Media agencies face satisfaction decline as retail budgets surge 20%

Media agencies are experiencing a complex paradox as retail media budgets surge by approximately 20% while satisfaction levels with retail media networks drop from 66% to 44%, according to findings presented at the IAB Australia Commerce & Retail Media Summit held on July 29, 2025. This decline in positive sentiment emerges despite significant new investment flowing into the sector, creating friction points that industry leaders attribute to measurement standardization challenges and limited agency participation in network development.

The summit panel, featuring Kelly Wearmouth from Mars United Commerce and Leah Jackson from WPP Media, addressed persistent challenges facing agencies as they navigate the rapidly expanding retail media ecosystem. According to the discussion, approximately two-thirds of survey respondents came from media agencies, making their declining satisfaction particularly significant for network operators seeking sustainable partnerships.

Jackson, who transitioned from brand-side work at Goodman Fielder to agency operations 12 months ago, emphasized the education gap plaguing the sector. "We drop SSP DSP clean room like these are super complex terms. I come from a marketing background. It's 30 something people in the marketing team at Goodman Fielder and I reckon a solid 70% of the team don't understand what all of that terminology means," Jackson explained during the panel.

The measurement challenge emerged as a central concern throughout the discussion. According to Wearmouth, who joined Mars United Commerce four months prior after extensive client and media owner experience, agencies often find themselves excluded from critical development conversations. "Sometimes and again sort of four months into being on this side um we are sort of maybe put uh on the outskirts a little bit and we sometimes find that you know clients are getting access to different reporting different support different education than we are as agencies," Wearmouth noted.

This exclusion creates operational friction as agencies attempt to provide strategic oversight across multiple retail media networks while lacking standardized measurement frameworks. The complexity intensifies as brands increasingly work with multiple networks, with industry data showing the percentage of brands working with four to six retail media networks doubling from 10% to 24% according to IAB Europe research.

The standardization challenge extends beyond measurement to encompass fundamental operational procedures. Unlike established digital advertising platforms that provide extensive certification programs and educational resources, retail media networks have offered limited training opportunities for agency professionals. Wearmouth highlighted this disparity: "I think the platforms and and media owners that agencies are incredibly proficient in are that way because there's certification, there's education available. There are seminars, there's case study sharing."

Despite these challenges, both panelists emphasized agencies' critical role in the evolving ecosystem. Jackson described the agency function as providing stewardship and strategic guidance as brands navigate increasingly complex commercial discussions. "I think brands appreciate having stewardship in the space and and support and so able, you know, being able to bounce ideas or strategies off, you know, businesses that do these kind of negotiations and have these kind of conversations all the time," Jackson explained.

The discussion revealed significant budget reallocation patterns driving retail media growth. Jackson noted that zero-based budgeting approaches implemented by many brands in recent years initially reduced available funds, but recovery is now generating new investment opportunities. This aligns with broader European retail media trends showing 67% of brands and agencies redirecting performance advertising budgets toward retail media investments.

Mars United Commerce brings unique credentials to retail media discussions, positioning itself as both a buyer on retail media networks and a builder of network infrastructure. Wearmouth emphasized this dual perspective: "We are the agency that built the foundation of Walmart Connect in the US and we've done that for multiple retail media networks globally." This experience provides insight into both advertiser expectations and operational pressures facing network operators.

The geographic distribution challenge adds complexity for agencies managing global campaigns. Mars United Commerce addresses this through retailer-specific team placement, with dedicated teams in Cincinnati for Kroger, Seattle for Amazon, and Bentonville for Walmart. Wearmouth indicated similar ambitions for the Australian market, though geographic concentration differs from the dispersed US retail landscape.

WPP Media leverages its scale and relationships across the media ecosystem to provide strategic guidance for both brands and retailers. Jackson described extensive collaboration addressing product roadmap development, industry demand assessment, and best practice implementation. This dual-client approach enables agencies to facilitate dialogue between network operators and advertiser stakeholders.

The measurement debate extends beyond technical specifications to fundamental questions about retail media's role within broader marketing strategies. Jackson argued for broader perspective: "I actually think agencies have a very important role to play to educate brands that retail media does an amazing job from a brand perspective and we should be looking at measurement from a sales media marketing point of view not just purely wholly and solely based around transactional information."

