AUGUST 2022

Paul Verna

Retail Media Ad
Spending Forecast
The Market Weathers Economic Turbulence
Spending on digital retail media networks and the ecommerce channel is growing
faster than that of every ad format we track, with the exception of connected TV
(CTV). As a lower-funnel channel, retail media is helped by a tight connection with
consumer spending, which hasn’t suffered as much as other elements of the economy.
This eMarketer report reveals our latest forecast and analysis of ad spending on
digital retail media, including the ecommerce channel, as well as a look at how
market conditions could affect this sector.

Presented by
Dear eMarketer Reader,

eMarketer is pleased to make this report, “Retail Media Ad Spending Forecast:

The Market Weathers Economic Turbulence,” available to our readers.

This eMarketer report reveals our latest forecast and analysis of ad spending on
digital retail media, a deep dive into how market conditions could affect this sector,
and strategies for advertisers to scale growth in the years ahead.

We invite you to learn more about eMarketer’s approach to research and why
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Nancy Taffera-Santos
Nancy Taffera-Santos
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eMarketer, Inc. www.emarketer.com

11 Times Square, Floor 14 nancyts@emarketer.com
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 Retail Media Ad Spending Forecast 2022: The Market Weathers
Economic Turbulence
Retail media networks are among the fastest-growing and most dynamic ad marketplaces in the US. Retailers think of
these operations as a means to boost revenues by leveraging their scale and their troves of first-party data.

3 KEY QUESTIONS THIS REPORT WILL ANSWER

US Digital Retail Media Ad Spending, 2019-2024
1 How much will US advertisers spend on retail media billions, % change, and % of digital ad spending
$61.15
networks through 2024?
$51.36
2 How resistant is retail media ad spending to market
57.3%
turbulence and macroeconomic headwinds? $40.81
49.3%
3 Who are the top market players and what are their $31.06
value propositions? 31.4%
25.8%
$20.81
WHAT’S IN THIS REPORT? Our latest forecast and 19.3%
$13.23
analysis of ad spending on digital retail media, including
16.4% 18.1% 19.1%
the ecommerce channel, as well as a look at how market 13.6% 14.7%
10.0%
conditions could affect this sector.
2019 2020 2021 2022 2023 2024
Digital retail media ad spending % change % of digital ad spending

Note: digital advertising that appears on websites or apps that are primarily engaged in
retail ecommerce or is bought through a retailer's media network or demand-side platform
(DSP); examples of websites or apps primarily engaged in retail ecommerce include Amazon,
Walmart, and eBay; examples of retail media networks include Amazon's DSP and Etsy's
Offsite Ads; includes ads purchased through retail media networks that may not appear on
ecommerce sites or apps
Source: eMarketer, March 2022
274637 eMarketer | InsiderIntelligence.com

KEY STAT: In 2022, US digital retail media ad spending

will reach $40.81 billion—more than triple its pre-
pandemic total.

Contents
3 Retail Media Ad Spending Forecast 2022: The Market
Weathers Economic Turbulence
4 The One-Pager
5 Key Points
5 A Rapidly Surging Market for US Digital Retail Media
9 How Could Market Conditions Affect Retail
Media Networks?
11 Innovations in an Ever-Evolving Retail Media Market
15 Editorial and Production Contributors

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 3
 The One-Pager

Retail Media Ad Spending Forecast 2022

The One-Pager
The Market Weathers Economic Turbulence
How is retail media ad spending holding up against market uncertainty? Spending on digital retail media networks and
the ecommerce channel is growing faster than that of every ad format we track, with the exception of connected TV (CTV).
As a lower-funnel channel, retail media is helped by a tight connection with consumer spending, which hasn’t suffered as
much as other elements of the economy. However, the longer and deeper a potential downturn is, the more likely it will affect
retail media budgets.

In 2022, US digital retail media ad spending will reach

Key Stat
$40.81 billion—more than triple its pre-pandemic total.

Our Findings Your Opportunity

Retail media ad spending is holding steady against economic A tight connection with ecommerce spending makes
challenges—for now. retail media a winning bet for advertisers.
Retail media is the second-fastest-growing ad The past two years have been a perfect storm
format. Spending on retail properties will grow by a for retail media. An explosion in ecommerce has
compound annual rate of 30.9% from 2020 through created opportunities for marketers around retail
2024. networks.

