Retail Media Networks: The New Trade Spend Every CPG Founder Needs to Understand

There's a meeting happening right now that almost every emerging CPG founder walks into completely unprepared.

You finally get time with your Walmart buyer. Or your Target rep. Or someone at Kroger who actually picks up your calls. Things are going fine. Then about twenty minutes in, they slide a deck across the table or screen-share something you weren't expecting.

It's not about your velocity numbers. It's not about the upcoming reset. It's about their media platform.

Walmart Connect. Target Roundel. Kroger Precision Marketing. Instacart Ads. CitrusAd for Albertsons.

Welcome to retail media networks. The fastest-growing line item in CPG marketing... and the one most founders understand the least.

Here's what I want to walk you through today, because I've watched too many good brands spend money here without a framework and come out the other side with nothing to show for it.

What's Actually Happening

The retailers figured something out. And it's genuinely smart on their end.

CPG brands have always paid to play. Slotting fees. Display allowances. TPRs (temporary price reductions). Co-op marketing. The retailer's take on your trade spend has been baked into the relationship forever.

But here's the shift. Over the past few years, the retailers built first-party data platforms. Walmart knows what 90 million households buy every week. Target knows your shopper's demographics, basket behavior, and purchase frequency better than most brand managers do. Kroger has grocery data going back decades.

So they started selling access to that data... in the form of advertising.

"Retail media" is essentially digital advertising that runs on or near the retailer's platform. Sponsored search on Walmart.com. Targeted display ads that follow shoppers based on their purchase history. In-store screens in the aisle (yes, those are now sold programmatically in some chains). CTV campaigns powered by Walmart's shopper data.

The pitch is compelling. You're reaching people who are actively shopping, in the moment of purchase intent, with data that's impossible to get anywhere else.

I get it. I would have been interested too.

But here's where founders get into trouble.

The Trap Inside the Opportunity

Retail media networks make money for the retailers regardless of whether they work for you.

I want you to sit with that for a second.

When you take a price reduction to drive velocity, you and the retailer are aligned. Both of you want product to move faster. When you pay slotting, you're buying shelf placement, and the retailer is betting you'll generate category revenue. There's still skin in the game on both sides.

Retail media is different. You run a Walmart Connect campaign, you pay Walmart... and Walmart gets paid whether or not your velocity moves. Whether or not your sell-through improves. Whether or not you make it to the next reset.

That's not me saying retail media doesn't work. Sometimes it absolutely does. But it means the burden of proof is entirely on you. They're not in this to fix your velocity problem. They're in it to generate advertising revenue.

This is where I keep seeing founders get burned. They're in distribution at one of the big boxes, velocity is soft, and the buyer suggests a Walmart Connect campaign as a solution. The founder spends $30,000 to $100,000... and nothing meaningfully changes at the shelf.

"Don't confuse distribution gains with velocity gains." I've said that for years about getting into new doors. But the same principle applies here. Retail media spend is not proof that consumers want your product.

How to Think About It

Here's the framework I'd use before spending a dollar on retail media.

First question: Is my velocity already working?

If your velocity is below 50% of category median, no retail media campaign is going to save you. I'm serious about this. If the product isn't moving without advertising, paid impressions aren't the fix. The fix is product-market fit, pricing, packaging, or positioning. Go solve that first.

If your velocity is above category median and you're looking to accelerate... now we can talk.

Second question: Can I actually measure the impact?

This is where most small brands run into a wall. Retail media platforms love to show you impressions, clicks, and "attributed sales." But "attributed sales" is a definition, not a fact. If a shopper bought your product and they saw your ad in the last 30 days, the platform often attributes that sale to the campaign... even if they were already going to buy it.

What you actually want to measure is velocity lift. Did my sales per store per week go up during the campaign period compared to a matched control group of stores without advertising? That requires scan data. SPINS. Retailer portal data. And some basic analytical muscle.

Brands below $20M in annual revenue typically can't afford the syndicated data infrastructure to do this rigorously (I covered this in my piece on SPINS and scan data). That's a red flag if you're being asked to spend six figures on retail media without a way to measure actual results.

Third question: Is this part of a coordinated strategy?

Retail media works best as amplification, not foundation. The brands getting the clearest ROI from platforms like Target Roundel are usually running it alongside strong in-store execution, healthy velocity, and coordinated promotional activity. The digital and physical are reinforcing each other.

Running a Walmart Connect search campaign for a SKU with poor shelf placement and spotty in-stock rate is like buying a highway billboard for a restaurant nobody can find. The impressions just don't convert.

The Numbers You Should Know

The CPG industry collectively spends north of $30 billion annually on retail media, and that number has roughly doubled in the last four years. Large multinational brands are allocating 20% to 25% of their digital marketing budgets to retail media networks.

For emerging brands, the minimum meaningful test is usually around $15,000 to $25,000 per retailer per quarter. Anything below that and you don't generate enough data to know if it worked. Anything above $50,000 without a measurement plan is money you're unlikely to get back.

The platforms will tell you they can drive 3x to 5x ROAS (return on ad spend). Take that with real skepticism until you've run your own test and validated it against actual velocity data.

One benchmark I use: if a retail media campaign isn't driving at least a 15% velocity lift during the flight, it's not working at scale. Some categories are different, but that's a reasonable starting expectation for an early-stage brand.

What I Saw at Suja

At Suja, we started getting pitched by retail media platforms around 2016 and 2017, as the retailers were just starting to build these capabilities. We were spending heavily on in-store demos, trade spend, and traditional co-op. Adding another marketing channel required discipline.

What I noticed was this: for our core SKUs at retailers where we had strong velocity and category relationships, retail media was a reasonable accelerator. For underperforming SKUs or new launches without velocity history, it did almost nothing meaningful.

The best use case we found was using Walmart Connect to support a specific item during its key season... cold-pressed juice sales spike in January (New Year resolutions), and a targeted campaign in late December could pull forward trials that converted to repeat purchase. That's using media to amplify an existing consumer behavior, not create one from scratch.

CPG is a "Penny Profit" business. Every dollar you spend on media that doesn't drive velocity is a dollar you needed for something else. The pennies matter.

One More Thing Before You Spend

The retailer's media team has a quota. They're not your strategic partners in this moment. They're salespeople. Treat the pitch accordingly.

Ask for case studies with brands in your category at your revenue stage. Ask for third-party attribution methodology. Ask what happens if the campaign underperforms. Ask if there's a pilot option before committing to a full spend.

And remember: the fact that a buyer mentions retail media in your business review is not a signal that you need it. Sometimes it's just part of their standard pitch rotation.

Get the velocity right first. Then use retail media to pour gas on a fire that's already burning.

Hope is not a strategy... and neither is a Walmart Connect campaign.

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Want to pressure-test your retail media strategy or trade spend allocation before your next buyer meeting? The CPG MBA program goes deep on marketing spend, velocity benchmarking, and channel economics with real numbers from brands that have been through it. And if you're navigating a growth plateau right now, the 90-Day Breakthrough is where we build your specific plan together.