M&M’s ads seen at gas pumps.
Courtesy: GSTV
The next frontier in the advertising market is not on television, but in stores and on mobile phones.
Television has long been a prime target for advertisers until tech companies like letter and YuanOwned platforms like Facebook are starting to eat away at market share. While ad revenue is rapidly shifting from traditional TV to streaming, retail and consumer goods companies now account for a significant portion of it.
So-called retail media networks, advertising distribution platforms for e-commerce, retail and consumer goods companies, e.g. Amazon, Walmart and hook up The ads are attracting billions of dollars in advertising investment, according to data from eMarketer and GroupM, the media investment arm of WPP, the world’s largest advertising group.
According to eMarketer, global retail media advertising spending is expected to more than double from US$114.18 billion in 2023 to US$233.89 billion in 2027. Retail media is expected to account for a larger share of digital ad spending and has begun to overtake traditional media spending, growing from 18.9% of the segment in 2023 to 25.7% in 2027, according to eMarketer.
“The most immediate thing we hear from brands is that they no longer wake up with a recipe for buying X amount of TV, X amount of social, X amount of digital. They’re waking up every day trying to buy growth, trying to buy results. .
GSTV screens reach a monthly audience of 115 million viewers across 49 states.
McCaffrey said brands are “being more open-minded about where they can find these audiences.”
“This is the new TV for mass advertising,” said Mark Boidman, head of media and entertainment investment banking at Salomon Partners. “If you want to contact someone quickly, it’s better to have them come into a store or through your app… It’s a 360-degree approach.”
Cookies to cart
Walmart is turning some 170,000 digital screens in its U.S. stores into advertising opportunities. For example, a company that produces snacks or beauty products can advertise on television channels in the electronics sector.
Walmart
Ads purchased through retail media networks typically appear on in-store monitors and screens, websites, mobile apps, streaming services, smart TVs and social media. Not only does it provide fertile ground for advertisers to get their products in front of consumers who want to consume them, but it also provides a wealth of first-party data.
The vast customer profiles that retailers have, from one-time buyers to loyal customers, are extremely valuable to advertisers who want to optimize exposure.
“For example, if (a brand) advertises through digital advertising and a customer makes a transaction a week later in a store or a club, we can connect them and let them know,” said Walmart CEO Doug McMillon. Advertising does work. told CNBC earlier this year. “That’s the differentiator we have.”
Walmart is a particularly important player. While it’s still new territory for the retailer, advertising has boosted the big box retailer’s bottom line in recent quarters. The company also recently agreed to acquire TV maker Vizio to further boost its advertising business.
Amazon ranks No. 1 among companies tracked by eMarketer after consideration The largest retail media network in the United States, accounting for approximately 75% of retail media advertising revenue. Other top-grossing networks include Walmart, Instacart, eBay and Ezzi.
The shift to retail media comes as advertisers face changes in technological privacy that lead to reduced data collection.
Earlier this year, Google began revamping the way it and other companies track users online, using cookies that monitor their activities so advertisers can target them with relevant ads.
In January of this year, Google began to restrict the use of cookies by 1% of Chrome browser users, with the goal of completely deleting third-party cookies in the third quarter of this year. Advertisers have been grappling with how to make this transition happen.
Advertising and media executives note that retail media networks now dominate conversations at conferences and other gatherings, such as the Cannes Lions Festival of Creativity. This is often a highlight of earnings calls.
“(Retail media networks) strike a balance between targeting, privacy and compliance,” said Tim Hurd, vice president of media activation at Goodway Group. “I think that’s where the money really starts to move. “I think that’s the key. . These retailers own this data”
stay away from tv
In some cases, some big brands have sat on the sidelines for years amid the TV advertising frenzy surrounding America’s biggest sporting event, the Super Bowl, but they were back on Sunday with big investments at record ad prices. It’s been a rocky few years, marked by pandemic-era restrictions and political polarization, but the NFL Championship has provided increasingly unparalleled viewership that’s too big to miss.
Olivier Doulieri | AFP | Getty Images
The rise of retail media advertising comes against a backdrop of significant changes in the media landscape. The number of pay TV customers and traditional TV viewership (outside of sporting events) continues to decline as more viewers turn to streaming.
Although digital and streaming ad buying rebound, traditional TV still lags behind. That was made clear in the media giant’s first-quarter earnings reports Comcast NBCUniversal and Warner Bros. Discovery.
Disney’s ad revenue fell in the first quarter at traditional cable networks and Hulu, even as ad revenue grew at cable’s crown jewel ESPN; Warner Bros. Discovery Channel reported ad revenue decline; Paramount Worldwide NBCUniversal’s domestic ad revenue was flat after an expected boost from Super Bowl coverage. However, streaming ad revenue for traditional media giants has grown.
In addition to popular moments on TV like the Super Bowl and other live sporting events, advertisers are now strategizing on multiple fronts and allocating spend across TV, social media, e-commerce and digital, Goodway Group’s Hurd said.
“Linear TV advertising is still in decline,” said Kate Scott-Dawkins, GroupM’s president of global business intelligence. She noted that ad revenue over the past decade has shifted from print and radio to TV and now back to Digital Advertising.
Citing data from GroupM, Scott-Dawkins said U.S. retail media revenue has grown from less than $1 billion a decade ago to an estimated $42 billion this year, and $129.4 billion globally, noting that brand advertising budgets may not come directly from traditional TV. Move to live retail advertising.
Traditional TV revenue may shift to smart TVs, but retailers can provide data on customers’ spending habits, she added.
Revealed: Comcast is the parent company of NBCUniversal and CNBC.
About The Author
