## Market Impact for Media, Internet, Retail and Consumer Sectors
As the retail media market continues its expansion, the analysis examines the potential impact across multiple sectors and identifies key stock winners and losers. The sectors most affected include Media, Internet, Retail and Consumer across various geographies.
## European Media: Opportunities for Agencies, Publicis and Omnicom
### Primary Beneficiaries
Retailers and e-commerce platforms stand to achieve significant incremental revenue at very high margins. However, advertising agencies should also benefit considerably. Retail media opens new high-growth, higher margin verticals, particularly advantageous for servicing retailers with technology and data capabilities.
### Agency Growth Potential
Retail media’s complexity creates confidence that agencies face less risk of disintermediation compared to other verticals. The data improvements in targeting, measurement and ROI on ad spend make retail media attractive to agencies.
Finally, agencies’ role is arguably more important in offsite advertising as programmatic ad buying crosses a wide inventory range. This directionally positive outlook for agencies is supported by scenario analysis suggesting that **retail media can add 1.5pp to agencies’ average Media growth** and elevate average agencies’ **group organic growth to 3.9% from 3.5% in 2025E and to 3.4% from 3.0% in 2026E**.
In the blue sky scenario (accelerating growth with no in-housing or cannibalization), retail media could add 4pp to Media growth and lift group organic growth to 4.8% from 3.5% in FY25E and to 4.3% from 3.0% in FY26E.
## Figure 10: Retail Media Potential Uplift for Agencies
The chart shows two scenarios:
**FY25E:**
– Potential uplift to Media: 1.5%
– Potential uplift to Group Organic: 0.5%
**FY26E:**
– Potential uplift to Media: 1.3%
– Potential uplift to Group Organic: 0.4%
*Source: Barclays Research*
### Agency-Specific Positioning
The agencies have slightly different exposure to retail media:
– **Publicis**: Services both brands and retailers, runs their own retail media Network with Carrefour
– **Omnicom**: Has higher exposure to buying on marketplaces and e-commerce consulting through acquisition of Flywheel
### Strategic Developments
Whether one approach is better positioned for retail media buying and planning depends largely on the data asset. Both Publicis and Omnicom are ahead of WPP and IPG in retail media planning due to their strategic focus:
– **Publicis**: Made the most vocal moves about growth opportunities and made early strategic acquisitions (CitrusAd in 2021 and Profitero in 2022) on top of earlier acquisitions of data asset Epsilon
– They also launched Unlimitail, a retail media network with Carrefour that stands to benefit from fragmentation in the European retailer market
– **Omnicom**: Boosted their retail and commerce ambitions with the purchase of Flywheel, positioning them to service both retailers/e-commerce and the brand side of retail media
## Investment Implications
The analysis indicates retail media offers significant incremental, margin-accretive revenue potential for agencies in a low-margin European retail sector. Despite several years of strong growth, investors have not yet fully recognized the “incrementality” of the revenue stream or anticipated clearer disclosure from companies.
The sentiment has shifted significantly in the past year, reflecting:
– Improved headline growth forecasts
– Proof points in the US market
– Prospective ending of “cookies” driving increased disclosure from key companies