The space has seen a wave of innovation. Media networks are a high-margin business. This
Incumbents have shored up their businesses and gives retailers incentive to boost their ad inventory,
new networks have sprung up, attracting a gold rush which expands opportunities for brands.
of advertisers.
Market turbulence has yet to curb retail media Retailers are eyeing video and CTV. While retail
spending. However, if current conditions worsen or media is mostly about performance-based ads, over
persist into 2023, spending could slow down. time it will move up the purchase funnel.

Also in this report: Amazon’s expansion into CTV | Instacart’s IPO plans

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 4
Key Points A Rapidly Surging Market for US
Digital Retail Media
■ Retail media is the second-fastest-growing ad
category. Spending on digital retail properties,
US digital retail media ad spending will reach
including the demand-side platforms that expand
$61.15 billion by the end of our forecast period in 2024.
retailers’ footprint outside their ecommerce platforms,
will grow by a compound annual rate of more than 30% This is nearly triple the 2020 figure of $20.81 billion and
from 2020 through 2024. Only connected TV (CTV) represents a compound annual growth rate (CAGR) of
will experience faster growth during the same period, 30.9% in that four-year span.
with caveats.

■ There has been a wealth of activity and innovation US Digital Retail Media Ad Spending, 2019-2024
in retail media. Over the past year, while market billions, % change, and % of digital ad spending
incumbents solidified their media businesses, several $61.15

new networks and alliances have sprung up, including

$51.36
players outside of conventional retail and third-party
57.3%
media partnerships. A dynamic ad market is now $40.81
49.3%
attracting a gold rush of advertisers mostly around
product searches, but also higher in the funnel. $31.06
31.4%
25.8%
■ The past two years have been a perfect storm for $20.81
19.3%
retail media networks. The onset of the COVID-19 $13.23
pandemic forced millions of people to transact online, 16.4% 18.1% 19.1%
13.6% 14.7%
lifting ecommerce businesses and the advertising 10.0%
opportunities around them. What’s more, media 2019 2020 2021 2022 2023 2024
networks are a higher-margin business than brick-and-
Digital retail media ad spending % change % of digital ad spending
mortar or online retail, so retailers with depressed foot
Note: digital advertising that appears on websites or apps that are primarily engaged in
traffic found they could make up for some lost revenues retail ecommerce or is bought through a retailer's media network or demand-side platform
(DSP); examples of websites or apps primarily engaged in retail ecommerce include Amazon,
by leaning into their ad offerings. Walmart, and eBay; examples of retail media networks include Amazon's DSP and Etsy's
Offsite Ads; includes ads purchased through retail media networks that may not appear on
ecommerce sites or apps
■ Retailers are eyeing opportunities to tap in to Source: eMarketer, March 2022
video and CTV. For now, the lion’s share of retail media 274637 eMarketer | InsiderIntelligence.com

dollars is spent on performance-based ads tied to

product searches. However, several retail media players, That means retail media will grow faster than all other
including Amazon, have made moves toward syncing major US ad channels except CTV. We forecast that CTV
their media networks with CTV platforms. Over time, will have a CAGR of 33.3% from 2020 to 2024. Channels
retail media ads could move up the funnel and tap in to with lower rates for that time frame include video (26.2%),
the surging CTV and social video markets. social media (21.4%), digital (20.0%), and search (18.5%).

