If you received a report in an advertising operations meeting saying, “We’ll increase search advertising spend to boost ROAS this quarter as well,” you should pause for a moment. The game rules of Retail Media Networks are changing. To be frank, it’s becoming a dangerous gamble to assume that the budgets poured into RMN over the past few years will deliver the same efficiency going forward.
Why Retail Media Networks Are Shaking
Six out of ten consumers worldwide ask AI and large language models before making a purchase. Questions like “Is this product good?” and “What’s better at a similar price point?” have shifted from search bars to AI chat windows. Meanwhile, Retail Media Networks have generated revenue by exposing ads when consumers type keywords into search bars. When this premise collapses, the criteria for ad placement itself must be redesigned.
Teams obsessed with performance metrics are more likely to miss this change. The moment you judge that there’s no problem because cost-per-click is still manageable and impressions are maintained, you’re actually drifting further away from the consumer’s decision-making path.
From ‘Where to Display’ to ‘How to Connect in Context’
STP from marketing fundamentals still lives on. However, the stage for positioning has changed. In the past, the top of search results was the stage for positioning. Now, brands must position themselves in the middle of the conversation where AI delivers recommendations to consumers. For both Retail Media Network operators and brands, this is not a simple channel addition but a signal for strategy redesign.
3 Things to Check in the New Environment
- Redefining USP: Does our brand have a clear differentiator worth recommending to consumers by AI?
- Data Gap Analysis: Identify what consumers are asking AI, not just click data
- KPI Restructuring: Move from impression and click focus to appearance frequency within AI recommendation context and actual conversions
Foundation to Assess Before Increasing Ad Budget
Even if you double retail media budgets, efficiency drops if the brand doesn’t make AI’s recommendation shortlist. Filling short-term results through ad budget increases is no different from marketing addiction. What’s needed now is brand resilience—a meaningful identity that AI can naturally reference.
Frequently Asked Questions
Should I reduce Retail Media Network investment immediately?
The key is reallocation, not reduction. You must shift budgets heavily concentrated on search keyword bidding to strengthening content, product information, and review assets where your brand can be cited in AI recommendation environments. Redesigning the exposure context within the channel itself is the priority over the channel itself.
What KPIs are appropriate for the AI recommendation era?
Click-through rate and impressions alone are insufficient. You must look at brand mention frequency in AI responses, recommendation context accuracy, and final purchase conversion rate together. Relying on a single metric is repeating the trap created by past ROAS obsession.
Insights from Soulpapa Marketing — Korea’s digital marketing agency.
Original Korean article: https://soulpapa.co.kr/2026/05/21/retail-media-network-ai-recommendation-strategy/
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