GroupM's Predictions on Retail Media Growth
GroupM, the globe's largest media purchasing agency, anticipates retail media, or advertising on retailer-owned e-commerce platforms, to experience a 9.9% increase. The forecast predicts that in 2023 this revenue will reach $125.7 billion. By 2028, retail media is expected to surpass TV ad revenues, accounting for 15.4% of total ad income.
Retail Media's Rising Stars: Digital Out-of-home Screens and Connected TVs
GroupM's 2023 Global Mid-Year Forecast report positions retail media as the third quickest-growing ad channel for the year, trailing only digital out-of-home (OOH) screens and connected TVs (CTV). However, these two trailblazers are still considerably smaller than the retail media segment. This projection aligns with a previous forecast from eMarketer, a renowned market research firm.
Retail Giants Leveraging Retail Media
Global retail powerhouses like Amazon, Walmart, Target, Carrefour, Ahold Delhaize, Tesco, and Sainsbury's are pushing hard to draw big advertisers to their websites. Retailers benefit doubly by getting consumer brands to advertise on their platforms, earning from each product sold and the ad itself.
Advertisers Finding Value in Retail Media
Consumer brands are willing to pay top dollar for prime positioning on these retailer sites, where profit margins can be as high as 90%. Retail media also offers advertisers a chance to diversify their ad spending beyond the Google and Meta Platforms duopoly, particularly with the shifting digital privacy landscape due to the EU's General Data Protection Regulation (GDPR). This has heightened the worth of first-party data retailers collected to target and gauge ad effectiveness.
Retail Media's Innovators: Amazon and Walmart
Amazon leads the retail media arena, reporting an impressive $11.6 billion ad business revenue for the fourth quarter. Meanwhile, Walmart Connect, the retail giant's media business, is rising, with sales surging nearly 30% to $2.7 billion for the fiscal year ending January 31.
European Retailers Eyeing the Retail Media Opportunity
While US companies lead in retail media networks, European retailers are catching up. Dutch supermarket Ahold Delhaize has reached approximately half its goal of expanding revenue from businesses beyond grocery stores to 1 billion euros by 2025. British grocery titan Sainsbury's has launched Nectar360, merging its loyalty scheme with marketing services and projecting an additional profit of more than 90 million pounds ($113 million) by 2026.
According to consultancy firm McKinsey, UK grocery sector retail media networks have the potential to generate a profit of 1 billion pounds within the next two years.
