Advertisers boost spending at retailers such as Walmart and Amazon as TV shrinks
Is Retail Media Ousting Traditional TV Ads?
Advertisers are shifting their focus from traditional TV to retail media networks like those operated by Amazon and Walmart, which display ads in stores, apps, and websites. This shift is driven by the decline in traditional TV advertising and changes in digital privacy laws affecting ad targeting. Global retail media ad spending is projected to grow from $114.18 billion in 2023 to $233.89 billion in 2027, capturing a larger share of digital advertising. Retail media offers advertisers valuable first-party customer data, enhancing their ability to target ads effectively.
How much is global retail media ad spending expected to grow by 2027 according to eMarketer?
According to eMarketer, global retail media ad spending is expected to more than double from $114.18 billion in 2023 to $233.89 billion in 2027.
What advantages do retail media networks offer advertisers in terms of data usage and customer targeting?
First-Party Data and Targeting Precision
Retail media networks offer advertisers significant advantages in terms of data usage and customer targeting36. These networks utilize first-party data collected from customers who interact with their platforms, such as websites, mobile apps, and in-store transactions3. This data includes detailed information on customer behavior, preferences, and purchasing history. Unlike third-party data, which is often less precise and increasingly subject to privacy regulations, first-party data is directly collected and managed by the retail platforms themselves, ensuring higher accuracy and relevance.
Connecting Online Ads to In-Store Purchases
A key benefit highlighted by retail media networks is their ability to link online advertising efforts directly to in-store purchases1. For example, Walmart's CEO Doug McMillon mentioned that if a customer sees a digital ad and later makes a purchase in a store, Walmart can track this transaction and confirm the effectiveness of the advertisement2. This capability provides advertisers with clear evidence of ad performance, enhancing their ability to measure return on investment accurately.
Compliance and Privacy Advantages
With increasing scrutiny and regulations around data privacy, retail media networks offer a compliant way to handle customer data5. They manage their own first-party data, which allows them to maintain control over privacy and compliance issues. This management of data not only aligns with privacy laws but also builds trust with consumers, ultimately benefiting advertisers who rely on these networks to reach their target audiences without compromising on compliance standards3.
Overall, retail media networks provide a robust framework for advertisers to reach consumers effectively while leveraging rich data insights in a privacy-compliant manner.