CMO Strategies: A playbook for marketing channels

Each of the four channels Modern Retail+ Research examined in our CMO Strategies series draws on a different set of marketing tactics and is influenced by distinct consumer and advertiser trends. Among the four channels, social media had the highest overall channel usage for paid ads, at a 97% usage rate among survey respondents. Display ads came in second place, with 75% of respondents saying that they use the channel for paid ads, an increase of 14 percentage points over last year. However, while the top two channels have taken up a large amount of marketers’ attention this year, retail media also saw an increase in adoption, from 40% in 2023 to 53% in 2024. 

While each channel plays a different role in advertisers’ marketing mixes, they do share some commonalities when it comes to barriers to increased adoption. Across all channels, marketer respondents noted that cost of media is a major challenge. This mirrors findings from last year’s CMO Strategies series, in which respondents also said that cost was the No. 1 barrier for all channels. This trend will likely carry on in the future, as it seems that the cost of acquisition on all channels will continue to increase. Ultimately, marketers will have to find ways to tackle the problem, such as diversifying their platform choices across channels. For in-depth analysis on marketing options within each channel, read the full reports for more details. 

New threats and opportunities emerge within channels this year

A notable trend that came out of this year’s CMO Strategies series were major shifts within channels that rely on established platforms to compete with other channels. We’ll look at this in two categories: one group, including ad-supported streaming and retail media, was affected by new platform entrants; and the other group, including display advertising and social media, felt the impact of potential policy changes. 

In the first group, ad-supported streaming and retail media channels were both shaken up by new platform players. Within ad-supported streaming, Netflix and Amazon Prime added new subscription tiers that include ads, replacing the original lowest-tier options which had no ads. Retail media similarly saw new platform entrants, such as Saks Fifth Avenue’s Saks Media Network, that are hoping to capitalize on the channel’s growth.

These newer entrants give advertisers more options and opportunities to diversify their marketing mixes, but marketers could end up stretching their budgets thin if spending is spread too widely across platforms. 

In the other group, display ads and social media saw a number of shifts due to policy changes, many of which revolve around the topic of consumer privacy rights.

Display advertising was hit hard by the uncertainty surrounding third-party cookies both from Google’s deprecation plans and from government legislation, such as the previously passed California’s Consumer Privacy Act (CCPA). With the unpredictable future of third-party cookies and their impact on the effectiveness of display ads, many advertisers have been looking into alternative IDs or looking to invest in channels like retail media that do not rely on cookies.

Social media also faced challenges related to legislation, most notably the potential sale or ban of TikTok in the U.S. Because TikTok is a major player within social media, its potential ban poses a risk for brands that have invested heavily in the platform, or had plans to do so. Similar to their considerations around third-party cookies’ uncertain future, marketers have to weigh the risks of staying on TikTok and losing their investments or jumping ship to other platforms. 

For further analysis on the pros and cons of each marketing channel and their platforms, read the full CMO Strategies series’ individual channel reports. 

Key findings: Ad-supported streaming

Read the full ad-supported streaming report

• Impressions and engagement/watch time were the top two success metrics advertisers consider on the three streaming services where they place the majority of ads — YouTube, Prime Video (with ads) and Hulu — for the second year in a row.

• Conversions was the third-most important success metric for advertisers on Peacock, Paramount+ and Hulu, according to Modern Retail’s survey. It tied for first place with impressions as the most important success metric advertisers consider on Max. Conversions data matters to brands and agencies because the data helps them assess their ROI on paid advertising spend.

• Most advertisers said the expense of buying and placing ads on platforms is the largest roadblock they encounter when it comes to ad-supported streaming services, followed by lack of scale.

• When Amazon launched its ad-supported tier, it set two pricing options for Prime Video, according to four agency executives. For ads guaranteed to run, advertisers were being asked to pay a mid-$30s CPM (roughly $36, per two of the executives). And for ads not guaranteed to run — “preemptible,” in industry nomenclature — advertisers would pay CPMs in the low-$30s.

• Brand safety on streaming platforms can be another area of concern for some advertisers. One area of frustration with brand safety centers on programmatic buys. CTV ad buyers would like CTV ad sellers to pass program-level information in the programmatic bid stream — for example, the specific show an ad would run during. But the sellers would prefer to reserve that information for direct deals that tend to be more valuable.

