested in expanding the number of RMN partners that they have. [00:02:04] They are focused on optimizing allocation across existing partners. That's because the operational burden compounds for a [00:02:15] brand with each new network that they're actively managing. There's different platforms, inconsistent measurement, fragmented reporting, complex commercial negotiations, even with dedicated. [00:02:28] Retail media, buying [00:02:30] teams and specialized agencies. A lot of brands cap around six relationships because the marginal value doesn't justify the marginal effort. So if the biggest [00:02:45] CPG advertisers stop at half a dozen networks, that's a ceiling on industry growth. [00:02:51] And here enters the long tail advertising. This data from Penta LEAP's second half of 2025 report [00:03:00] shows that a lot of growth is coming from the thriving ecosystem of long tail advertisers. Industry wide, the long tail share of impressions grew from 69% to [00:03:15] 71% year over year. That sounds incremental until you look at some of the specific retailers outside of the big guys like Amazon and Walmart. [00:03:26] So Kroger, their long tail advertiser share jumped [00:03:30] 11 percentage points rising from 69% to 80%, and in fact, their head advertiser share. So the biggest brands that were advertising with Kroger sponsored products actually fell 21 percentage [00:03:45] points. [00:03:46] Albertson saw long tail advertisers increase nine percentage points from 65% to 74% ~and for the Home Depot tail impressions.~ [00:03:52] ~Okay. ~And for the Home Depot, long tail impressions surged 15% while head advertisers dropped [00:04:00] 16% as well. But the standout example to me here, the biggest gain in long tail advertisers is Lowe's. So Lowe's launched its third party marketplace in late 2024 and year over year. [00:04:15] Lowe's has seen an expansion of long tail advertisers on the platform. [00:04:19] The Pen Leap report explicitly highlights this, noting that Lowe's increase its share of head impressions as an onboarded larger marketplace sellers, while [00:04:30] simultaneously expanding total long tail Advertis account by 23% year over year. This shows how third party sellers. When provided with the right tools can drive considerable incremental advertising revenue for retailers. [00:04:45] Retailers know that a marketplace model can dramatically boost product assortment, shopper engagement, and total revenue. But to get the most out [00:05:00] of your marketplace, you need an ad tech solution that can really engage sellers. Miracle Ads is powering the future of retail media for leading retailers to activate both three P Sellers and one P brands.[00:05:15] [00:05:15] Learn more@miracle.com. That's M-I-R-A-K l.com. [00:05:22] [00:05:23] Kiri Masters: Forrester Research commissioned by miracle validates what Penta LEAP's numbers suggests. According [00:05:30] to Forrester, the average retail media network gets 28% of its revenue from mid to long tail advertisers. And here's an example of how advertising economics can be bolstered by marketplace sellers. [00:05:42] Rakuten's marketplace in France [00:05:45] supports more than 10,000 potential mid to long tail advertisers. When Rakuten shifted to Miracle Ads, which is a platform built specifically to scale automated self-serve campaigns amongst the bigger group of advertisers, [00:06:00] they saw monetization improve by 53%. As more sellers were able to participate without added operational burden. [00:06:08] And just as a side note, miracle Ads is the sponsor of this podcast. [00:06:12] But the same research from Forrester [00:06:15] finds a big gap between what retailers recognize as valuable and what they're actually satisfied with. Among the top challenges in scaling retail media is the inability to manage the long tail of advertisers and marketplace [00:06:30] sellers. That's one of the biggest concerns from retail media networks. [00:06:33] The problem is that most retail media tech stacks were built for managing 50 to a hundred relationships with major suppliers, not five or 10,000 marketplace sellers. ~Long tail requires frictionless self-serve onboarding. You can't be, you can't be running these campaigns for these advertisers. You need automated campaign management and.~ [00:06:44] ~Long tail. ~The [00:06:45] long tail marketplace seller needs frictionless, self-serve, onboarding, and automated campaign management. Maybe smaller is better. Many big brands say they've hit their ceiling and just can't [00:07:00] expand to new retail media relationships. And while many retail media networks pursued national brand budgets as a growth lever, as I shared yesterday, that requires a very specific and long term. Sales [00:07:15] motion to win national brand advertising budgets. [00:07:18] Retail media networks need to invest in building relationships and capabilities with advertising agencies, and that takes time and specific talent. Retail media networks [00:07:30] shouldn't overlook the smaller end of town as an alternate or even complimentary growth strategy. Rethink your minimum viable advertiser with the right model and ecosystem. [00:07:43] Retailers may be able to [00:07:45] drive future growth through quantity, but it likely requires completely different infrastructure than what most networks have built. [00:07:53] PS I'll be diving into the findings of that Penta Leap Sponsored Products Benchmark study that I [00:08:00] mentioned earlier. Next week on Thursday, December 4th at 11 Eastern Time. Join me and Penta Leap, CEO, Andrea Shreen, to talk about the findings from that report and ask your questions [00:08:15] live. I'll link up to that event in the show notes of this podcast. [00:08:18] I hope to see you there. And finally, retail Media Breakfast Club is off for Thanksgiving this week, so I'll catch you next on Monday. [00:08:26]