Why Retail Media Networks Are Fragmenting Digital Advertising Beyond Repair – News Round Up: 10/10-10/17

by Jeff Licciardi

Retail Media Networks Aren’t Fragmenting Digital Advertising—They’re Exposing How Broken It Already Was – News Round Up: 10/10-10/17

The industry narrative has settled: retail media networks are fragmenting the digital advertising ecosystem beyond repair. Ad Age warns they’re reshaping entire marketer organizations. Digiday proclaims “there’s a point of diminishing returns” and warns of an imminent reckoning. Every brand is supposedly drowning in incompatible dashboards, measurement systems, and platform requirements.

Here’s the uncomfortable truth no one wants to say out loud: retail media networks didn’t break digital advertising. They simply removed the facade that Google and Meta provided for years—the illusion that digital advertising was ever truly unified, measurable, or efficient. What we’re calling “fragmentation” is actually forced transparency. And brands hate it because it reveals how much waste they’ve been tolerating all along.

The “Easy Dollars Are Gone” Because They Were Never Real

When Digiday reports that “the easy dollars are gone” in retail media, they’re documenting something more fundamental than platform maturity. They’re watching advertisers realize that retail media’s current inefficiencies—the manual insertion orders, the clunky reporting, the lack of standardization—aren’t bugs unique to retail media. They’re the actual cost of doing direct-to-publisher advertising without a walled garden middleman taking 30-50% and hiding the mess behind a unified dashboard.

The “easy dollars” of the Google/Meta duopoly era weren’t easy because those platforms were more efficient. They were easy because brands could avoid accountability. When your attribution model is a black box and your brand safety is “trust us,” of course the buying process feels streamlined. Retail media networks are forcing brands to actually look at their media supply chain—and they’re horrified by what they see.

The real story in advertisers going all-in on full-funnel retail media isn’t about fragmentation. It’s about brands finally having access to closed-loop measurement that connects ad exposure to actual purchases. Yes, Kroger’s platform doesn’t talk to Target’s platform. But at least you know whether someone who saw your Kroger ad bought your product at Kroger. That’s infinitely more than you ever knew about your Facebook campaign.

AI Is Promising to Fix Problems It’s Actually Making Worse

Meanwhile, the AI conversation in advertising has reached peak absurdity. Ad Age explores where marketers are really seeing ROI from AI, and the answer is revealing: mostly in making more ads, faster. Not better ads. Not more strategic ads. Just more of them.

This directly feeds the retail media “fragmentation” problem. As Digiday notes, marketers are warming to AI despite creative challenges and legal risks still looming. The pitch is seductive: use AI to automatically generate customized creative for each retail media platform, solving the “fragmentation” problem with scale.

But this is solving for the wrong variable. The problem isn’t that brands need 50 different versions of the same ad for 50 different retail media networks. The problem is that brands never should have been running the same generic ad across 50 different contexts in the first place. AI is being deployed to industrialize mediocrity rather than force the strategic thinking that genuine channel differences demand.

Even more telling: OpenAI’s advertising change of heart—from hatred to hiring—reveals that even the AI companies themselves recognize advertising is where the money is. Not because AI makes advertising better, but because advertising budgets are enormous and largely unaccountable. It’s the perfect industry to sell expensive “solutions” to.

Smaller Retail Networks Are Winning By Not Pretending to Be Walled Gardens

The most interesting development is buried in how smaller retail media networks are stepping out from Amazon and Walmart’s shadow. They’re not trying to build unified platforms that do everything. They’re not promising AI-powered creative optimization across all touchpoints. They’re offering something radically simple: direct access to their first-party purchase data and shelf space, with straightforward attribution.

This is the actual solution to “fragmentation”—not technological unification, but strategic clarity. A brand doesn’t need their DoorDash campaign to integrate seamlessly with their Instacart campaign. They need to understand which platform drives incremental sales for which products in which markets, then allocate budget accordingly. That requires analytics and strategic thinking, not another unified dashboard that obscures the underlying economics.

The brands complaining loudest about retail media fragmentation are the same ones who never questioned why they were spending millions on Facebook ads with no visibility into whether those impressions occurred before or after purchase decisions. They outsourced their thinking to algorithms, and now they’re upset that retail media networks expect them to think strategically again.

What Comes Next: More Fragmentation, Less Pretending

The industry will continue consolidating around a narrative that retail media fragmentation is a crisis requiring urgent solutions. Expect a flood of “unified retail media platforms” promising to solve the problem. They’ll fail, because they’re solving for the wrong thing.

The brands that win in this environment won’t be the ones demanding that retail media networks become more like the walled gardens they replaced. They’ll be the brands that embrace the transparency these platforms provide—even when that transparency is inconvenient—and build actual strategic frameworks for channel-specific deployment.

Retail media networks aren’t fragmenting digital advertising. They’re showing us what digital advertising actually looks like when you remove the monopolistic intermediaries that spent 15 years convincing us their inefficiencies were features. The fragmentation isn’t the bug. The previous “unification” was.

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