■ These networks have been resistant to The projection of $61.15 billion also puts retail media
macroeconomic turbulence—so far. Headlines are in the same ballpark as traditional TV, which will reach
rife with bad news about the economy, supply chain $67.17 billion in 2024. Given the upward trajectory of retail
issues, global conflict, and more. For the most part, media and the gradual decline of TV, it seems only a matter
these adverse conditions have spared retail media of time before retail media becomes the bigger of those two
networks, which are tied mostly to ecommerce activity. ad markets in the US.
However, if current conditions worsen or persist well
into 2023, retail media spending could slow down.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 5
It should be noted that our current outlook for digital retail Market Drivers
media ad spending, while robust, is slightly lower than
what we previously expected. Back in October 2021, we Several drivers have contributed to the growth of the retail
projected spending of $52.21 billion for 2023, compared media sector and innovation in the space:
with our current estimate of $51.36 billion. The reason
■ The ongoing deprecation of third-party cookies and
for this reduction of about $850 million—or 1.7% of the
mobile identifiers. Ad sellers, including retailers, have
previous total—is twofold: negative impact from supply
doubled down on their first-party data in the name of
chain disruptions (analyzed later in the section on market
protecting consumer privacy.
conditions), and new visibility into Amazon’s and Walmart’s
ad revenues from their quarterly earnings. ■ The pandemic-driven shift from physical to online
retail. The trend helped redirect marketer emphasis,
Retail media ad spending tracks closely with its largest particularly in the consumer packaged goods (CPG)
subset: ecommerce channel ad spending. The latter sector, from in-store trade ads to virtual storefronts.
category will be robust over the coming years, growing at a
CAGR of 29.0% from 2020 to 2024, when spending will hit ■ A sudden and massive drop in foot traffic at brick-
$52.63 billion. and-mortar locations. This development gave retailers
an impetus to make up for lost revenues with high-
margin operations such as retail media.
US Ecommerce Channel Ad Spending, 2020-2026
billions, % change, and % of digital ad spending
$73.02
Key Players
$62.41
Ecommerce behemoth Amazon is the clear leader in
$52.63 the retail media space, with more than three-quarters of
53.8% $44.33 the US market throughout our forecast period. This year,
46.8%
$35.96
Amazon will be roughly 12 times larger in share than its
nearest competitor, Walmart.
$27.87
23.3%
$18.98 18.7% 18.6% 20.1%
29.0%
US Digital Retail Media Net Ad Revenue Share, by
14.5% 15.6% 16.6% 18.2% 17.0% Company, 2019-2024
12.4% 13.2%
% of digital retail media ad spending
2020 2021 2022 2023 2024 2025 2026
Ecommerce channel ad spending % change % of digital ad spending 76.8% 76.5% 77.8% 77.0% 75.9% 76.0%
Note: digital advertising that appears on websites or apps that are primarily engaged in
retail ecommerce; examples include advertising on Amazon, Walmart, and eBay; excludes
advertising on social networks or search engines; includes advertising that appears on
desktop/laptop computers as well as mobile phones, tablets, and other internet-connected
devices, and includes all the various formats of advertising on those platforms
Source: eMarketer, March 2022
276747 eMarketer | InsiderIntelligence.com

There’s a key difference between retail media and the

ecommerce channel. Retail media includes retailers’ off-site 6.2% 6.9% 8.0%
3.6% 4.9% 5.2%
ads served through their demand-side platforms (DSPs) or 2.3%
through other partners. On the other hand, the ecommerce 1.9% 1.8% 1.4% 1.3% 1.8% 1.1% 1.9% 1.0% 2.2% 0.9%
channel is limited to ads on the retailers’ online sites and 2019 2020 2021 2022 2023 2024
mobile apps. Amazon Walmart eBay Instacart

Note: includes advertising that appears on desktop/laptop computers as well as mobile

In 2022, the ecommerce channel will make up 88.1% phones, tablets, and other internet-connected devices, and includes all the various formats
of advertising on those platforms; net ad revenues after companies pay traffic acquisition
retail media ad spending. This share will tick downward costs (TAC) to partner sites
by 2.0 percentage points to 86.1% by the end of 2024 as Source: eMarketer, March 2022
274638 eMarketer | InsiderIntelligence.com
retailers continue to expand their ad suites across external
locations such as social networks and search engines.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 6
Amazon’s retail media network also leads by average Number of Retail Media Networks Currently Used
revenue per user (ARPU), at $111 in 2021, nearly 4 times by US Marketers, Sep 2021
higher than that of runner-up Instacart, according to an % of respondents
analysis of our forecast data and unique visitor tallies by
1 5%
Comscore Media Metrix Multi-Platform.
2 41%

3 40%
Average Revenue Per User (ARPU) for Select US
Retail Media Networks, 2021 4 10%

5+ 5%
Amazon $111
Note: n=151 brand or shopper marketing decision-makers; numbers may not add up to 100%
Instacart $29 due to rounding
Source: The Trade Desk, "B2B Shopper Marketing Study," Nov 10, 2021
$13 Walmart
271551 eMarketer | InsiderIntelligence.com

