Retail Media Spending To Hit $101 Billion Globally This Year
Global retail media spending is projected to reach $101 billion this year, which represents an increase of 15% over 2021, according to findings from WPP’s GroupM.
Also, the report revealed that retail media represents nearly 10% of global ad spending.
“We expect retail media to grow 60% by 2027,” Kate Scott-Dawkins, global director of business intelligence at GroupM said during a press briefing before the release of the report.
The agency also predicted that the category, in which retailers perform media duties for advertisers, will exceed $160 billion annually within five years.
“We do think there is a continued opportunity, especially in the U.S. and other markets,” said Scott-Dawkins. Retail media ad revenue represented 18% of global digital advertising revenue last year, and 11% of total global ad revenue, GroupM found.
Adweek reported that indeed, several retailers have joined the trend of monetizing customer first-party data to create compelling opportunities for brands. Late last month Dick’s Sporting Goods rolled out Dick’s Media, joining other chains such as Lowe’s, Home Depot, Walmart, and Macy’s in creating additional revenue streams. Today, Best Buy announced plans to expand its retail media network to run ads on third-party websites.
Experts have said that retail media may get a larger slice of brand budgets amid a slowing economy since the medium has better targeting than other forms of advertising. Dick’s Chief Marketing Officer Ed Plummer called the channel “efficient” in allowing advertisers to reach their target customers.
However, while many retailers are promoting their media networks as new revenue streams, most consumer-packaged goods brands are not so enthusiastic, Scott-Dawkins pointed out. She noted that one risk is budget saturation for CPG brands.
“It remains to be seen whether and how much of [CPG brands’] budgets move into that space,” she said.
GroupM’s report also cited that online sales in the U.S. are expected to increase this year by 25%. However, some markets are already seeing slowing sales—in China, for example, GroupM predicts that e-commerce will increase just 5.6% compared to last year’s 10% gain.