“I don’t think it’s an exaggeration to say that retail media is one of the most important and potentially most transformative ad spending channels in media right now,” our analyst Max Willens said during a recent Meet the Analyst Webinar.
The channel’s growth is staggering. It took only five years for retail media to become a $30 billion channel. In comparison, social took 11 years and search took 14.
Retail media is experiencing a reality check: Last year, we forecast retail media would bring in $61.15 billion in ad revenues by 2024. A perfect storm (difficult macroeconomic conditions, measurement challenges, and a confusing number of choices) led us to downgrade that forecast to $55.31 billion.
Challenges ahead: As the number of retail media networks (RMNs) increases, it’s difficult to evaluate incrementality and identify which networks are worth investing in.
How brands and RMNs can help:
The who’s who: Unsurprisingly, Amazon is the top dog of retail media, said Willens, generating more than three-quarters ($33.96 billion) of US ad spend this year, per our forecast.
On again, off again: On-site media will account for over 85% of retail media spend this year, bringing in $38.59 billion (compared with $6.55 billion in off-site spend), per our forecast.
Looking ahead, off-site retail is going to be a “big deal,” said Willens, particularly across social media, where brands can use retailer data to better target audiences.
And though it only represents 0.5% of retail media ad spend this year, in-store presents a chance for brands to reach a portion of consumers who prefer to shop at brick-and-mortar stores.
Want to learn more about the potential of off-site and in-store media? Watch sessions on-demand from our “Attention! Streaming and the New Digital Ad Economy” virtual summit last week.
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.
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