$4 eBay

$3 Etsy

Note: user data is based on Comscore's average monthly unique vistors for full-year 2021
Format and Channel Mix
Source: eMarketer and Comscore Media Metrix Multi-Platform, April 6, 2022
274607 eMarketer | InsiderIntelligence.com
In the US ecommerce channel, search eclipses display in
spend by roughly a 3-to-1 ratio. This underscores the tight
Despite the gulf between Amazon and its closest connection between search activity—whether on search
rivals, Walmart and Instacart are growing their US ad engines or retail properties—and the ads that are served
businesses faster than Amazon. This year, Walmart’s ad across retail media. Essentially, as long as people continue
revenues will increase by 58.0% and Instacart’s by 44.5%, to shop online in great numbers, advertisers will increase
compared with Amazon’s 30.0% growth, per our estimates. spending on those sites and apps, and retailers will reap
the benefits.
Further, Walmart and Instacart are making strategic moves
aimed at boosting their media networks.
US Ecommerce Channel Ad Spending, by Format,
2020-2026
■ Walmart is adding video and in-store formats to its
billions
Walmart Connect platform and recently revamped its
$73.02
cost-per-click auction system to give advertisers more
transparency into how it handles their bids. $62.41 $17.31

$52.63 $14.85
■ The retail powerhouse also struck partnerships with
ad tech firm The Trade Desk, to expand its advertising $44.33 $12.60
footprint, and with Roku, to direct viewers of shoppable $35.96 $10.72
ads to Walmart checkout pages. $27.87 $8.86
$55.72
$7.09 $47.56
$18.98 $40.03
■ Instacart appointed Fidji Simo, a former Facebook $33.61
$5.08
executive who helped build and scale the social media $27.10
$20.78
giant’s ad business, to the CEO post in 2021. $13.90

2020 2021 2022 2023 2024 2025 2026

Despite the proliferation of retail media networks, most
Ecommerce channel search ad spending
US marketers who used them opted for only two or Ecommerce channel display ad spending
three, according to September 2021 research from The Note: includes digital advertising that appears on websites or apps that are primarily
Trade Desk. Although the study didn’t name names, it’s likely engaged in retail ecommerce; examples include advertising on Amazon, Walmart, and eBay;
excludes advertising on social networks or search engines; numbers may not add up to total
that Amazon accounted for the relatively small number, due to rounding
Source: eMarketer, March 2022
as the company and its DSP generally cover a wide range 274012 eMarketer | InsiderIntelligence.com
of advertising needs and, thus, wield an outsize footprint
in retail media. That said, the small number of networks
used by marketers, combined with an explosion of new
networks, could lead to attrition or consolidation in the retail
media space.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 7
Search spending dominates, but CPG advertisers Importance of Select Attributes When Deciding
are buying a broad range of formats on retail media Which Retail Media Networks to Use for
networks, such as CTV, video, banner, and other display Advertising According to US Consumer Goods
ads. There was high usage of all those formats, including Advertisers, Nov 2021
off-site video and display/banner ads served through DSPs, scale of 1-5
among US consumer goods advertisers we surveyed in 1. Traffic scale (reaching a large enough audience) 4.35
November 2021 for our “Retail Media Networks Perception 2. Traffic quality (reaching the right audience) 4.32

Benchmark 2022” report. 3. Audience targeting capabilities (audience attributes/segmentation) 4.28

4. Advertising relevance 4.27
5. First-party consumer insights data (audience, advertising, category, 4.24
Ad Formats That US Consumer Goods Advertisers and shopper insights to inform marketing tactics and strategy)

Have Bought via Retail Media Networks, Nov 2021 6. Access to in-store/omnichannel purchase data 4.24

% of respondents 7. Return on ad spending (ROAS) 4.23

8. Reporting metrics and key performance indicators (KPIs); including 4.22
On-site search ads 67% breadth/depth of measurements, customizable dashboards, ease of
monitoring, etc.
On-site display/banner ads 66%
9. Platform ease of use (e.g., self-serve capability, etc.) 4.15
Connected TV (CTV) video ads 65% 10. Closed-loop sales attribution 4.06

