Retail media advertising is undergoing a dynamic transformation, with global spending predicted to reach an impressive $128.2 billion this year. This significant uptick, projected to grow by 10.2% year-on-year, underscores the growing prominence of retail media in the advertising landscape. According to the latest insights from WARC Media, by 2024, ad investments in this sector are expected to soar to $141.7 billion, positioning retail media on the cusp of overtaking linear TV as the third-largest channel in ad spend.
The report delves into the rapid expansion of retail media ad spending, delving into potential brand challenges and featuring expert insights on the future of retail data in enhancing media campaign effectiveness.
In a noteworthy revelation, the report indicates that Amazon is poised to ascend the ranks, potentially surpassing Alibaba as the world’s largest retail media owner in terms of ad revenue in the current year. This surge in retail media advertising is dominated by two industry giants, Alibaba and Amazon, who collectively amassed an astonishing $80 billion in advertising revenue in 2022, constituting a remarkable 68.3% of the total global retail media investment.
One of the standout aspects of this growth is Amazon’s exceptional dominance outside of China, claiming an impressive 87.8% of the market, according to WARC’s estimates. This year, Amazon’s ad revenue is forecasted to reach $45.4 billion, marking a substantial year-on-year growth of 20.4%. This surge is poised to propel Amazon to the position of the world’s largest retail media owner, dethroning Alibaba. The growth trend is expected to continue into 2024, with Amazon’s ad revenue projected to reach $52.7 billion, reflecting an impressive 16% increase. In contrast, Alibaba is anticipated to experience more modest growth, with ad revenue of $42.1 billion and a 1.4% year-on-year increase in 2024.
Moreover, the report highlights a significant shift in retail media advertising, extending beyond traditional paid search formats. While it continues to be a vital channel for driving sales conversions, only 30% of respondents utilize retail media for brand awareness.
As retail media continues to evolve, it presents promising opportunities for advertisers to engage audiences innovatively across a spectrum of media platforms. This shift signifies a profound transformation in the advertising landscape, with retail media playing a pivotal role in the future of advertising.
As the significance of retail media advertising continues to grow, companies are diligently working to meet its demands. Microsoft has taken a significant step by introducing the Microsoft Advertising Network for Retail, a platform dedicated to streamlining and elevating retailers’ retail media networks.