What the last ten years in ad tech can tell us about the next ten in retail media

I’ve spent 12 of the past 15 years working in ad tech, mostly at IPONWEB, the engineering powerhouse behind much of the foundational tech and infrastructure that power today’s programmatic-first digital advertising ecosystem. There, I got to watch programmatic go from being a niche efficiency play to becoming the dominant method for buying and selling premium digital media across all formats and channels.

For the past three years at Criteo, I’ve had front row seats to another rapidly rising and changing digital ad ecosystem: retail media, perhaps the final ‘premium’ media frontier that has yet to tip to real-time bidding (RTB). But that’s changing, too, as ad tech platforms are eager to access new (and sizable) budgets and advertisers look to consolidate media buying and spend into a narrower set of preferred platforms.

When I look at the retail media landscape today, it reminds me a lot of what I saw as programmatic crept its way toward more complex media channels and premium media owners. The lessons that we learned then—about power, partnerships, and process—can help retailers prepare now for the programmatic future.

Before we dive into what those lessons are, let’s align on definitions.

What programmatic in retail media actually means

When I talk about programmatic for retail media here, I mean buying and selling digital ads on retailer properties through programmatic platforms, like a DSP and SSP, using the open RTB protocol.

Specifically, that means:

• Retailers are able to make their inventory available in real-time to advertisers using RTB-enabled buying platforms, namely DSPs.
• Advertisers, using a DSP, can decide in real-time on whether or not they want to bid on a retailer’s ad inventory (and how much they want to bid) based on what they know about the ad placement (format, ad size, contextual category) and the user (user ID, geo, device type) at the instant the ad impression becomes available.

Not included in the above definitions are the following:

• Buying conducted through supply aggregators, like Skai and Pacvue, which instead connect their front-end UIs to retail media networks’ back-end media activation toolsets through an API integration. These are valuable tools for both advertisers (looking for efficiency) and retailers (looking for additional demand), but they are technically not RTB.
• Using retailer data for audience extension use cases, otherwise known as retail media offsite. These campaigns are typically executed by targeting a retailer’s audience data through a retailer’s own DSP seat or by curating a retailer’s audiences with open web supply inside an SSP. Both use cases are technically RTB, but they’re fairly routine audience plays that don’t represent a major disruption in how retail media is bought and sold.

The other thing to mention is the topic of who will ultimately own retail media budgets. Today, those investments tend to be managed by retailer-specific sales teams inside the brand, or they can be handed over to a commerce team inside the brand’s agency-of-record to distribute.

The largest retail media buyers will likely continue operating in somewhat of a media silo, but many brands, especially those newer to retail media or that have a large share of product sales happening via their own D2C channels, may turn to more full-funnel, cross-channel approaches.

If brands consolidate these budgets under their media teams (either in-house or at their agency), who tend to be more media savvy, expect programmatic demand to ramp up quickly. If the status quo remains or retailers manage to limit access to preferred platforms or channels, the shift will be slower—but it’s coming.

With that behind us, let’s look at what retailers need to know about the road to RTB, based on what programmatic has taught us so far.

Lesson 1: Programmatic adoption is inevitable, but it won’t be absolute

Programmatic first got its start in the murky corners of unsold, mostly network, display inventory. From there, it expanded to more formats, channels, and premium territory. Today, everything from video inventory on CNN.com to CTV supply on Netflix to digital screens in Times Square can be bought programmatically.

Why, you ask? Because advertisers, who loved the efficiencies programmatic unlocked for them, demanded it. Media buyers no longer had to negotiate with dozens of partners manually or reconcile performance reports across mismatched spreadsheets. Programmatic let them activate, optimize, and measure campaigns across many media owners from one platform.

When I first started in retail media, the general refrain was that there are too many complexities and challenges to bring RTB to the space. The same was once said about CTV and DOOH, but guess what? They’re both trending toward becoming predominantly programmatically purchased channels after only five or so years of being programmatically available. Again, because advertisers demanded it and platforms accommodated it.

There’s no doubt: retail media has complexities that will require a slow and deliberate transition to RTB. But to think that buyers or platforms won’t invest the energy or effort to push in that direction, when the size of the prize is already many times the size of DOOH, doesn’t seem plausible.