On-site video ads 63% 11. Variety of available ad formats (e.g., sponsored products, display, 3.98
video connected TV (CTV), in-store media)
Off-site (via demand-side provider) video ads 59% 12. Advertising load (number of ad impressions consumers are exposed 3.90
to per page or search result)
In-store display ads 54%
13. Off-site targeting capability (via third-party publishers) 3.81
Off-site (via demand-side provider) display/banner ads 54% Note: respondents were asked to rate 13 different attributes on a 5-point scale according to
their importance in deciding which retail media networks to use for advertising, with
In-store video ads 46% 5="extremely important"
Source: Insider Intelligence, "Retail Media Networks Perception Benchmark 2022," March
1% Other 2022
272727 InsiderIntelligence.com
4% None of the above

Note: in the past 12 months

Ease-of-use features like self-service capabilities weren’t
Source: Insider Intelligence, "Retail Media Networks Perception Benchmark 2022," March among the most important attributes in our research.
2022
272729 InsiderIntelligence.com However, a September 2021 Merkle study found that 80%
of US CPG advertisers engaged with retail media networks
exclusively through self-serve interfaces.
Features
Attributes that were most important to the advertisers US CPG Advertisers Who Use the Self-Service
we surveyed indicate why Amazon and eBay are
Tools Provided by Retail Media Networks, Sep 2021
% of respondents
compelling options. On a 5-point scale, where lower values
No, use their managed service offering
meant lower importance, respondents ranked traffic scale Yes, agency uses 11%
self-service tools
highest (4.35), closely followed by traffic quality (4.32) 9%
and audience targeting capabilities (4.28). Our benchmark
study found that Amazon led in traffic scale, while eBay led
in traffic quality and overall targeting and measurement.
On the whole, eBay took the top honors, with Amazon
close behind.

Yes, exclusively engage

through self-service tools
80%

Source: Merkle, "The Evolution of Retail Media Networks" conducted by Ugam, Oct 11, 2021
270404 eMarketer | InsiderIntelligence.com

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 8
 How Could Market Conditions Supply Chain Disruptions
Affect Retail Media Networks? As noted earlier, we made a slight downward adjustment
in our US retail media spending forecast partly in response
Macroeconomic conditions have been exceptionally to supply chain issues, which came to a head in late 2021
volatile in 2021 and 2022 so far, with high inflation, and have continued since. While the haircut was less than 2
interest rate spikes, supply chain disruptions, stock percentage points for digital ad spending share in 2023—
the last year covered by both our previous and current
market declines, privacy changes, and global conflict
forecasts—the reduction highlights the risk for ad markets in
among the factors injecting anxiety into industries
general, and for retail media networks specifically.
including retail, media, and advertising.
The pandemic has exacerbated supply chain issues.
The extent to which these turbulent times could hamper As new COVID-19 outbreaks continue to cause factory
retail media ad spending is an open question, but in general shutdowns in China, major US retailers that depend on
retail media seems more resistant to the pressures noted Chinese imports are feeling the pinch. Limited inventory on
above than other forms of ad spending are. store shelves trickles down in the form of reductions in ad
network inventory.
For more on how market conditions are affecting digital
advertising, retail and ecommerce, and financial services, see
Another effect of supply chain disruptions on ad
our May 2022 report “The Era of Uncertainty: 12 Analysts spending is that marketers have paused or pulled
Tackle Client Questions on Crashing Tech, Broken Supply campaigns in response. According to the Advertiser
Chains, War, and Inflation.” Perceptions survey, 47% of US advertisers cut back on
CTV, 44% on digital video, and 42% on linear TV for this
reason. While this isn’t the kind of data ad buyers or sellers
Inflation like to see, it’s important to note that the impact is more
likely to be felt with brand-oriented ads, as opposed to the
In the US, inflation has been running at the highest level in performance-focused ones that prevail on retail properties.
more than 40 years, and the latest government data is not
encouraging. The US Bureau of Labor Statistics reported
that in June 2022, the consumer price index had risen 9.1%
over the previous 12 months.
Stock Market Tumble
In H1 2022, the S&P 500 posted a decline of more than
As of April 2022, 38% of US advertisers said they had 20%—its worst performance since H1 1970. At the same
paused or pulled their CTV budgets due to rising inflation time, the tech-heavy Nasdaq composite was down more
rates, according to Advertiser Perceptions research. than 30% from its all-time high on November 19, 2021.

