Advertising: booming, “retail media” will soon double television

This is a change of position which is not expected before 2028. Nevertheless. The latest report from GroupM (WPP) has not gone unnoticed in the advertising world. According to the latter, the “retail media” – i.e. the monetization of advertising space on the merchant sites of major retailers as well as their customer data – will weigh more than 175 billion dollars in five years, a level which will then allow it to exceed television (including connected television) and to represent more than 15% of the global advertising market.

“In the United States, our customers will spend more on a site like Walmart.com than on a television channel like CNBC from 2025,” argues Arthur Sadoun, chairman of the management board of Publicis Groupe. In the meantime, this market segment will once again outperform the sector this year. After having (largely) crossed the milestone of 100 billion dollars in 2022 the “retail media” should climb by nearly 10% this year to reach 125 billion worldwide, according to GroupM.

A pioneer and world leader in this format, Amazon alone illustrates its dynamism. In the first quarter, the Seattle giant generated 9.5 billion in revenue via “retail media” – a jump of more than 20% compared to the same period a year earlier -, after having generated 37.7 billion in revenue with this activity in the 2022 financial year.

In full growth phase in France

A less mature market in France, the “retail media” weighed in at 887 million euros in 2022, according to the Observatory of e-pub, the Syndicate of Internet companies (SRI) and Udecam – an increase of 30% over one year -, and should cross the symbolic barrier of one billion euros this year. Which has not escaped anyone in the sector; Omnicom has just launched its offer dedicated to “retail media” in France: Transact.

“In the first quarter, our income from this activity accelerated by 19% over one year”, explains Christophe Blot, director of Cdiscount Advertising (Casino) which generated nearly 50 million euros in income via “retail media ” last year.

This resistance on both sides of the Atlantic to the prevailing economic context is explained by the very nature of “retail media”; advertisers can target consumers when they are in the process of purchasing in a merchant ecosystem and when measuring the effectiveness of a campaign is almost immediate.For now, the most popular format for advertisers, on all platforms, is “retail search” and the ociated sale of sponsored links and keywords to move up the search results.

“A performance medium”

“Retail media is a performance media that immediately generates revenue. When brands have to regulate their spending, they tend to arbitrate in favor of this type of format to the detriment of more traditional media”, underlines Christopher Blot. Another strong point of “retail media”: the very fine behavioral purchasing data possessed by “retailers” enabling brands to optimize their advertising campaigns on third-party sites.

An activity with a very high margin rate, this segment of the advertising market has seen all the French retail giants accelerate sharply. In June 2021, Carrefour launched Carrefour Links before joining forces with Publicis to launch a joint venture called Unlimitail, with which the two partners intend to become the European leader in “retail media”.

At the end of 2021, Infinity Advertising – a joint venture of Intermarché and Casino encomping four brands: Intermarché, Monoprix, Franprix and Supermarché Casino had also emerged. “We have already worked with more than 150 brands. On average, the ticket amounts to 30,000 euros for campaigns spanning nearly six weeks,” notes Alban Schleuniger, CEO of Infinity Advertising, which relies on RelevanC, Casino’s advertising solution, which sells it, as a white label, to “retailers” wishing to get into “retail media”.

A growing market

This segment of the market is also booming as conversions to “retail media” are accelerating. “After food distributors, consumer electronics, or DIY, we see firms in the beauty or delivery sector positioning themselves more and more,” notes Nicolas Rieul, Managing Director Southern Europe of Criteo who works with Leclerc, Fnac, Boulanger and recently signed with Deliveroo and Uber Eats globally.

In detail, adtech provides the technological infrastructure allowing e-merchants to set up their advertising offers and can also act as a management company to sell campaigns to brands. Some months after launching its DSP (the programmatic tool allowing advertisers and agencies to target their campaigns and centralize their advertising buying operations), Criteo lifted the veil on Tuesday on “Commerce Grid” – a new SSP (a platform for monetizing advertising space ) – which complements its system in this area.

In recent years, the French adtech has makes “retail media” its priority and manages to convince the markets. Over one year, its price rose by 35%, to nearly $1.9 billion in market capitalization. One more green light for “retail media”.