If I had to guess, I’d say the transition will look a lot like when premium publishers began to dip their toes into programmatic waters. Retailers will start by experimenting with the lower value formats and placements, like onsite display and below-the-fold ads, and safer-to-execute buying modalities, like private marketplace deals, before expanding to more complex propositions, like sponsored product ads, video, and open exchange trading.

A very small handful of super scaled retailers may be able to buck the trend, limiting buyer access to their inventory through the retailer’s owned or preferred platforms and pathways. For some retailers, the risk or hassle of RTB won’t be worth the reward, and they’ll opt to forego new revenue to maintain the status quo buying relationship with their existing brand and JBP partners (a strategy which could backfire if those brands ever insist on shifting to programmatic channels). The lessons that follow are intended for all the other retailers who are looking at RTB as a way to unlock new budgets and accommodate how the biggest budget holders want to buy, without ceding control or sacrificing user experience.

Lesson 2: The power balance will shift

Throughout programmatic’s rise, the demand side has called the shots. Brands, agencies, and DSPs set their terms, and it’s up to suppliers to accept them, or walk away from that spend.

A few examples:

• GroupM (now WPP Media) set strict ad viewability standards and cut off suppliers who didn’t meet them.
• The Trade Desk preferences supply partners that pass certain technical identifiers (such as GPID and Transaction ID) in the bidstream.
• In programmatic, many platforms talk to each other to fill a single ad, creating opportunities for discrepancies in ad serving and reporting. Most DSPs only pay out on their numbers, which means publishers may be unpaid for filled inventory if they work with SSPs who don’t have robust monitoring. Also, the biggest advertisers use ad verification services – any media those services deem to be either fraudulent or unsafe, they won’t pay for, even if the ad already ran.

When programmatic comes to retail media, some of the biggest retailers might have some luck imposing their will, but most others will find that maintaining access to programmatic spend means acquiescing to certain agency and DSP asks.

What does this mean for retailers? Pick your partners wisely. You’ll want to work with platforms who:

1. Understand how the ecosystem works and know what to look out for when it comes to buy-side media quality expectations, trading idiosyncrasies, discrepancy thresholds, and payment flows;
2. Adhere to and adopt the latest trading protocol standards and can explain the risks and rationale behind each update;
3. Have very solid – and direct – relationships with the biggest DSPs and agency holding companies, as well as the verification service providers.

If media buyers will have more say, then making sure your voice gets heard and your questions get answered is critical. Pick partners best positioned to make that happen.

Lesson 3:  Add demand partners with intention

In the early days of programmatic, publishers looked at SSPs as a source of incremental demand, helping them to bring extra liquidity to unsold inventory. Publishers quickly learned, though, that more partners mean more demand only up to a point. Then the law of diminishing returns kicks in. The extra juice pubs would see from adding more demand partners wasn’t worth the squeeze of managing the extra technical integrations, negotiating more contracts, and mitigating the added risk around data leakage, fraud, malware, bad ads, and faulty payors that comes when more parties enter the tech stack.

The lesson for retailers: Every SSP, and some DSPs, will want direct access to your inventory, but not every SSP and DSP will bring you value, and many may bring you risk. Work with platforms that have strong demand connections (particularly with those brands who would want to advertise on your properties) and a reputation for delivering high-quality ads.

If growing spend is a top priority for your retail media business, though, you will want to experiment with adding different partners to your stack to find your ideal mix. Invest in a skilled Yield Management expert who has done this work before, preferably for a premium publisher, who has strong relations with account teams at top tier DSPs and SSPs.

Lesson 4:  Fraud prevention isn’t optional

Programmatic’s early days were troubled by fraud and bad actors. Advertisers were paying for ads on fake sites posing as premium publishers and for bot traffic posing as real humans. In other cases, they paid premium CPMs for display ads disguised as video, or for traffic from unknown users that was swapped with the IDs of valuable targets. Instead of funding legitimate publishers creating content and attracting audiences, that money went to fraudsters.

So, the industry got better at policing itself and adding safeguards. Ad verification and fraud detection are now standard for major advertisers and agencies, transparency measures such as ads.txt, ads.cert, and sellers.json are widely enforced through the IAB’s open RTB protocol, and deal-based trading options like Private Marketplace, Preferred, and Programmatic Guaranteed let publishers and retailers transact inventory securely. But the lesson remains: advertisers won’t pay for shady inventory.