Although these findings don’t bode well for ad spending, The Nasdaq, in particular, is home to many of the companies
the impact will most likely be felt higher in the funnel, as the that form the backbones of the digital advertising, media,
Advertiser Perceptions data suggests. With the bulk of retail and retail economies. Alphabet, Amazon, Apple, Meta, and
media spending going to search, it’s unlikely that retailers’ ad Netflix posted huge losses in H1 2022. Other retail stocks
networks will suffer from inflation unless rates continue to including Costco Wholesale, eBay, Target, The Home Depot,
rise or stay high for an extended period. and Walmart were also down significantly.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 9
Fortunately, market volatility on its own does not While the goal of raising interest rates is to tamp down
presage bad tidings for retail media networks. Yes, it’s inflation, the reality for most consumers is this: Their cost of
alarming for any company to experience a precipitous drop in living has increased faster than at any time since the early
its valuation, especially amid concerns about the direction of 1980s, and now their cost of borrowing—which had been
the economy. However, retailers view their media operations historically low for years—is becoming a detrimental factor in
as a source of high-margin revenues, so they are unlikely to decisions such as buying a home or car.
pump the brakes on their ad networks. In fact, the past year
has seen a proliferation of new networks and partnerships For companies, rising interest rates can stifle acquisitions,
(see the section on retail media innovations below). expansion plans, hiring, and other investments, but at this
point we don’t anticipate any impact spilling over into retail
media ad spending.
Global Conflict
The Russia-Ukraine war has hurt business for companies
The ‘R’ Word
that operate in the region. So far, the resulting economic
fallout—mostly in the form of higher energy prices and If the economy slips into a recession, many of the factors
supply chain chaos—has worsened market conditions not described above—depressed consumer spending, a
just in Central and Eastern Europe, but in other economies pullback of corporate investments, and reduced ad
including the US. outlays—could rear their heads again, as they did during the
Great Recession of late 2000s and the early stages of the
Because of the fluidity of the conflict, we have issued two ad pandemic in 2020.
spending forecasts for Russia and for Central and Eastern
Europe more broadly, based on moderate and severe Wall Street analysts and CEOs have been all over the map in
scenarios. In both scenarios, our outlook is significantly their assessments of the health of the economy. Some think
lower than it was in August 2021, particularly for Russia, and a recession in 2023 is only a slim possibility, while others
this is a direct result of the war. regard it as a near certainty. But most of the analysts on the
bearish side don’t expect a particularly deep or prolonged
However, barring more direct effects on US companies that recession. That’s good news for retailers and marketers.
do business in that region, we don’t expect the war to have a
meaningful impact on US retail media networks, or on US ad
spending in general. Retail Ecommerce Spending
The most reliable indicator of the health of retail media
networks is retail ecommerce spending, since the two go
Rising Interest Rates hand in hand: People who shop and purchase online are a
In late July 2022, the Federal Reserve raised US interest captive audience for brand marketers trying to reach them
rates by 75 basis points, bringing the combined increases closest to the point-of-sale. Fortunately for the retailers with
during the calendar year to 225 basis points. The hike media networks and the advertisers that support them, US
followed another increase in June, also of 75 basis points, retail ecommerce sales are thriving.
which at the time was the largest since 1994. The Fed has
floated the possibility of another increase when it next The US volume of goods and services ordered online
convenes in September 2022. will surpass $1 trillion this year. By the end of 2026, the
total will reach $1.672 trillion, which represents a CAGR of
12.3% during that period. Moreover, every product category
we track—including apparel and accessories, computer and
consumer electronics, and furniture and home furnishings—
will be on a solid growth path during our forecast horizon.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 10
 For more on the effect of market turbulence on retail and
ecommerce, see our June 2022 article “Answers to 5 of your
most pressing questions about retail and ecommerce amid
economic uncertainty.”

A Note of Caution
Some of the factors cited earlier have the potential to
compound one other. For example, several retailers including
Target, Walmart, Gap, Abercrombie & Fitch, and American
Eagle Outfitters have found themselves with excess
inventory as a result of post-pandemic shifts in consumer
behavior, decreased discretionary spending as a result of
inflation, and interruptions in their supply chains. Target
notably warned investors in June 2022 that its profits would
take a hit because it needed to take aggressive steps to
clear out unwanted inventory.

