Retail media has emerged as a crucial revenue stream for major retailers, redefining supplier relationships as vendors become advertising clients. This shift requires retailers to compete for supplier marketing budgets, changing the entrenched cooperative advertising structure. While traditional co-op advertising provided retailers with leverage and control over fund usage, retail media demands transparency and accountability from retailers. As a result, retailers must adapt to build performance-based partnerships, leveraging cooperative ad funds to capitalize on the evolving marketplace where accountability becomes essential.
"Because of retail media, the power dynamics have shifted a little bit," said Drew Cashmore, chief strategy officer at Vantage, a retail media management platform, during an interview.
Retailers control how funds are spent, and suppliers have limited insight into performance. But the balance changes with retail media.
Retail media has, in some cases, transformed suppliers into advertising clients, forcing retailers to compete for those marketing budgets.
However, thanks to co-op monies, many traditional retailers seized the opportunity to earn revenue beyond selling goods to consumers.
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