What does this mean for retailers?

1. Fraud mitigation needs to be top of mind. Programmatic buyers will use their own anti-fraud, viewability, and brand safety verification services. These services are poorly adopted across retail media today, but likely won’t be negotiable in an RTB world. Buyers won’t pay for impressions deemed fraudulent, non-human, non-viewable, or brand unsafe. You’ll want to keep an eye on these numbers, too, and may also need to rethink site layout and ad placements to maximize for things like ad viewability.
2. You should only work with reputable partners who understand and comply with the IAB’s latest transparency protocols, particularly sellers.json and ads.txt, and can guide you through the setup. You should similarly limit the number of partners you work with to a trusted handful who have DIRECT permissions to represent your inventory to programmatic buyers.
3. When working directly with agency or brand buyers, transact as much of your premium supply and audience data as possible through deal constructs. This allows you to control who is able to bid on your supply, how much it costs, and prevents unwanted buyers from stealing your bidstream data for nefarious purposes.

Lesson 5: Align on common standards

What buyers like so much about programmatic is that it gives them the ability to manage media buys (outside of the walled gardens, that is) in a holistic, unified way. They can launch campaigns with one creative across many partners, use consistent bid and targeting rules, view all reports in one format and UI, and compare results easily. This not only creates huge workflow efficiency gains for media buyers, but it creates consistency and standardization across suppliers that drives better campaign outcomes.

The most common complaint buyers have today with retail media is its lack of standards. Every retail media network wants to have unique creative formats, special targeting rules, proprietary measurement approaches, and so on. This makes it impossible for buyers to effectively and efficiently manage campaigns across retail media partners uniformly. Maybe they’ll make a sacrifice for their biggest or best performing retailer partners, but they won’t do it for all.

For programmatic buying of retail media to scale, which the buy-side desperately wants (refer back to #2), retailers will need to:

1. Align on common ad formats: Onsite display, video, and sponsored product ads. To transact these formats programmatically will require a common spec that gets built into the RTB protocol. That spec tells the buyer when an impression opportunity becomes available, what creative format the placement will accept, including dimensions, volume specifications (if video), character count, image sizing, and much more. Retailers will need to align on common standards that can be shared across many, just as publishers aligned on standard IAB banner sizes and native platforms aligned on native-specific specs that could work across buying platforms.
2. Align on common measurement approaches and terms: In programmatic, measurement occurs in the buy-side platform, or DSP. That’s because the creative is served using the advertiser’s own ad tag (which gets populated through the bid response to the publisher’s ad server), and any conversion activity typically takes place on the advertiser’s site or app, where they have full tracking visibility. This is fundamentally different from how it works in retail media today, where the retailer renders and serves the ad, captures all performance and sales conversion data, and defines the possible attribution parameters. For retail media to scale in RTB, these details will need to be sorted out by retailers, advertisers, platforms, and the open RTB protocol’s governing body, the IAB Tech Lab. That includes: who gets to serve the ad (if brand, how does the retailer get to ensure relevancy and quality rules are adhered to); how does ad and sales data get passed between the retailer and the advertiser; where do attribution rules get set, and how do they get communicated between retailer and brand.
3. Align on common targeting and placement rules: Homepage, category page, product page. Like ad formats, these will need to be taxonomized and standardized across retailers and fed to DSPs through the bidstream. The more info they convey about the specificity of the supply, the higher buyers will value it.
4. Align on common currencies: RTB operates on a CPM model, while some retail media placements, like sponsored products, operate on a CPC model. Figuring out how to translate a programmatic buyer’s CPM bid so that it can compete against a direct buyer’s CPC bid in the retailer’s ad server, while also ensuring the best possible revenue for the retailer, will be needed.
5. Align on product catalog normalization: Product SKUs are used at every step of the process, from building creative, to determining ad eligibility for a certain keyword, to attribution. The ecosystem will need to work out how to normalize and match product data across retailers and DSPs.

In the short history of programmatic, lack of shared standards on the supply side is the number one cause for things not scaling.  Retailers have an opportunity to actively shape these standards from the outset, ensuring they will benefit both their businesses and their customers.

