Every euro spent on digital ads must pull its weight in 2023. Advertisers and marketers can’t afford to waste budget, so we foresee a partial shift away from display ads and renewed emphasis on search—with one big exception, retail media.
Search spending will rise faster than total digital ad spending.
Meanwhile, spending on retail media networks is surging. Total outlays on retail media in Europe hit €7.9 billion ($7.97 billion) in 2021, according to Interactive Advertising Bureau (IAB) Europe, and are expected to reach €25 billion ($25.21 billion) by 2026. A 2022 survey by IAB Europe and Xandr found 92% of advertisers and 74% of agencies were already using retailers’ media platforms. Another study, by Publicis Commerce, revealed 52% of marketing and business professionals in France expected their investments in retail media to rise in 2023.
Google will struggle to remain relevant for product research. Many consumers in Latin America now start on retailers’ digital properties to research products, find inspiration, and search for deals—a shift also seen in countries like the US, the UK, and France.
Mainstream search engines’ dominance is no more.
Marketers will reallocate ad dollars to bottom-funnel performance ads on retailers’ digital properties, as they face mounting pressure to deliver solid returns on investments. Budgets for linear TV and traditional search engines will shrink as a result.
Offsite targeting solutions will become a vital part of retailers’ ad offerings this year, as the need to find newer pockets of value intensifies. Prominent players like Amazon, Mercado Libre, Rappi, and Walmart de México y Centroamérica (Walmex) already offer brands the ability to programmatically buy ads on and off their websites. Others will likely follow suit as competition for ad dollars heats up.
Brick-and-mortar will be retail media’s next frontier. As in-store sales return to—and even exceed—their pre-pandemic levels, retailers like Walmex and Cencosud are quickly turning their physical stores into monetizable media assets. Brands can now place advertising on in-store digital screens, in parking lots, on shopping carts, and in shopping aisles.
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