Retail media is booming fast, with a huge jump to nearly £78 billion globally by 2025. This growth is faster than any other ad type, with a 22% increase expected for 2024. In the US, spending on retail media ads is set to hit £83 billion by 2027.
This change is reshaping how marketers advertise. Specifically, retail media includes on-site, off-site, and in-store ads. It has now become a key element in advertising plans everywhere.
Retail advertising and analytics are vital in this shift, allowing marketers to use their own data and understand customers better. Consequently, retail media offers unique ways to advertise and improve online shopping. It provides brands with a direct link to customers, leading to increased budgets and expanded marketing teams.
Given retail media’s growing importance, continuous learning is essential. Therefore, we will explore how it is changing advertising and assisting brands in innovative ways.
Key Takeaways
- Retail media’s ad spending is projected to increase by £78 billion by 2025.
- In the US, retail media network ad spending is expected to reach £83 billion by 2027.
- Retail media enables brands to leverage rich first-party data for targeted advertising.
- E-commerce marketing tactics are enhanced through personalized and data-driven retail media strategies.
- The combination of on-site and off-site advertising channels boosts marketing effectiveness.
- Retail media is transforming how brands approach advertising, necessitating perpetual learning and adaptation.
What is Retail Media?
Retail media involves advertising services that retailers offer, similar to traditional media publishers. This includes ads on websites, apps, and other platforms. Retailers use their data to influence what customers buy. This smart approach to digital marketing helps brands reach consumers at crucial moments in their shopping journey.
Definition and Overview
Retail media allows brands to advertise on retailer sites and apps. They can sell products directly with retailers or target people with ads from other industries. It’s a significant part of omnichannel retail advertising. By using ads on retailer sites and apps, retail media captures consumer attention when they’re about to make a purchase, thereby increasing sales. Additionally, it utilizes ads on other websites to bring consumers back to complete their shopping.
This strategy, combined with the rise of online shopping, personalized ads, and the linkage of ad spending to sales, has significantly elevated the importance of retail media.
Retail Media Networks
A ‘retail media network’ (RMN) is the system that retailers use to allow brands to reach customers. For instance, big names like Amazon and Walmart have their RMNs, showcasing how data-driven retail advertising operates. Notably, Amazon leads with a substantial 77% of the U.S. retail media market in 2023.
Most CPG brands collaborate with Amazon, and many also partner with Walmart Connect, eBay, and Home Depot. A significant number of retailers generate over $100 million from their media networks, demonstrating the crucial role RMNs play in leveraging online shopping habits to generate substantial ad revenue.
The Growth of Retail Media
Retail media is growing rapidly and is impossible to ignore. It is outpacing overall digital ads due to innovative ways to target ads and engage shoppers. By 2027, retail media is expected to grow by 60%, much faster than digital ads overall. This growth is driven by the ‘Amazon effect,’ which is changing how retailers monetize their data.
Market Expansion
The retail media market is expanding quickly. For example, in 2023, it is expected to hit $128.2 billion globally. Technology and electronics brands alone will spend $23.8 billion in 2024. Furthermore, the U.S. market is set to reach $61.15 billion by 2024.
Europe is also experiencing a significant increase, with a 35.9% growth in retail media spend in 2024, reaching €14.3 billion. This underscores the growing importance of retail media in digital advertising.
Drivers of Growth
Several factors are driving the growth of retail media. Firstly, utilizing first-party data helps brands better target ads and improve their campaigns. As third-party cookies decline, first-party data is becoming essential for a better understanding of shoppers.
With the surge in online shopping, retail media is receiving a substantial boost. In the U.S., online sales hit $870 billion in 2021, up 14.2% from the previous year and 50.5% from 2019. Consequently, retail media’s flexibility…
Source Links
- https://www.tagww.com/insights/understanding-retail-media-what-brands-need-to-know-now/
- https://www.bannerflow.com/blog/what-is-retail-media-an-introduction
- https://www.criteo.com/ultimate-guide-to-retail-media/
- https://www.criteo.com/blog/wtf-is-retail-media-guide/
- https://www.retailtouchpoints.com/topics/digital-marketing/retail-media-explained
- https://econsultancy.com/stats-growth-retail-media/
- https://www.dataimpact.io/insights/why-is-retail-media-growing/
- https://www.bluewheelmedia.com/blog/the-rise-and-influence-of-retail-media
