Bayer’s Retail Media Strategy: Growth and Challenges

Retail Media’s Growth and Challenges for Bayer

Retail media has rapidly become a major part of Bayer’s marketing budget. Ryan Verklin, who leads paid and retail media at Bayer, highlights the need for better measurement and simpler operations to support this growth. As retail media budgets soar, the industry faces some hurdles that could limit its future.

Understanding Retail Media’s Rise

In recent years, retail media has shifted from a small item in advertising budgets to a significant player. Industry forecasts suggest that retail media spending in the US could surpass $76 billion this year. This amount is now nearly 25% of many brands’ total media budgets.

Bayer is no different. Verklin notes, “It’s around that number,” referring to the company’s investment in retail and commerce media. However, he warns that this growth might not continue smoothly unless certain issues are addressed.

The Need for Better Measurement in Retail Media

One of the biggest challenges in retail media is the lack of standardized measurement. “Right now, all the commerce media networks have their own measurement silo,” Verklin explains. This makes it hard for brands to measure performance across different networks or compare it to national campaigns.

• Brands need a holistic view of measurement.
• Inconsistent metrics create confusion.
• Comparing retail media performance to national campaigns is often difficult.

Complexity and Resource Challenges

Another hurdle is the complexity of constantly emerging commerce media networks. Bayer manages its retail media in-house, but resources are limited. Verklin states, “We’re lean and mean. It’s really a manpower issue to just work with so many networks.”

The focus for Bayer is clear: “Fish where the fish are.” This means investing in platforms where current and potential customers can be found.

Defining Effective Commerce Media

For Verklin, commerce media is straightforward. It involves networks that can reach an audience and measure transactions effectively. This connection is essential as many networks now offer various advertising formats, including off-site inventory and programmatic options.

“Let’s make sure display is working before we start jumping in headfirst to CTV,” he advises. This highlights the importance of testing before diving into new strategies.

Opportunities in In-Store Advertising

While digital advertising is crucial, Verklin sees potential in physical store spaces too. Many retailers are placing digital screens in stores, especially near pharmacies where shoppers have high purchase intent.

“As each store was coming online with a new screen at the pharmacy… we were serving ads,” he says. Initial results have shown strong interest, particularly for products like MiraFast, aimed at pharmacy customers.

Connecting Real-World Moments with Commerce Media

These in-store advertisements capture vital buying moments. Verklin points out, “If the consumer is already there for a reason, adjacent products become highly relevant.” This signifies that commerce media is evolving to be more omnichannel, blending both online and offline strategies.

Addressing Identity and Audience Overlap

Another aspect to consider is identity and how to avoid overlapping audiences. Verklin suggests that many discussions focus on increasing sales but overlook the importance of reaching new customers.

• Bayer wants to avoid wasting retail media dollars on audiences already targeted by national campaigns.
• Networks that support audience deduplication gain Bayer’s attention for investment.

The Future of Commerce Media and AI

A significant trend on the horizon is agentic commerce, where AI systems could make purchasing decisions for consumers. For Bayer, maintaining brand trust will be essential, especially as consumers start using agents for buying decisions.

Verklin hopes that trusted names like Claritin and Aleve will be recognized in these AI recommendations. However, he acknowledges that the industry is still figuring out how brands will appear in new environments shaped by AI.

Conclusion: The Path Forward for Retail Media

Retail media is changing the way companies invest in marketing. However, Verklin emphasizes the need for foundational changes to ensure sustainable growth. The industry needs consistent standards, simplified buying processes, and better measurement strategies.

Bayer is moving forward carefully, always keeping an eye on future developments. As the landscape of commerce media continues to evolve, staying adaptable will be key to success.