Today, I'm sharing "The Back-Channel" - a grab-bag of snippets from conversations with industry insiders that I've had in the past week or so. The point is to identify updates on the big themes that are happening in the industry, just as if we were having a hallway conversation.
Today I'm sharing:
- The talent gap in "selling" retail media.
- How can we get Jason Goldberg excited about retail media?
- Are brands going big this Prime Day, or pulling back?
You can also listen to today's edition as a podcast here:
1 - The talent gap in "selling" retail media.
A tech vendor shared an interesting POV with me this week: that some retailer's RMN teams lack the background to sell effectively to agencies — a major reason why smaller RMNs might stagnate. This exec shared that retail media sales teams aren't equipped to "sell an audience" and speak agency language, which creates friction. They emphasized that retailers need agency-savvy talent to take RMNs to the next level—especially when shifting from trade marketing to audience-based selling. They noted that current staff often lack the skillset and salary bands to make that leap.
Its ironic because a lot of the tech vendors I speak with – including this one – have brought in key execs from RMNs to lead their retail division or to help their go-to-market strategy. With all the turmoil in the ad agency space, perhaps this is a good time for retailers to scoop up talent that's disenfranchised with agency life? Just a thought.
2 - Is retail media actually not that exciting?
I hope you'll share a proud moment with me. Retail Media Breakfast Club got name-checked on the Jason + Scot show this week, which is the seminal podcast in the retail space and one I have been religiously listening to for 7+ years!
Now Jason had an interesting POV that I want to dig into in a lot more depth. And making Jason excited about retail media has just become my new career goal.
For now, here's what Jason said, and the best data points I found in quick research session this afternoon.
The context is this: Amazon's ad business grew at 19% in Q1 2025, and it's a profitable business. Jason says: "Every other retailer in the world looks at that and goes, oh, I want a piece of that. And now every ad agency in my holding company and all of our competitors like all have stood up armies of retail media people. And I actually like don't think the retail media opportunity is near as exciting outside of the Amazon ecosystem as, as some people will have you believe."
Jason's Law 1: Most retail media ad spend sits with Amazon.
Data so far: True. Amazon captures 76% of US retail media spend, followed by 8% for Walmart, and 16% for all other RMNs.
Jason's Law 2: Retail media is mostly Sponsored Product Ads
"The vast, vast majority of [the retail media ad business] is sponsored product listings."
Data so far: True, but its tipping.
Search performance ads still hold a majority share, but Amazon’s mix is tilting quickly toward upper-funnel/CTV via DSP.
Ad agency Tinuiti said in 2024 that 32% of its ad spend on Amazon was on the DSP (versus search ads). Tinuiti's client size skews toward enterprise, it would be interesting to see spend splits from other sources.
Outside of Amazon, 10% of retail media ad spend is offsite, according to separate estimates from Barclays and EMARKETER. But both expect that split to rise to 30% in coming years.
Jason's Law 3: Most Sponsored Product Ad Spend is from Smaller Spenders
"The vast, vast majority of the sponsored product listings are from third party sellers" (with the implication that they are the ones funding the most sponsored ad search volume)
Data so far: Probably.
Some data from SmartScout show that 3P brands spend 127 % more on Sponsored Products and 146 % more on Sponsored Video relative to revenue than 1P vendors. This math answers a slightly different question, though – it tells us how aggressively each seller type buys ads per dollar of their own sales.
Separate analysis from Andrew Lipsman in his Media Ads + Commerce publication also unpacked a strong relationship between a marketplace model, a large, healthy mix of advertisers, and high monetization of ad inventory.
Jason's Law 4: Therefore, incremental ad dollars for specialty or regional retailers is limited
"I'm very skeptical that there's a lot of incremental ad dollars for a regional grocer with no third party marketplace or a specialty retailer in home furnishings with no traditional shopper marketing spend and no CPG or everyday essentials. Like I just, I think once you start getting out of these like two or three biggest retailers in the ecosystems, the retail media opportunity gets a lot less exciting for me."
Data so far: working on it! (can you help?) I think he's correct on the first part – there are retailers who's footprint and reach simply don't make sense for brands to go out of their way to activate against.... Particularly if they don't integrate with a DSP.
But retail media is clearly an attractive enough value proposition for many of the larger retailers outside of Amazon and Walmart to invest significantly in. And they're investing because brands want what retail media promises: direct access to consumers at various points of the shopping journey, closed-loop attribution (sometimes), and a hedge against alternative advertising channels like search, social and linear tv.
Let's see if the wise readers of this newsletter have further data or ideas they could share for a healthier rebuttal.
3 - Are brands going big this Prime Day, or pulling back?
Prime Day 2025 is stretching out to four days, tariffs are impacting margins, and consumers have pulled forward many purchases already. So are brands going to spend more or less on Prime day this year? Cast your vote and see how other brands are approaching the summer sale here.
What else I'm working on
Understanding the retail media halo effect isn't optional—it's existential. This convergence of retail data and digital attention embodies precisely what Future Commerce is dissecting in their upcoming Retail Media Halo Effect webinar on May 21st. As the boundaries between entertainment and commerce dissolve into a unified commercial consciousness, brands must master this new omnichannel reality or perish in digital obscurity.
Join me, The Wonderful Company (POM, Fiji, Wonderful Pistachios, Teleflora) and Keen Decision Systems as we discuss how to transform every pixel, from TikTok to aisle endcaps, into measurable revenue. Register now.
