'Senior marketers don't quite get it'
MediaCat UK
MediaCat UK is an online publication covering the media side of the marketing industry
Retail media is forecast to account for nearly a quarter of all US ad spend by 2028.
And yet, despite its scale, most senior marketers still don’t understand the channel — at least, that’s the view of Colin Lewis, founder of Retail MediaWorks and editor-in-chief of Internet Retailing.
‘The way I like to put it,’ he tells MediaCat, ‘[Is] it’s 2007 or 2007 and you’ve just heard of Google AdWorlds, or it’s 2013 and you’ve just heard of Facebook advertising’.
For Lewis, the difficulty brands have lies in ownership. Retail media contains elements of e-commerce, shopper, trade and brand marketing, but no single department can clearly claim it. That makes it a ‘Trojan horse’ for structural change inside brands.
‘In the US it’s very clear that a lot of the big brands are changing their structures because of retail media. What I’m seeing in the UK and Europe is a resistance to that.’
According to Lewis, two groups of brands are ahead of the curve. First are the top-tier brands like L’Oréal and Unilever, which he says are often more sophisticated than the retailers themselves and are pioneering the ‘TikTokification of retail media’ by folding influencers into their strategy.
Second are small ‘mom-and-pop’ businesses who learned their trade through Amazon, gaining a transferable skillset that larger brands often lack.
Everyone else is playing catch-up. Lewis argues that marketers concerned about transparency are holding retail media to an unfair standard as TV, radio and OOH don’t offer that either. He says most retailers simply don’t yet have the infrastructure, but that the data will come.
‘You're expecting [retailers] to have Google and Meta levels of data, insight, dashboards, self-service on day one. You never expected that of Google, Meta, and various others.’
As analytics mature, retail media’s potential becomes clear. Amazon’s ability to predict how many exposures it will take for a conversion to occur (usually eight, apparently) will become more widely available across the ecosystem. And the first-party data retailers hold could make them as powerful as research giants like Kantar.
‘I've worked with a couple of technology businesses around the globe, and I see what they can do, and it's mind-blowing,’ says Lewis.
‘It's just that not a lot of people have copped on to that.’
By Elliot Wright, reporter, MediaCat UK
MediaCat Live: speakers announced
We’re hosting our first MediaCat Live event in London on the evening of 17 September, and we’ve got a great line-up of talks, including:
Join us at MSQ Partners’ Covent Garden office for an evening (6pm-8pm) of media insights, networking, drinks and nibbles.
Space is limited and tickets are free, so register sooner rather than later to secure your spot.
The big stat
The amount of money lost each year due to inefficiencies in programmatic advertising, according to the ANA’s Q2 Programmatic Transparency Benchmark.
The study found that 36.5% of global programmatic ad spend is still wasted on low-quality impressions. While this marks only a slight improvement from Q1’s 37.8%, the ANA notes that efforts to reduce waste are beginning to have an impact — especially when it comes to Made-for-Advertising (MFA) domains.
According to the report, the median MFA spend has fallen from 15% two years ago to just 0.8% in Q2. Still, the study highlighted that marketers in the upper quartile spent up to 28.7% on MFA inventory.
Meanwhile, CTV accounted for 44.2% of programmatic spend in Q2 (up from 30.4%). This, the ANA states, presents both opportunities and challenges as the channel enables access to premium inventory but exposes gaps in measurement and efficiency.
Scratch and sniff…and scan
Earlier this month, scratch-and-sniff billboards popped up in NYC to promote Rare Beauty’s first fragrance.
Scented billboards are having a bit of a moment. Sure urged people to ‘smell this bunda’ and ‘sniff these meatballs’ on billboards earlier this year, while Lynx invited passers-by to scratch and sniff the groin of a model in its OOH ad.
But Rare Beauty’s billboards stand out; in addition to being fragranced, the ads also featured QR codes people could scan to order a sample of the perfume from Shopify’s Shop app. The brand further collaborated with Shopify to add exclusivity, using geo-gated technology to confirm that those who requested a sample were within the ad’s vicinity.
This combination of scent and tech takes Rare Beauty’s OOH ads beyond awareness and discovery, turning pedestrians into engaged, prospective customers. We already see this in the digital world, where moments of discovery, consideration and even purchasing are starting to converge.
Rare Beauty’s billboards reflect this collapse of the funnel but also tap into other trends we’re seeing in the fragrance industry this year. Last month, the marketing intelligence agency Mintel reported that discovery sets and paid-for sampling are gaining popularity as consumers want to try products before spending their money on full-size bottles. Mintel also found that Gen Z urbanites are interested in fragrance layering and personalisation.
Rare Beauty’s campaign aligns closely with both of these trends, offering mini samples through its billboards and promoting a perfume that can be customised with four layering balms to create a personalised scent.
With fewer scratch-and-sniff strips appearing in print, such billboards offer a smart way to engage audiences. That said, one can’t help but wonder how many people would actually stop to touch and sniff posters on a busy city street…
AI shopping agents prefer AI copy
A study has found that products with AI-written descriptions perform better in AI shopping simulations.