Lesson 6: Protect the shopper experience

For retailers, ad revenue comes second to selling products and maintaining a great shopper experience. Again, for programmatic to scale, retailers will need to address:

1. Ad relevancy and comingling of ads and organic product content. Retail media ads, especially Sponsored Products, are rendered within organic product content (think search grids or product recommendation carousels). Retailers will need to work out how to maintain things like their semantic relevancy restrictions, personalization logic, and localized stock availability rules when ads come from third-party DSPs. Ideally, this needs to happen in an automated way – without heavy manual processes and human intervention – so demand and revenue can easily scale.
2. Latency and impact on customer experience. RTB transactions on the open web happen fast (typically ~100ms), but fast ad loads for traditional web publishers are too slow for retailer sites. Retailers will need to address how to run an ad auction involving multiple third parties and then merge the ads with organic content and retailer business rules fast enough to meet user experience expectations.

Retailers need technology partners who not only understand the unique complexities of retail but also have the agility to adapt as standards and expectations shift to help them address these challenges.

Lesson 7: Don’t do it alone

Despite all the articles and conference panels on the topic, I can’t think of one enterprise publisher or advertiser (who’s not also a tech company, like Amazon) that today is running programmatic off their own tech, or even white-labeled tech that they license but run under their own brand in the programmatic ecosystem. Why? Anyone who tried it quickly realized two things:

1. Ad tech is complicated and building it requires a serious investment in engineers, data scientists, and cloud infrastructure.
2. Gaining entry into the programmatic ecosystem is incredibly difficult. Most platforms have all the connections they want. To secure a connection to the top DSPs that represent the biggest spend is a multi-quarter, business development-intensive exercise, and it’s still not guaranteed. Even a tech giant like Netflix uses SSPs to tap programmatic demand, and Walmart chose The Trade Desk to run its offsite business.

Lesson 8: Protect everything that makes you you

Perhaps the biggest lesson learned by publishers during the transition to programmatic is this: Maintaining control over your inventory and data is essential. When these assets are thoughtfully managed and shared, you can continue to steer your programmatic destiny.

What this looks like in practice:

• Protect your data at all costs: Retailers already know and abide by this rule, but as retail media buying shifts more to programmatic, buyers will want more access to your data for audience insights and media planning. Only make data available through setups that don’t allow your audiences to be reverse engineered. That means data clean rooms, curation, and private marketplace deals. Limit open exchange trading to non-audience, non-query-based buying.

• Don’t give up your relationships with DSPs and agencies (and if you don’t have them, make them): It’s easy to let platforms disintermediate you from the buy-side. Don’t let it happen. Having strong DSP partners can speed up troubleshooting issues and open new paths to demand. Agencies will be your fastest path to revenue. Get to know the teams beyond trade, such as programmatic, brand, and performance. They’ll have new budgets you can tap and new customers to call on.

• Keep doing what nobody can do better than you. In most cases, this is going to be something specific to your audiences and what you know about them: what they buy, how they buy, how much they buy, and so on. You’re the only one who can provide these insights, which the holdcos are eager to get their hands on to aid media planning, creative strategy, and new partner pitches. As long as you have something they need AND can’t get anywhere else, they’ll keep coming back.

The past is prologue

Programmatic advertising went from being niche to 96% of every new display ad dollar in under 15 years. And it’s not just display: eMarketer reported nearly $29 billion in global CTV ad spend last year, with 90% being transacted programmatically.

Programmatic scaled so quickly because it made advertisers’ lives easier and drove better marketing outcomes. But any claims that programmatic is “easy to build and maintain” is simply untrue.

Retail media could follow a similar trajectory—but with the benefit of hindsight and the opportunity to build smarter from the start. I know first-hand RTB is difficult to learn and master, because I lived it. I also know navigating the nuances of retail media requires understanding the specifics of retailer business models, customer focus, and seller relationships. At the intersection of the two is where Criteo steps in: combining our legacy of programmatic technical excellence and deep retail media knowledge to innovate purpose-built RTB capabilities that will unlock a new era of growth for retailers. 

Retailers don’t need to repeat the missteps of programmatic’s early days. Instead, they can define the rules, set the standards, and choose the partners that will help them grow sustainably and strategically. With the right approach, the next ten years can be a decade of sustainable growth, innovation, and real media transformation.