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How Will Retailer Media Networks Affect Publishers?

As much as retailers spend on print and digital advertising every year, they also compete with publishers for media dollars as they sell ad space on their ecommerce sites. The extra competition isn't exactly welcome, considering that print ad revenue has plunged in the past decade and the digital ad market is dominated by a handful of companies.
Amazon, Walmart, Target, Best Buy, Home Depot, Kroger, CVS Pharmacy and Walgreens are among the major retailers that spend heavily on media, but also sell ad space on their websites.

Because Home Depot, Walgreens and CVS started their media networks in the past nine months, their ad revenue is likely minimal.

However, Amazon is notable as the first retailer to build a digital ad business that may do something publisher haven't done: dent Google and Facebook's growth. The part of Amazon's business that mostly includes advertising revenue grew 52% to $21.5 billion last year, which was still a fraction of Google's $147 billion and Facebook's $84.2 billion.
A big portion of Amazon's ad revenue is estimated to come from search ads, which suggests that retail media networks may be a bigger threat to Google than to publishers that sell display advertising.

Because many people choose Amazon over Google as the first place to search for products to buy, the companies are competing more directly for search ad dollars.

Amazon’s share of the U.S. search ad market will grow from 13% in 2019 to 19% this year, mostly at the expense of Google, eMarketer forecast last month. The researcher also said Walmart's share of the search ad market will reach 1.1% this year, which is admittedly small, but likely to grow as the company continues to expand its ecommerce business.
The growth in search revenue suggests that advertisers see retailer media networks as more effective at reaching consumers in the lower part of the purchase funnel, or when they're most ready to shop.

Of course, publishers can also provide the immediacy of a transaction with display ads that are linked to an ecommerce site. That means retailers and direct-to-consumer brands will still want to place ads on publisher sites not only for awareness campaigns, but also to drive traffic to their sites.

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