Retail media is ‘not invincible,’ our analyst warns

Plus: 3 recent retail media developments and why they matter This edition is made possible by Walmart Connect DECEMBER 4, 2023 We’re working with TripleLift to field a Retail Media Perception Survey to better understand how and if brands, agencies, and more are prioritizing retail media in their organizations. By participating in our survey, you have the chance to enter a drawing to win one of five $100 Amazon gift cards. [Take the survey here](! [Retail media is the fastest growing ad channel, but ‘is not invincible,’ our analyst warns]( Retail media just got even bigger. We recently updated our US retail media ad spend forecast to show higher growth than previously estimated, culminating in $109.40 billion in spend in 2027. - Retail media is going to be the fastest growing ad channel across media through 2027, growing by more than 20% each year, according to our forecast. - By 2027, retail media will nearly tie with social media as No. 2 ad spend channel, second only to search. - Retail media will be bigger than connected TV, digital audio, traditional television advertising combined in 2027. [Retail media is the fastest growing ad channel, but ‘is not invincible,’ our analyst warns]( Story continues below. “The reality is that retail media is not invincible,” said our analyst Max Willens [during a recent webinar](. Nearly half (42%) of advertisers worldwide don’t plan to change their retail media ad spend through 2026, according to a June 2023 Epsilon report. Reasons for the hesitation to increase spend include: - Lack of [standardization of measurement]( across retail media networks - Lack of [standardization of ad formats]( across retail media networks - Difficulty coordinating spend when using [retail media networks]( to advertise via programmatic display, social media, and connected TV (CTV) That said, retail media networks leverage a winning positive feedback loop. “Increasingly, people are turning to websites and turning to online retailers to purchase basics,” said Willens. That puts a lot more power into the hands of multichannel retailers like Target, Walmart, and Amazon. - More site visits means more ads are served. - Increased ad impressions means more transactions on those ads. - Those transactions offer more data for retail networks. - More data drives more efficient ad targeting. - Better ad targeting means advertisers build better relationships with retail media networks and are willing to spend more. Most retail media ad spend is being driven by Amazon. In 2023, Amazon makes up 75% of the US retail media market, and even though it’s losing share, it will continue to be the biggest retail media player for the foreseeable future, per our forecast. - Prime will prevent Amazon’s share from dropping quickly by serving as a “lock-in” for Amazon’s massive audience with the promise of free shipping, noted Willens. - Amazon’s introduction of ads into Prime Video will also boost the entire retail media market, said Willens. But outside of Amazon, retail media looks a bit different. [On Amazon, search spend is growing]( faster than display, but the two formats are growing at a more even clip on other platforms. Who else matters? “Walmart, to my mind, has been one of the most under-discussed media success stories of the last several years,” Willens said. Between this year and 2025, Walmart will double its ad business from $3.19 billion to $6.18 billion, according to our forecast. “The companies that are really going to achieve escape velocity and drive tons and tons of revenue for themselves with retail media are the companies that are going to have lots and lots of repeat business and lots and lots of repeat customers,” Willens said, pointing to the likes of Walmart, Target, and Instacart. [Read online]( [3 recent retail media developments and why they matter]( The world of retail media is always changing. Here’s what has caught our eye over the past few months. 1. Walmart, Amazon experiment with shoppable TV The latest: [Walmart is partnering with Peacock]( to offer AI-powered, interactive shoppable ads during episodes of “Below Deck Mediterranean,” while Amazon’s first Black Friday NFL game featured shoppable ads from brands like TCL and Dyson. Why it matters: Though shoppable TV requires a shift in how consumers browse and buy, it can be quite effective in grabbing viewers’ attention and shortening the time between inspiration and purchase. 2. Albertsons implements shoppable recipes The latest: [Albertsons has integrated Chicory’s shoppable recipe technology]( into its retail media network, enabling customers to purchase items directly from the recipes they are browsing. Why it matters: Shoppable recipes can help reach customers at the point of inspiration, making the shopping journey easier and leading to higher conversion rates for retailers. 3. United Airlines considers commerce media The latest: [United Airlines may start selling personalized ads](, according to a report from The Wall Street Journal. People familiar with the matter said the airline may use passenger data to show targeted ads to its customers on seatback screens or its mobile app. Why it matters: The popularity of retail media is growing beyond the retail channel. Travel and hospitality brands like United Airlines are particularly well positioned to break into commerce media due to the massive amounts of first-party data they collect from customers. [Read online]( Email sent to: {EMAIL} If you cannot view the HTML newsletter, [please read it in your browser here](. [Become a Premium Subscriber]( | [Advertise with us]( [Manage your email preferences]( | [Unsubscribe]( | [Terms of Use]( | [Privacy Policy]( ©2023 Insider Intelligence, One Liberty Plaza 9th Floor, New York, NY 10006 [LiveIntent Logo]( [AdChoices Logo](