Marketers are projected to spend $128 billion on retail media this year, according to a global forecast from marketing research firm WARC. This represents a 10.2% increase from last year, and it is expected to grow another 10.5% next year. The rise in retail media spending appears to come at the expense of traditional channels like Google search and offline media channels such as linear TV.
Retail media has become a highly sought-after category in advertising, driven in part by marketers who are concerned about the economy and are investing in ads that directly drive purchases. Alex Brownsell, WARC’s head of content, noted that this increase in retail media spending is coming at the expense of traditional channels such as linear TV, print newspapers and magazines, and audio.
The forecast indicates that spending on linear TV is expected to decline by 5.4% this year, bringing its share of total global ad dollars down to 16.3%. Ad budgets for “newsbrands and magazines” will also decrease by 5.9%, and audio ad spend is expected to decline by 0.8%. In contrast, retail media is expected to grow its share to 13.3% of total ad spending.
Retail media platforms are also capturing search spend that would typically go to Google. Insider Intelligence predicts that US search spend on retail media properties will grow by 18.7% this year, while search spend outside of retail media will only grow by 5%. Despite Google’s offering of Shopping Ads and analytics and order management tools, industry analysts do not typically consider Google as a retail media operator.
Amazon is expected to be the biggest beneficiary of the retail media surge, accounting for over a third (34.6%) of global retail media spending by 2023. Other players in the retail media space include supermarkets like Kroger, ecommerce sites like Farfetch, and apps like Uber.
However, not all retail media spend is coming at the expense of Google and traditional advertising channels. Forrester’s second-quarter marketing CMO pulse survey found that the majority of retail media spend is coming from existing trade and shopper marketing budgets. Retailers are reallocating these budgets to fuel the growth of their retail media networks.
Retail media sellers are aggressively expanding their ad formats beyond search to capture a larger share of ad budgets. For example, Amazon offers a range of video, streaming, and social commerce offerings, while Walmart is expanding its in-store advertising business. Instacart plans to roll out “shoppable products brand pages” as part of its advertising strategy.
It is important to note that not all retail media networks are expected to become major ad players. Insider Intelligence predicts that Instacart and Walmart will be the two fastest-growing players in US digital advertising this year, ahead of non-retail media companies like Apple and TikTok. Amazon is also expected to experience significant growth.
In conclusion, the rise in retail media spending is impacting traditional channels like Google search and linear TV. Retail media platforms, led by Amazon, Walmart, and Instacart, are capturing a larger share of ad budgets and expanding their ad formats beyond search. However, smaller retail media networks may focus on allowing advertisers to reach their customers across other sites.
Original Story at www.businessinsider.com – 2023-09-02 13:30:00
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