Digital retail media refers to advertising featured on a retail website, app, or marketplace. This type of promotion has become an essential tool for brands amid the rapid rise of e-commerce. The United States is home to many of the world’s most valuable retailers, such as Amazon, Walmart, and Target, who quickly noticed the potential advertising on their online platforms. In 2023, digital retail media advertising spending in the U.S was estimated at 46 billion U.S. dollars. By 2027, this sum is expected to more than double.
Retailers hear the sweet sound of new money
Amazon is not only the
largest online retailer in the United States. It also visibly dominates the U.S. retail media landscape. In 2022, it commanded over three-quarters of the
U.S. digital retail media ad spending. This share is not projected to contract until at least 2026. However, other players such as Walmart, Instacart, and Uber, to name just a few, are building their own ad platforms and fighting Amazon for every retail media dollar. Providing such ad services appears especially attractive to online retailers in times of economic uncertainty as it offers an additional revenue stream. On top, they can get to know their customer base better by collecting and analyzing data necessary for advertisers to use their ad platforms effectively.
Consumers finally see ads worth their while
Consumer data is the key to successful advertising on online retail platforms. Well-targeted ads provide consumers with offers and promotions they are more likely to perceive as relevant. This may be why online shoppers generally do not oppose such ads. A survey showed that three-quarters of consumers found it acceptable for advertisers to
target them using their purchase history. Additionally, retailer websites are not among media most commonly perceived as serving
irrelevant advertising. This suggests that digital retail media ads are more likely to be perceived as a helpful addition to the online shopping process rather than an annoyance.
Advertisers get better access to consumers
In 2022, only roughly a quarter of
U.S. advertisers used digital retail media to promote their products. However, another 36 percent was considering it, which shows where the staggering projected revenue growth will originate. What makes the medium attractive is, first and foremost, access to in-depth transaction-based consumer data, which is very granular and thus allows for precise ad targeting. Moreover, retail media ads meet consumers at the point of purchase, which increases the likelihood of success. Transaction data retailers collect can also be used to measure sales uplift directly.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
