Executive Summary

Retailers have vast amounts of customer data that’s highly valuable to advertisers, since that data can help target ads based on a shopper’s likelihood to make a purchase and measure results in a closed loop. We expect advertisers to continue increasing their investments in retail media to access these benefits.

How big is retail media advertising in the US?

Our latest forecast for ecommerce channel advertising—a close proxy for retail media advertising—projects that spending will increase by 27.8% year over year to reach $23.92 billion in 2021. Expect this forecast to be revised upward in the fall as a result of Amazon and Walmart posting much higher growth for their respective ad businesses in recent earnings reports.

What’s driving the trend of retailers getting into the digital advertising business?

Brand dollars are gravitating toward retailers for their valuable first-party consumer purchase data, ability to target ads close to the point of purchase, and closed-loop measurement capabilities. Retailers are motivated to enter the digital ad business because this incremental revenue stream comes with attractive margins.

Which retailers are the biggest players in retail media?

Amazon dominates retail media, with an estimated 76.2% of US ecommerce channel ad spending in 2021. Digital marketplaces like eBay, Etsy, and Instacart have flourishing retail media businesses, while brick-and-mortar leaders like Walmart, Target, The Home Depot, Best Buy, Walgreens, and CVS are also advancing their efforts. Recent entrants include DoorDash, Gopuff, and Uber.

How is retail media advertising evolving?

Historically, retail media has been driven by bottom-funnel sponsored search ads on retailers’ ecommerce websites. Recent emphasis on upper-funnel display and video ads, as well as the use of demand-side platforms (DSPs) to deliver ads across the open web, points to what’s ahead.

WHAT’S IN THIS REPORT? This report provides an overview of the fast-growing retail media advertising opportunity and key retailers driving the market.

KEY STAT: After almost 50% growth in ecommerce channel ad spending during 2020, advertisers will increase those allocations by another 27.8% this year. One in 8 digital ad dollars will go to advertising on ecommerce properties.