This perspective challenges prevailing focus on immediate conversion metrics, suggesting retail media's brand-building capabilities deserve greater recognition. The debate reflects broader industry discussions about measurement standardization and the need for unified frameworks enabling cross-platform comparison.

The panel discussion revealed significant evolution in how brands approach retail media integration. Rather than treating networks as isolated line items, agencies advocate for holistic customer journey consideration. Wearmouth emphasized strategic integration: "I think there's this enormous opportunity to bring this channel platform whatever we want to call each piece of it into the center of that client strategic planning process by starting with the question of you know what do we want the customer to do differently."

Clean room technology emerged as a critical infrastructure component enabling data accessibility without compromising privacy requirements. Jackson highlighted WPP Media's partnership with InfoSum, describing clean room solutions as essential for familiar agency workflows: "I think, you know, clean room solutions is a very, very important um, you know, it's a very important piece of the puzzle, particularly in this market as we head into, you know, some stringent privacy reform."

The discussion addressed persistent concerns about agency understanding of retail dynamics. A prominent retailer representative had suggested media agencies excel at media strategy but lack retail expertise. Both panelists acknowledged this perception while emphasizing their organizations' investments in retail knowledge development and client collaboration.

Looking forward, both panelists expressed optimism about industry evolution despite current challenges. Wearmouth anticipated significant development across in-store and off-site touchpoints, media planning integration, and creative execution. Jackson emphasized collaboration as essential for progress: "I think collaboration is critical. Um there are some incredibly smart people who work in agency."

The creative component represents an underdeveloped aspect of retail media strategies. Wearmouth identified this as a significant opportunity: "the area that we haven't talked about much at all today is I see it evolving in terms of how creatively it comes to life because I think that's the last piece of the puzzle actually that none of us at the moment are spending enough time on."

Technology standardization emerged as a priority for sustainable growth. Jackson advocated for movement away from walled garden approaches toward more collaborative frameworks: "I think, you know, just creating a level playing field is is really important, not just for big brands, but also for those, you know, mid-tier and smaller brands."

The discussion concluded with emphasis on industry collaboration as essential for addressing standardization challenges and measurement inconsistencies. Both panelists stressed the importance of three-way dialogue between agencies, brands, and retailers to optimize customer communication strategies across all available touchpoints.

These developments occur within a broader context of rapid retail media expansion, with European markets showing 22.1% growth significantly outpacing the overall advertising market's 6.1% expansion. The sector's maturation from experimental channel to strategic infrastructure requires addressing operational friction points identified in the panel discussion.

The insights reveal an industry at an inflection point where operational sophistication must advance alongside strategic ambition. While budget growth demonstrates confidence in retail media's potential, declining satisfaction ratings suggest urgent need for improved collaboration frameworks, standardized measurement approaches, and enhanced educational resources for agency professionals navigating this complex ecosystem.

Timeline

• July 29, 2025: IAB Australia Commerce & Retail Media Summit panel discussion reveals declining agency satisfaction despite 20% budget growth
• July 2025: Pentaleap and Teads announce RTB integration for sponsored product advertisements across retail networks
• July 15, 2025: IAB Europe releases retail media best practice guides addressing measurement standardization and operational frameworks
• July 15, 2025: European retail media partnerships extend showing 63% of advertisers maintain retailer relationships over one year
• May 21, 2025: European digital advertising reaches €118.9 billion with retail media as dedicated category for first time
• April 21, 2025: Retail media surge driven by sponsored products shows 22% growth in European markets
• March 26, 2025: IAB Europe releases updated retail media definitions establishing consensus across European Federation
• September 26, 2024: Equativ acquires Kamino Retail enhancing retail media capabilities globally
• September 2024: IAB releases in-store retail media measurement standards for public comment period

Summary

Who: Media agency executives Kelly Wearmouth (Mars United Commerce) and Leah Jackson (WPP Media) participated in IAB Australia panel discussion, representing agencies managing retail media campaigns for major brands while facing operational challenges with retail media networks.

What: Panel discussion revealed declining agency satisfaction with retail media networks (from 66% to 44%) despite 20% budget growth, highlighting measurement standardization challenges, education gaps, and operational friction between agencies and network operators.

