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Analyst Take: Why retail media is destined to be the biggest of digital advertising’s three big waves

Retail media is following in the footsteps of search and social as digital advertising's third big wave, and has already established itself as a force. Built on a foundation of valuable first-party purchase data, contextually relevant ad experiences, and closed-loop reporting, retail media is seeing advertiser budgets quickly migrating in its direction. This fall, Amazon’s exclusive rights to NFL Thursday Night Football will “kick off” the first of retail media’s next three phases of growth and prove why digital advertising’s third big wave is destined to be the biggest.

This Analyst Take is the first in an ongoing series focusing on the rise of retail media. Subsequent coverage will analyze specific drivers of future growth, which retail media networks will advance the market, and how brands can take advantage of new opportunities.

We expect US retail media ad spend to jump 31.4% to $40.81 billion this year, more than tripling from its 2019 total of $13.23 billion. Even as growth rates taper from their pandemic highs—57.3% in 2020 and 49.3% in 2021—it’s clear that retail media is still in its early days.

Retail media has barely scratched the surface of its potential. To date, most retail media ad spend comes from the low-hanging fruit of sponsored search. Retail media networks (RMNs) were able to adapt the Google playbook to ecommerce contexts to capture brand spend.

Though search is already large and well-established, it still has plenty of runway as RMNs proliferate and mature. And yet, other retail media ad formats remain largely untapped.