Welcome to the retail media boom. In the past 18 months, dozens of major retailers launched their own retail media networks while established players planned for expansion, self-service marketplaces, and in-house capabilities. And we don’t see this growth slowing anytime soon. In our just-published forecast, we estimate that retail media ad sales in the US alone will reach $40B (nearly hitting our global revenue prediction of $50B in 2022). And over the next four years, the market will more than double. As this happens:

  • The retailer pile-on will continue. With the threat of data deprecation looming (and impacting the performance of popular ad channels) we expect brands will increase their existing budgets and shift more budget from search and social media to retail media for better insights and performance. Amazon set a high bar for this market ($31.2 billion high in 2021) and retailers of all sizes are lining up to strike pay dirt with their first-party data, too.
  • Amazon’s share will shrink in the coming years, but not by much. This influx and expansion of individual retailer ad networks will reduce Amazon’s large share of this market by about 10% over the next two years. And some of these individual retailers will scale their ad businesses quite successfully. Walmart broke out its advertising revenue for the first time in 2021, clearing $2.1 billion worldwide.
  • Diversification of ad formats will be key to future growth. Today, onsite search represents 57% of retail media ad spend (excluding Amazon), and eclipsed once-dominant onsite display formats in 2020. Offsite ad buys represent a small proportion of revenue, but will drive incremental growth going forward, especially since offsite channels mitigate the risk of degrading the site experience quality with too many ads. We are already seeing retailers using their data to help brands target and measure ads via in-store (including in-store music), DOOH, social, mobile, CTV, and audio. Walgreens Advertising Group (WAG), for instance, can reach its 97+ million customers and patients across 20 different digital platforms.

Forrester clients can read and download the full report here. Stay tuned for more retail media content from us in 2022. We have a lot planned, including best practices for retailers building or expanding their own networks and guides for brands looking to optimize their media dollars across networks.



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