Researchers from Columbia and Yale built a mock marketplace to test how leading models — GPT-4.1, Claude 4 Sonnet and Gemini 2.5 Flash — make product selections. When human descriptions were swapped for AI-generated ones, products saw an average 2.69% market share boost.
Most of the time, the change had little effect. But in a quarter of cases the difference was dramatic. One toilet paper listing gained 15.4% with Claude Sonnet, while GPT-4.1 increased a mousepad’s share by 21.8%. The finding echoes earlier research showing LLMs prefer text produced by other LLMs, a dynamic that researchers warned could lead to ‘AI systems implicitly discriminating against humans as a class.’
The study also uncovered strong positional biases. All models prefer products at the top, but GPT-4.1 heavily favours products on the left-hand side, while Claude Sonnet opts for the middle. Simply moving an item from the bottom right to the top row boosted its selection rate five-fold in Claude’s case.
More worryingly, the models sometimes failed to pick the most obvious bargain. In one test, GPT-4.1 ignored the cheapest of eight otherwise identical products 16% of the time.
The researchers argue these quirks make a ‘compelling case’ for agent-specific storefronts and transparent developer testing. Without them, they say, regulators should step in to protect consumers.
The other big stat
The rise in sales of branded grocery items in the UK this month, according to Kantar’s latest data. Branded goods performed better than own-label products, which saw a 4.1% increase over the same period. Kantar reported that this is the ‘largest gap in favour of brands since March 2024’.
The shift could be linked to the slight decrease in grocery price inflation, which fell to 5.0% this month, down from 5.2% in July. But Kantar also notes that trips to casual and fast food restaurants fell by 6% during the three months to mid-July this year compared to 2024. In other words, consumers are dining out less but spending more in supermarkets to treat themselves at home.
‘Microdramas’ land in tinsel town
The US’s first studio devoted entirely to ‘microdramas’ launched this week, as Hollywood moves to capture the booming short-form serial market.
MicroCo will focus exclusively on bite-sized storytelling, delivered via a still-unnamed app, with the launch date yet to be announced.
The studio is backed by Hollywood insiders, jointly owned by Cineverse, a tech-driven entertainment company, and Banyan Ventures, an investment firm led by former ABC Entertainment chief Lloyd Braun.
Microdramas — roughly one-minute episodes made for vertical mobile viewing — first broke through in China during the pandemic, propelled by platforms like Douyin and Kuaishou. The genre is now a $7 billion industry in China and is projected to reach $10 billion in the rest of the world by 2027.
Previous attempts to crack the US market, most famously Quibi, failed. Short-form streaming proved hard to monetise as audiences appeared reluctant to pay for content.
But MicroCo’s backers believe they have a better chance. AI will be used to reduce production costs and a freemium model will allow viewers to watch initial episodes for free, then purchase credits or a subscription to unlock endings. Ads may also be integrated.
‘We believe MicroCo is uniquely positioned to lead this space,’ said Erick Opeka, president and chief strategy officer of Cineverse. ‘The tech, the talent, the timing — it all lines up.’
Another week, another hit from AI Overviews
AI Overviews continue to hammer publisher traffic. New data from US trade association Digital Content Next (DCN) shows that across 19 publishers, median year-on-year search referrals declined 10% — 14% for non-news publishers, 7% for news brands.
Some of the worst-hit saw click-throughs drop as much as 25%. DCN represents outlets including The New York Times, Bloomberg, Fox News Digital and NBC News.
The Professional Publishers Alliance (PPA) has also been sounding the alarm, submitting recommendations to the UK’s Competition and Markets Authority this week.
Both associations called on Google to be more transparent and offer solutions for publishers, coming just weeks after a controversial blog post from Liz Reid, head of search at Google, claimed total organic click volume was stable year-on-year.
The pressure from two respected associations will offer hope to publishers that Google may change course. But the mammoth investment it puts into AI mandates that the tech mammoth prioritises the tech above all else.
Gen X splashing the cash in 2025
‘Gen X isn’t a transitional generation — it’s your present-day profit center’, says NielsenIQ.
The research firm has just published a report stating that Generation X will be the highest-spending demographic in 2025. Gen X — comprising people born between 1965 and 1980 — is projected to spend $15.2 trillion this year. That’s $500 billion more than millennials, who take second place. Boomers, meanwhile, come in third at $13.5 trillion.
And the spending power of the ‘forgotten generation’ hasn’t peaked yet, with NielsenIQ projecting it will reach $23 trillion by 2035.
The X Factor report, analysing Gen X behaviour and spending patterns using NielsenIQ and World Data Lab (WDL) data predicts they will hold the top-spending spot until 2033, when millennials finally overtake them.
Gen Z — the fixation of so much ad attention — won’t take the crown for another 15 years, with projected 2025 spend at $10.9 trillion.
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