LONDON, August 9, 2024: New research from Omdia points to retail media, which sees retailers place ads across their own and partners’ online properties, as a key growth driver for the advertising industry. Globally, retailers more than doubled their advertising revenues from 2019 to 2023, reaching $123bn amid a global e-commerce boom. This will grow to $293bn by 2029, when retail media will usurp traditional online paid search as the largest global online advertising segment.
The more mature Chinese retail media segment currently accounts for around half of global revenue, but this will fall to 40% as the global market proliferates. Amazon is a leading player in the market outside of China, accounting for nearly 70% of the rest of the world’s 2023 retail media advertising revenue. And, although its share will fall over the next five years as other retailers up their game in the space, an ad-supported Amazon Prime Video and other media strategies will strengthen the e-commerce giant’s competitive position.
Onsite search retail media advertising – i.e. ads shown on retailer-owned sites and apps – currently dominates retail media revenue. However, retailers are shifting attention to offsite formats, served on third-party sites and apps using retailers’ data, in their bid to maximize first-party data monetization as demand for inventory on their own sites saturates and advertisers seek alternative ways of tracking and targeting ads. As such, retail media growth will also provide significant revenue opportunities for other players across the technology, media, and telecoms (TMT) value chain. By 2029, Omdia estimates that over $75bn in annual revenue will be generated by non-retailers, e.g. media firms, ad tech vendors, and other intermediaries, from retail media operations – in addition to the $293bn made by retailers.
“Retail media will both grow faster and be bigger than almost all other ad segments over the next five years,” commented Matthew Bailey, Senior Principal Analyst at Omdia. “As retail media evolves and matures, it will provide retailers substantial opportunities to maximize profitability and monetize previously untapped data assets and platforms. And, crucially, it will also create new, additive revenue streams across the broader TMT ecosystem.”
