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Retail Media Shakes Up Adland

eMarketer projects retail media spend to hit $61.15bn in 2024 in the US alone, accounting for nearly 20% of digital ad spend. Armed with an unrivalled wealth of first-party shopper data, platforms like Amazon, Walmart, and Deliveroo are turning themselves into compelling advertising options for brands.


Amazon gets serious about advertising

Retail media is advertising using retailers’ own omnichannel properties and data, leveraging their ecosystems to create a brand-safe medium to advertise to people who may already be in the shopping mindset, with the tools to track attribution effectively.

The most successful proponent of retail media is Amazon, whose advertising revenues have grown enormously in the past five years. Most recently, Amazon reported more than $9.5bn for the three months ending September 2022, an increase of 25% year on year making it one of the biggest advertising platforms, and rising at a time when ad revenues at other tech giants are becoming increasingly challenged.

Advertising reportedly gives Amazon very high margins, much higher than commerce. Advertisers benefit from access to Amazon’s data on their own logged-in customers, including address and purchase history, the ability to target shoppers searching for specific products and categories, and the ability to track the path to purchase, when users are likely to buy within minutes of being exposed to an ad, and without travelling to multiple sites. 


The first-party data advantage

Shopping data gives retail media sites a big advantage over more traditional publishers and even newer social media apps and content sites that simply do not have as much data on their users, especially with the ongoing deprecation of third-party cookies as targeting and measurement technology within online campaigns. 

Many retailers and fulfilment companies are now introducing their own advertising opportunities, including traditional retailers like Walmart that reported 30% growth in ad revenues in August 2022, newer eCommerce players like Instacart, delivery and mobility apps like Uber, Lyft, and Deliveroo, and even hotels like Marriott.


A new ad giant in the making?

Perhaps the elephant in the room is Apple. While it is not a traditional retail player, its App Store is a hugely profitable sales driver, and this is also a growing advertising platform for anything from apps to lifestyle products. While Apple has been reducing the acceptance of third-party cookies in apps on its devices, it still collects massive amounts of first-party data on its own users, including their interests and activities. 

If Apple wanted to be a big ad platform it could become one, and some recent cues may indicate a future ambition in that domain. For example, Apple has started to sell an ad in the Today tab, to appear prominently on the front page of the App Store — making it some of the first content users see when they begin their App Store visit.


What Brands Can Do

  • Test retail media sites - if you are not already - to understand how your performance differs from performance on traditional platforms and incorporate their data into media planning.
  • Try a variety of retail site categories. What works best for advertising different sorts of products?
  • Investigate becoming a media owner. Do your own sites suit ads for non-competitive products?


For more information, download our recent Thought Leadership piece: Media Trends 2023