These developments don’t necessarily play into retail media

spending—and could, in fact, increase ad expenditures by
marketers looking to move inventory quickly. However, these
negative factors acting together have the potential to create
a multiplying effect. Retailers and marketers should tread
carefully in an uncertain macroeconomic environment.

Innovations in an Ever-Evolving
Retail Media Market
The pace of innovation in the retail media space points
to a dynamic market that should continue to create
business opportunities for retailers, marketers, and
their ad tech partners.

Several developments have come to light in the past

few months:

■ In March, Walmart announced it was adding

The retail ecommerce forecast was published in June 2022 formats to its retail media offering, including video
and takes into consideration the market risks discussed and in-store ads, and in July, it introduced a second-
above. While conditions could worsen, retail media spending price auction model in response to advertiser
would likely be among the last dominoes to fall in the demand. In this model, a buyer that submits a winning
advertising ecosystem. For now, and at least until our next bid pays only 1 cent more than the next highest bid,
forecast update in late 2022, we see favorable conditions regardless of the amount the winner actually bid. This
for retail media ad spending to continue on a robust prevents buyers from overpaying for inventory and
growth path. increases their return on ad spend.

■ Also in March, Kroger Precision Marketing—the grocer’s

in-house media network—opened its ad inventory to
third-party platforms.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 11
■ In its Q1 2022 earnings release, Amazon reported ■ Contrary to popular perception, retail media is more
that its advertising services revenues grew by than a CPG phenomenon. Other verticals planning to
23.4% year over year, compared with 7.3% for its increase investments in retail ads include jewelry and
top-line revenues. In a quarter in which the retail luxury, consumer electronics, and beauty.
giant posted a rare net loss, these data points signaled
the increasing importance of advertising in its famous
■ More than 80% of retail media dollars are incremental.
flywheel. While Amazon is still a distant third in the US According to McKinsey, this punctures the myth that
digital ad triopoly, its ad business is growing faster than ad spend in this channel comes mainly from dollars
those of Google and Meta. retailers already earn.

■ In other Amazon news, the retailer is widely

■ US advertisers were equally interested in performance
expected to hold a second Prime Day event in marketing and brand-building when it came to their
2022, during Q4. This alone is likely to spur advertising retail media network investments.
activity both on Amazon and among its competitors, ■ Retail media networks’ self-serve capabilities, while
as they scramble to keep pace with the ecommerce important, didn’t move the needle for respondents.
behemoth during the busiest shopping season of Although McKinsey didn’t recommend getting rid of
the year. self-serve dashboards, it indicated that they don’t offer
■ In May, cosmetics retailer Ulta Beauty debuted its retailers a competitive advantage.
retail media network, UB Media. Like other retailers, H2 2022 is likely to usher in more evolutionary changes to
Ulta Beauty highlighted the need to leverage its first- the US retail media landscape. On September 15, Amazon
party data to reach its audiences. will start streaming “Thursday Night Football” under an
■ That month, Instacart enhanced its network with exclusive license with the NFL. This franchise will raise
shoppable video ads and shoppable display ads. Amazon’s profile in the lucrative sports streaming market
Instacart, which made the top five in our 2022 retail and add premium CTV inventory to its media network.
media network benchmark study, said Dove, Mondelez
International, PepsiCo, and S.Pellegrino were among Later in the year, Instacart is likely to complete its initial
the first brands to use the new formats. public offering, for which it filed in May 2022. The company
is attempting to go public at a tumultuous time, but it’s
■ In June, Albertsons Media Collective, the grocer’s betting that investors will back its expansive vision of the
eponymous retail media arm, announced a future, which includes growing its ad business.
partnership with The Trade Desk. The alliance
promises to bring audience verification and
measurement solutions to marketers and agencies
including PepsiCo, Unilever, and GroupM.

■ Nonretail players including Marriott International

and Universal Music Group have also launched
media networks. While these don’t factor into our
forecast, which is limited to websites or apps engaged
mainly in retail ecommerce, the rush to monetize
through advertising is extending to companies that sell
goods or services directly to consumers.

