Retail media ad revenue is predicted to outstrip television sales by 2028, with the medium set to grow by 9.9% this year alone according to WPP-owned global media firm GroupM’s mid-year forecast.
The report predicts that the total advertising revenue of retailer-owned e-commerce sites will reach US$125.7 billion by the end of the year, accounting for an estimated 15.4% of global ad revenue by 2028.
It also revealed that the medium was now the third fastest growing advertising channel behind digital out-of-home and connected TV – although those two channels are of negligible size in relation to global media.
Many global retail powerhouses such as Amazon, Walmart, Carrefour, Tesco and Sainsbury’s are now actively trying to recruit big-name advertisers to their platforms.
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Retailers have now cottoned onto the fact that they can generate vast profits by encouraging consumer brands who sell via their platforms to also advertise on them. This allows the retailers to generate sales from each item sold, on top of the initial payment for the ad itself.
Profit margins can be as high as 90%, meaning companies are willing to pay a hefty premium for a prominent spot.
These developments follow the rapid rise in e-commerce seen during Covid-19 pandemic which accelerate the global tendency towards online retail, thus making the sector much more attractive to consumer brands.
Online fashion giant Asos partnered with ad tech firm Criteo to ramp up its advertising revenue earlier this year, signing a three year advertising deal.
UK grocer Sainsbury’s is also looking to harness retail media through the development of Nectar360, which merges its loyalty scheme with marketing service to create an integrated offering. The chain expects Nectar260 to generate an additional £90 million by 2026.