When: July 29, 2025, at IAB Australia Commerce & Retail Media Summit in Sydney, representing current state of agency-network relationships as retail media transitions from experimental channel to strategic advertising infrastructure.

Where: Discussion occurred at Sydney summit addressing Australian market dynamics while referencing global retail media trends, with panelists representing agencies operating across multiple international markets including US, European, and Asia-Pacific regions.

Why: Industry faces critical inflection point where operational maturity must advance alongside strategic investment growth, requiring improved collaboration frameworks, standardized measurement approaches, and enhanced educational resources to address declining satisfaction despite significant budget increases in retail media sector.

Key Terms Explained

Retail Media Networks (RMNs): Advertising platforms operated by retailers that leverage first-party customer data and purchase behavior for targeted advertising campaigns. These networks enable brands to reach consumers with high purchase intent across on-site, off-site, and in-store environments. RMNs have become essential infrastructure for commerce-driven advertising, offering advertisers access to actual purchase data rather than inferred interest signals. The European retail media market reached €11.1 billion in 2024, demonstrating the sector's rapid growth and strategic importance for both retailers and advertisers.

Measurement Standardization: The critical challenge of establishing unified metrics and reporting frameworks across different retail media networks to enable effective campaign comparison and optimization. Currently, each network operates with distinct measurement methodologies, creating operational friction for agencies managing multi-platform campaigns. Industry organizations like IAB Europe are developing comprehensive standards to address this fragmentation, with 70% of buyers citing lack of standardized metrics as significant investment barriers.

Clean Room Technology: Privacy-compliant data collaboration solutions that enable secure sharing and analysis of customer information between retailers and advertisers without exposing individual consumer identities. These systems allow brands to leverage retailer first-party data for targeting and measurement while maintaining strict privacy controls. Clean rooms have become essential infrastructure as third-party cookies phase out and privacy regulations tighten across global markets.

Agency Satisfaction: The declining sentiment among media agencies working with retail media networks, dropping from 66% to 44% according to recent industry research. This deterioration reflects operational challenges including limited access to network development discussions, inconsistent reporting standards, and insufficient educational resources. The decline occurs despite significant budget increases, highlighting fundamental friction points requiring industry attention.

Budget Reallocation: The significant shift of advertising investment from traditional channels toward retail media platforms, with 67% of brands and agencies redirecting performance advertising budgets into retail media investments. This reallocation reflects retail media's proven effectiveness in reaching high-intent consumers and accessing valuable first-party data for targeting and measurement purposes.

Sponsored Products: Native advertising format where brands pay to promote individual products within retailer environments, automatically pulling elements from product listings including images and titles. These advertisements appear in high-traffic locations such as search results and product pages, functioning as digital equivalent of premium shelf placement in physical retail environments. Sponsored Products emerged as the primary driver of retail media's 22% growth in European markets.

Off-site Retail Media: Advertising that uses retailer data to target audiences on inventory outside the retailer's owned and operated websites and applications. This includes display, video, social, Connected TV, Digital-Out-Of-Home, digital audio and email formats accessed through third-party partnerships. Off-site capabilities expand retail media reach beyond retailer properties while maintaining access to valuable purchase intent data.

First-party Data: Customer information collected directly by retailers through their own interactions with consumers, including purchase history, browsing behavior, and demographic details. This data provides superior targeting accuracy compared to third-party alternatives and remains unaffected by privacy regulation changes. First-party data activation ranks among top growth priorities for 39% of buyers in retail media investments.

Programmatic Integration: The incorporation of automated buying and selling mechanisms into retail media networks, enabling real-time bidding and streamlined campaign management across multiple platforms. Recent developments include RTB integration for sponsored products, allowing agencies to manage retail media alongside other programmatic channels through unified workflows and measurement frameworks.

Omnichannel Strategy: Marketing approach that provides seamless customer experiences across all touchpoints, integrating retail media with broader advertising campaigns including display, video, Connected TV, and traditional media channels. This strategic framework ensures consistent messaging and optimized customer journey management, moving beyond isolated retail media tactics toward comprehensive customer engagement strategies.