A March 2022 study by McKinsey & Company noted several

trends that highlight the business opportunities that abound
in the retail media space. The study found the following:

■ 96% of US advertisers surveyed have used at least one

retail media network other than Amazon.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 12
 3 critical steps to building a retail media network

This sponsored article was contributed by LiveRamp.

Vihan Sharma Building the infrastructure for an RMN is an

Executive Vice President, investment. However, it’s one that will deliver
Global Revenue, consistent revenues year over year, further engage
shoppers, and improve your competitive advantage.
LiveRamp
Step 3: Perform a data and technical audit
If you’re reading this report, you already know Marketers are sitting on great data assets, but they may
that retail media networks (RMNs) are on the rise. not be valuable and actionable out of the gate. This next
Retailers are expanding their sphere of influence, step requires true objectivity about your organization’s
diversifying revenue streams, and transforming current assets and capabilities. Does your company
the ability to reach new and valuable audiences. have enough transactional data identified, and is it
Here are three critical steps you’ll need for a ready for a potential partner to leverage for one or more
successful RMN: campaigns? If not, your company will need to reconcile
data across silos and build a first-party graph through
Step 1: Define success customer relationship management, transactions,
What are your company’s strategic priorities for and ecommerce connections to bring value to your
developing a retail media business? The best place customers and suppliers. Great data is needed when
to start is to consider building your media services, building a retail media business, but the data must be
products, and go-to-market strategy based on what is scalable and actionable.
most important to your business.
When building an advertising business and performing
Are you trying to drive gross merchandise value, create a technical audit, find technology partners who
new revenue streams, or provide additional value to aren’t redundant and can navigate the intricacies of
the consumer through better discounts? Depending consumer data. They should be partners who not only
on your resourcing, road map, program limitations, understand that privacy is not one size fits all, but
business objectives, or partner targets, success are also innovating and pushing the industry forward.
metrics will vary and can be a key differentiator when At a foundational level, any partner should be able
you are ready to go to market. With the right tech to engage your various teams to explain how their
and people investment, retail media can become a technology protects consumer privacy while also
standalone profit center. preserving data utility and allowing for configurable
privacy controls.
Step 2: Invest strategically
Finally, think strategically for the long term. Retailers
Success doesn’t happen overnight, but retailers can have a variety of new tools at their disposal to improve
start monetizing one channel or media placement at a profitability and customer engagement that drives
time. In many cases, monetization of placements like loyalty and overall spend. With a focus on building
end-caps and in-store signage is already happening. infrastructure that offers more control over the
With the rise in spending across digital channels, customer experience and better visibility into customer
retailers have new opportunities to deliver more actions and trends, retailers can develop a greater
relevant ads to shopper segments by leveraging first- competitive advantage.
party data in partnership with their suppliers.
For more information on how LiveRamp can help you
Marketers cannot do it alone. Retail companies will need on your retail media journey, visit LiveRamp.com/retail.
to identify the required skill sets and determine if the
right expertise exists within the organization—across
sales, operations, technology, media, creative, and data
analytics—or if these skill sets need to be hired.

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 13
Ready to establish new
high-margin revenue streams?

Achieve all this and

more from your retail
media network:
Deeper shopper intelligence

Strengthened customer loyalty

Measurement of lifetime value

Collaboration with CPG partners

Find out how at LiveRamp.com/retail

Editorial and
Production Contributors
Anam Baig Director, Report Editing
Rahul Chadha Director, Report Editing
Jason Clinkscales Senior Report Editor
Matthew Corkins Copy Editor
Justin DeVoursney Graphic Designer
Joanne DiCamillo Senior Production Artist
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Katie Hamblin Director, Charts
Dana Hill Director, Production
Erika Huber Line Editor
Ann Marie Kerwin Vice President, Content
Kyndall Krist Copy Editor
Na Li Director, Primary Research
Penelope Lin Senior Copy Editor
Reuben Loewy Director, Report Editing
Jennifer Merritt Executive Editor
Stephanie Meyer Product Specialist
Heather Price Senior Director, Managing Editor
Erika Skorstad Copy Editor
Rachel Tatarek Senior Copy Editor
Amanda Woodman Copy Editor
Julia Woolever Senior Report Editor
Ali Young Senior Copy Editor

PRESENTED BY: Copyright © 2022, Insider Intelligence Inc. All rights reserved. Page 15
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