GroupM’s latest ecommerce report predicts that retail media globally and in the U.S. will be the fastest growing digital ad channels over the next five years.
Global media retail revenue totaled $88 billion last year and is expected to reach $101 billion this year. According to the GroupM assessment, that amounts to 18% of global digital advertising and 11% of total advertising.
And growth over the next five years (through 2027) is forecast to be 60%. Per the report, “this exceeds the growth rate expected for all digital advertising, meaning that retail media will take an increasing share of digital ad revenue over the next five years.”
GroupM cited several growth drivers, including the growth of brands utilizing retail channels for their audiences that aren’t directly tied to those channels with store inventory. Also, marketers will shift more dollars to retail media from other channels and budgets as priorities shift. Growth will also occur as marketers embrace new ways to optimize retail media.
“Retail media, considered a test and learn environment not so long ago, has more recently become a growing line item on many marketer budgets,” the report states. “There remain significant disparities in capability depth, data quality and partnerships across global markets and within retail channels, but the promise of retailer first-party data, albeit residing in yet another walled garden, is tantalizing — enabling purchase-based targeting and closed loop measurement.”
GroupM defines retail media revenue as “any advertising revenue accruing to a retail-based company, including marketplaces.” Sources excluded from the tally to avoid double counting include software providers and ad-tech firms like Shopify and Criteo. Search and social commerce revenue is also excluded.
In the U.S. the report projects that retail media will reach $33 billion this year after rising “from next to nothing” several years ago. As with the case globally, growth is expected to “generally outpace all other major forms of digital media in the years ahead.”
The report estimates that global ecommerce sales this year will be $5.4 trillion or about 19% of total retail sales ($28.3 trillion). In the U.S. the ecommerce market is forecast to grow 25% this year to about $1.2 trillion, accounting for 17% of total retail ($7.2 trillion).
Globally, China accounts for 3 of the top ecommerce companies including top-ranked Alibaba, while Amazon is ranked number two overall and number one in North America. Rounding out the top-5 NA ecommerce firms are Ebay, Walmart, Instacart and The Home Depot.
The report was penned by Kate Scott-Dawkins, GroupM’s global director, business intelligence. Brian Wieser, global president, business intelligence and other BI team members contributed.