The next frontier for the ad market isn\u2019t on TV \u2014 it\u2019s at screens near points of sale.<\/p>\n
Television had long been the key target for advertisers, until tech companies such as\u00a0Alphabet\u00a0and\u00a0Meta-owned platforms like Facebook began to gobble up market share. While ad dollars are rapidly shifting from traditional TV to streaming, retail and consumer product companies are now taking up a significant part of the mix.<\/p>\n
The so-called retail media networks \u2014 the advertising publishing platforms \u2014 of e-commerce, retail and consumer companies like\u00a0Amazon,\u00a0Walmart\u00a0and\u00a0Kroger\u00a0are attracting billions of dollars in advertising, according to data from eMarketer and GroupM, the media investment arm of WPP, the world\u2019s biggest advertising group.<\/p>\n
Global retail media ad spending is expected to more than double from $114.18 billion in 2023 to $233.89 billion in 2027, according to eMarketer. Retail media is expected to represent a larger percentage of digital advertising spending, which has begun to eclipse traditional media spending, growing from 18.9% of that segment in 2023 to 25.7% in 2027, according to eMarketer.<\/p>\n
\u201cWhat we hear from brands most directly is they no longer wake up with a recipe to buy X amount of TV, X amount of social, X amount of digital. They wake up every day trying to buy growth, trying to buy outcomes for their business,\u201d said Sean McCaffrey, president and CEO of GSTV, an on-the-go media network with over 29,000 screens at refueling points tied to convenience retail stores.<\/p>\n
GSTV screens reach 115 million viewers per month across 49 states.<\/p>\n
Brands are \u201cmore open-minded as to where they can find those audiences,\u201d McCaffrey said.<\/p>\n
\u201cIt\u2019s the new TV for mass reach advertising,\u201d said Mark Boidman, head of media and entertainment investment banking at Solomon Partners. \u201cIf you want to reach someone fast, it\u2019s best to get them in a store or on your app. \u2026 It\u2019s a 360-degree approach.\u201d<\/p>\n
The kind of advertising purchased through retail media networks is often found on in-store displays and screens, websites, mobile apps, streaming services, smart TVs and social media. Not only is it fertile ground for an advertiser to get their offerings in front of consumers looking to spend, it comes with a lot of first-party data.<\/p>\n
The amount of data that retailers have on customers \u2014 from one-time buyers to loyalists \u2014 is extremely valuable to advertisers who want to optimize their exposure.<\/p>\n
\u201cIf [brands] advertise with a digital ad, for example, and a customer transacts a week later in a store or club, we can connect that up for them and let them know that the ad really worked,\u201d Walmart CEO Doug McMillon\u00a0told\u00a0CNBC earlier this year. \u201cThat\u2019s the differentiating advantage that we\u2019ve got.\u201d<\/p>\n
Walmart has been a particularly\u00a0big player. While it\u2019s still a new frontier for the retailer, advertising has\u00a0propelled\u00a0profits at the giant retailer in recent quarters. The company also recently\u00a0agreed to\u00a0buy TV maker Vizio in a bid to further boost its ad business.<\/p>\n
Of the companies eMarketer tracks, Amazon was\u00a0considered\u00a0the biggest retail media network in the U.S., with a roughly 75% share of retail media ad revenue. Other top networks by revenue include Walmart, Instacart,\u00a0eBay\u00a0and\u00a0Etsy.<\/p>\n
The shift toward retail media comes as advertisers are faced with tech privacy changes that has led to a pullback in the collection of data.<\/p>\n
Earlier this year, Google began its revamp of how it and other companies track users online, namely the use of cookies, which keep tabs on the activity of internet users so that advertisers can target them with relevant ads.<\/p>\n
In January, Google began to restrict cookies for 1% of its Chrome browser users, with the goal of completely removing third-party cookies by the third quarter of this year. Advertisers have been grappling with how to make the transition.<\/p>\n
Advertising and media executives note that retail media networks now dominate conversations at conferences and other gatherings, such as the Cannes Lions advertising festival. It\u2019s often a highlight on earnings calls, too.<\/p>\n
\u2033[Retail media networks] have that balance with targeting and privacy and compliance. I think that\u2019s where the money really starts shifting,\u201d Tim Hurd, vice president of media activation at Goodway Group. \u201cI think that\u2019s key. These retailers have that kind of data\u201d\u00a0<\/p>\n
The rise of retail media ads comes against a backdrop of major shifts in the media landscape. Pay-TV customer numbers and traditional TV viewership (outside of sports) continue to decline as more viewers move toward streaming.<\/p>\n
And although ad buying in digital and streaming is\u00a0rebounding, traditional TV still lags. That much\u00a0was clear\u00a0in the first-quarter earnings reports of media giants like\u00a0Comcast\u2019s\u00a0NBCUniversal and\u00a0Warner Bros. Discovery.<\/p>\n
Disney\u00a0saw\u00a0a first-quarter decline in ad revenue for its traditional cable networks and Hulu, despite an increase at cable crown jewel ESPN; Warner Bros. Discovery\u00a0reported\u00a0a drop in ad revenue;\u00a0Paramount Global\u00a0got an\u00a0expected boost\u00a0from airing the Super Bowl; and NBCUniversal\u2019s domestic ad revenue was\u00a0flat. Streaming ad revenue for the legacy media giants, however, showed growth.<\/p>\n
Outside of tentpole moments on TV, such as the Super Bowl and\u00a0other live sports, advertisers are now strategizing on multiple fronts and divvying up spending across TV, social media, e-commerce and digital, said Goodway Group\u2019s Hurd.<\/p>\n
\u201cLinear TV advertising is still declining,\u201d said Kate Scott-Dawkins, GroupM\u2019s global president of business intelligence, noting the last decade has seen ad revenue shift from print and radio to TV and now toward digital.<\/p>\n
Retail media revenue grew from less than $1 billion in the U.S. a decade ago to a projected $42 billion this year \u2014 or $129.4 billion globally, said Scott-Dawkins, citing GroupM\u2019s data, noting that brand advertising budgets may not directly shift from traditional TV into on-site retail advertising.<\/p>\n
She added traditional TV revenue may move to smart TVs, however, informed by the data on customer spending habits that retailers can provide.<\/p>\n
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.<\/em><\/p>\n<\/p>\n The next frontier for the ad market isn\u2019t on TV \u2014 it\u2019s at screens near points of sale. Television had long been the key target for advertisers, until tech companies such as\u00a0Alphabet\u00a0and\u00a0Meta-owned platforms like Facebook began to gobble up market share. While ad dollars are rapidly shifting from traditional TV to streaming, retail and consumer […]<\/p>\n","protected":false},"author":0,"featured_media":4882,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-4881","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/4881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=4881"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/4881\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/4882"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=4881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=4881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=4881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}