Retail Media Moves Beyond the Lower Funnel, Agency Execs Say

Digiday reports that agency executives speaking at DMBS argued retail media should be considered holistically rather than as a purely lower-funnel tactic. Their case rests on closed-loop measurement: the ability to connect advertising exposure to actual purchase behaviour, which retail platforms can offer because they sit close to the transaction. According to the report, that capability is seen as useful for upper-funnel marketing efforts as well, not just for converting shoppers already close to buying.

Why the lower-funnel label sticks

Retail media grew up as a performance channel. Advertisers bought sponsored placements on retailer sites and apps because the return was easy to attribute: a click near a product page, a sale recorded in the same system. That made it simple to justify budgets against direct response, and it encouraged teams to treat the channel as a conversion lever rather than a brand-building one.

The consequence is familiar to anyone managing a mixed media plan. Retail media gets judged on narrow metrics, often last-click or platform-reported sales, while brand and consideration budgets sit in separate line items with separate owners. The Digiday report suggests agency leaders want that split reconsidered, with retail media's measurement treated as an input to broader planning. What the report does not specify is how that would work in practice: which formats, which budget splits, or which measurement standards would support a more holistic view.

What closed-loop data actually offers

The appeal of closed-loop measurement is that it shortens the distance between seeing an ad and buying. For teams, that has two practical implications. First, it can validate creative and audience choices with sales evidence rather than proxy metrics. Second, it can inform upper-funnel decisions, such as which messages or audiences precede purchase, even when the conversion happens later.

The caveat is that retailer-reported data comes with its own definitions and limitations, and the announcement gives no detail on how agencies propose to reconcile it with other measurement sources. Teams should treat platform-reported lift as one signal among several, not as a unified truth.

What a team can check this week

• Whether retail media sits in its own budget silo, separate from brand and consideration spend, and who owns the decision.
• Which metrics are currently used to judge retail media, and whether any of them capture upper-funnel effects.
• How retailer-provided sales data is reconciled with other attribution sources before it reaches planning discussions.

Retail media's share of digital ad budgets has grown steadily in recent years as retailers built out their ad platforms, which is part of why the framing debate matters commercially. The Digiday report captures a shift in how agency leaders want the channel discussed; it does not provide evidence of how quickly advertisers are changing their structures. For now, the practical question for marketing leads is narrower: whether their current measurement setup lets retail media inform anything beyond the last click.