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Retail media networks that generate the most advertising revenue Share via

Retail media or advertisements placed on a retailer’s website to influence the customers buying decision at the point of purchase have seen their adoption going through the roof amidst the pandemic as in-store interactions have seen a hit in these times, and brands want to reach out their consumers wherever they are. Moreover, retail media creates an additional revenue stream for retailers in the already thin-margin e-commerce business. According to global management consulting firm BCG, big retailers are already racing towards a $100 billion high-margin annual revenue prize in retail media, as it helps them make better use of their customer’s data to help create better targeting and content. Some retailers have taken to advertising in a big way riding on the humungous amount of customer data they have generated over the years, with the most notable being Amazon. Let us look at the five leading retail media networks and their plans for the future.

Amazon

E-commerce giant Amazon revealed that its advertising business surpassed the $31 billion revenue mark in 2021, making it the third-biggest digital advertising company just behind technology behemoths Google and Facebook. Precisely at $31.2 billion in revenues in 2021, Amazon’s retail media business, Amazon Advertising, is much ahead of the advertising businesses of Microsoft, Snap Inc, and Pinterest. Moreover, according to media reports, the e-commerce company’s ad business has become more significant than its subscription services and generates twice as much revenue as its physical stores. Amazon’s advertising business touched the $10 billion revenue mark for the first time in 2019, and within the pandemic years, the business scaled up to more than three times.

Walmart

While Amazon has, without a doubt, the biggest retail media network, other big box retailers are aggressively ramping up their digital advertising investments to leverage the benefits of the large-scale customer data they have accumulated over the years. Walmart, the biggest retail company on the planet, has last year generated revenues of over $2 billion from advertising as the company expanded its marketing technology stack. The company disclosed this information in its earnings announcement. According to the company’s top executives, they see a lot of growth potential in Walmart Connect, their advertising platform, and expect it to break into the top 10 advertising platforms within the next few years.

eBay

Another e-commerce giant eBay is planning to double its revenue from advertising to $2 billion by 2025, the company said on its investor day. The e-commerce marketplace touched $1 billion in advertising revenue in 2021 and hoped the digital advertising business could make up to 3 percent of all transactions on its platform. eBay’s Promoted Listings Advanced, as its advertising business is called, allows merchants on the platform to exercise more control over how their ads are targeted.

Kroger

Following in the footsteps of Amazon and Walmart, one of the largest grocery retailers in the US, Krogers, launched its retail media business in 2021 to ride on the digital advertising wave. Kroger Precision Marketing enables advertisers to reach consumers by applying Kroger audience data to programmatic campaigns through their preferred ad-buying platform. In an interview with Drum, the senior VP at Kroger Precision Marketing said that the retailer started this business because they knew through retail media they had an opportunity to help brand advertising become more effective and ultimately benefit consumers. However, unlike Amazon and Walmart, which recently started announcing their revenues from the ad business, Kroger does not officially share those numbers.

Walgreens

Walgreens, an integrated healthcare and pharmacy retailer serving millions of customers daily, launched its retail media network in 2020, a late entry considering how other retailers jumped into the bandwagon much earlier. The retailer’s advertising arm, popularly known as Walgreens Advertising Group, announced at the beginning of 2022 that it would be launching new self-serve programmatic and clean-room solutions allowing brand advertisers to run campaigns more openly on their own terms. The new self-serve programmatic solution, the company said,  will offer the ability to target consumers by applying audiences based on Walgreen’s first-party data to campaigns run on each advertiser’s preferred demand-side platform (DSP). According to an official statement by the retailer, with the new services, brand advertisers can maximize the reach and scale of campaigns across all digital channels. With more than 95 million myWalgreens members and Walgreens roughly 1 billion touchpoints daily with customers, the service can target purchasers of more than 70 key categories and advanced customer targets.

There is no doubt that retail media networks will be the next big thing in digital marketing, and with the pace at which big retail companies are creating their media businesses on the back of robust first-party data, brands will have to take this advertising route. But for brands to get the maximum benefits from every dollar spent on the retail media network, they have to be clear about their goals and then identify the most suitable retail partner that ticks the most boxes.

Ritelo, the retail media platform by ArabyAds, helps build scalable brand-funded media businesses for retailers, where they can utilize the power of Ritelo’s DSP to generate revenue from offsite outreach across multiple locations and channels.

 

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