Key findings: Retail media

Read the full retail media report

• Amazon holds the majority of marketing budgets for retail media. However, competitors are making strides in the space. Walmart’s Walmart Connect and Target’s Roundel platform saw increased adoption from 2023 to 2024, with Walmart in particular almost doubling in percentage points from 24% of marketer respondents who said they used Walmart Connect last year to 46% who said they use it this year.

• There is a high correlation between the percentage of marketing budgets allocated to Walmart Connect and Target’s Roundel platform, indicating that the two could be growing in lockstep with each other.

• The majority of marketer respondents to Modern Retail’s survey said that they measure retail media success via commerce or sales rather than awareness metrics like impressions or engagement — 86% of respondents said commerce or sales is their primary measurement of marketing success across all retail media platforms in 2024, versus 9% who said the same of engagement and 1% who said impressions is their top success metric.

• Though retail media has strengths as a bottom-funnel marketing strategy, the channel has started showing signs of breaking into the top of the funnel.

• As more retailers introduce their own RMNs, marketers have had to stretch their budgets in order to balance their platform mix. Some experts have even said that this influx of new RMNs is not sustainable and can harm retailers and advertisers.

• Scalability became less of a challenge this year for RMNs. Eight percent of marketers on average said scalability is an issue in 2024 versus 29% in 2023.

• While scalability has become less of a challenge in 2024, standardization of data attribution and measurement in the channel has become more challenging as marketers seek to understand the impact of their investments.

Key findings: Display ads

Read the full display ads report

• Despite brand safety issues associated with made-for-advertising sites and AI’s looming challenges, programmatic advertising is on the rise. Over three-quarters of respondents (77%) said this year that they use programmatic ads — a larger group than last year’s 64% of respondents. 

• A quarter of marketers (25%) selected brand safety as the biggest challenge they face with programmatic advertising, as it is hard to control what content their ads will appear next to.

• Modern Retail’s 2023 CMO Strategies series predicted that marketers’ use of email ads would increase, which has proven correct. Email newsletter sponsorships or ads are the second-most used type of display ads in 2024, outranking last year’s second-place direct-sold ads by 5 percentage points.

• Over a third of marketers (36%) chose click-through rates as their main measurement of success for email sponsorships. 

• Cost of media remains marketers’ top barrier for all types of display advertising. The largest group of respondents (80%) said cost of media was the biggest challenge they face with direct-sold advertising, which requires advertisers to buy ad inventory directly from publishers.

• A common reservation marketers expressed with display ads is the lack of lasting impact they have on audiences due to creative format constraints and inflexible ad placement options. 

Key findings: Social media

Read part one of the social media report

Read part two of the social media report

• Social media remains the most popular marketing channel — 97% of marketers use social media — primarily because of its massive audience reach and because it offers marketers the opportunity to establish genuine, organic connections with consumers.
  
• Meta-owned platforms Instagram and Facebook remain the predominant players within social media, holding the No. 1 and No. 2 spots, but marketers’ use of Pinterest, Reddit and Snapchat has increased in 2024.
  
• Pinterest, Reddit and Snapchat have all made concerted efforts to attract marketers and grow ad revenue over the past year. Reddit touted its search ad business, Snapchat offered improved ad products and Pinterest promoted itself as an online oasis for consumers.
  
• Marketers’ use of TikTok declined slightly in 2024. TikTok faces a potential ban or sale in the U.S., and marketers are exploring contingency plans, such as moving ad spending to other platforms. 

• Marketers’ use of X (formerly Twitter) dropped by 6 percentage points in 2024. X has experienced continued turbulence since Elon Musk’s takeover, including mass layoffs and seemingly never ending platform and policy changes, causing a decline in marketer usage.
  
• Engagement is the primary measurement of success marketers turn to on all social platforms, with the exception of Pinterest. Engagement on social media is unique among marketing channels in that it shows marketers the types of products consumers gravitate toward.
  
• Marketer survey respondents said Instagram is the best social platform for branding and for driving conversions. Instagram is particularly effective for growing organic brand reach, with more tools for engagement and a focus on images and videos which can inspire comments, likes and shares. Likewise, engaged users are more apt to convert.
  
• Cost of acquisition remains marketers’ biggest challenge on most legacy social media platforms like Facebook, Instagram and YouTube — a common concern across media channels.
  
• Lack of consumer interest was a new concern for marketers on Facebook, while lack of resources and content demands appeared as a new concern on TikTok. Marketers are leaning into creator content to bulk up their offerings, but they must grapple with brand safety concerns on user-generated content-focused platforms where brands have less control because of the emphasis on content creators’ unfiltered opinions and comments.