GroupM – Retail media taking a larger slice of advertising pie

Retail media will take an increasing share of digital advertising revenue over the next five years, according to analysis by GroupM.

Global advertising revenue for retail-based companies was $US88 billion in 2021 and will reach $US101 billion this year.

This amounts to 18% of global digital advertising and 11% of total advertising. As a percentage of global e-commerce, this amounts to 1.8%.

GroupM expects retail media advertising to increase roughly 60% by 2027, exceeding the growth rate expected for all digital advertising.

Local retail media plays in Australia include Woolworths and Coles. PwC in its latest media forecasts says up to $1.2 billion in revenue will enter the Australian advertising market via retailer media over the next five 

Kate Scott-Dawkins, the report’s author and GroupM’s global director of business intelligence, says retail media, considered a test and learn environment not so long ago, has more recently become a growing line item on many marketer budgets.

“There remain significant disparities in capability depth, data quality and partnerships across global markets and within retail channels, but the promise of retailer first-party data, albeit residing in yet another walled garden, is tantalising — enabling purchase-based targeting and closed loop measurement,” she says.

“Only some of the companies in our composite disclose advertising revenue, and of those that do, most only recently began disclosing a figure.

“We estimate Amazon as being at the far end of the spectrum when it comes to advertising revenue as a percentage of e-commerce GMV (gross merchandise value).

“While Amazon doesn’t disclose how much of their total advertising revenue comes from commerce-related activity (as compared to advertising revenue from sports programming, for example), we would characterise the vast majority of that revenue to be directly attributable to e-commerce or informed by the company’s first-party retail data, and equal to roughly 5% of e-commerce GMV.”

retail media forecasts sept 2022 groupm

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