Retail Media Poised to Steal the Spotlight from TV in Ad Revenue by 2028

Rise of Retail Media: Ad Revenue to Surpass TV by 2028. Explore the growth of e-commerce sites and opportunities for brands. Stay ahead in the evolving advertising and retail landscape.

Jun 12, 2023 - 09:57
Jun 12, 2023 - 09:57
Retail Media Poised to Steal the Spotlight from TV in Ad Revenue by 2028
Retail Media Poised to Steal the Spotlight from TV in Ad Revenue by 2028

The realm of retail media is experiencing a remarkable surge, with projections indicating that its revenue from retailer-owned e-commerce sites will surpass that of television by 2028.

GroupM, acknowledged as the largest media buyer globally, has recently unveiled its highly anticipated 2023 Global Mid-Year Forecast report. The report forecasts a substantial 9.9% growth in advertising revenue from retail media channels, reaching an impressive $125.7 billion in 2023. Moreover, the report boldly predicts that retail media will outstrip television revenue by 2028, accounting for a noteworthy 15.4% of total ad revenue.

In terms of growth rate, retail media stands as the third fastest-growing advertising channel this year, following closely behind digital out-of-home (OOH) screens and connected TV (CTV). However, it is worth noting that retail media eclipses both these channels in scale and impact.

These findings from GroupM's report mirror earlier forecasts provided by renowned market research firm eMarketer.

Leading retailers such as Amazon, Walmart, Target, and major grocery chains like Carrefour, Ahold Delhaize, Tesco, and Sainsbury's are proactively engaged in attracting prominent advertisers to their e-commerce platforms.

For retailers, securing advertising partnerships with consumer brands that sell products through their websites represents a double victory. They not only profit from product sales but also generate revenue from advertisements, amplifying their financial gains.

Due to the hefty sums major consumer goods companies are willing to invest in securing prime ad placements on retailers' sites, profit margins for retailers from retail media can soar as high as 90%. This additional income assumes even greater significance as traditional revenue streams face challenges posed by escalating living costs.

The COVID-19 pandemic has led to a surge in digital channel adoption among shoppers, making retail media all the more enticing to brands. It offers advertisers a unique opportunity to diversify their advertising expenditures, beyond the stranglehold of digital advertising giants such as Google and Facebook-owned Meta Platforms, often referred to as the "duopoly."

However, the landscape underwent a significant transformation with the advent of stricter digital privacy regulations, exemplified by the European Union's General Data Protection Regulation (GDPR). In response, major internet players scaled back on the collection of personal data.

Consequently, the value of data collected directly by retailers has skyrocketed, as it enables highly targeted brand advertising and precise measurement of its effectiveness—a phenomenon commonly referred to as first-party data.

Retail behemoth Amazon has long been a pioneer in the field of retail media, divulging that its ad business generated a staggering $11.6 billion in revenue during the fourth quarter. Walmart, another major player, has witnessed exponential growth in its retail media arm, Walmart Connect, with sales surging by nearly 30% to $2.7 billion in the fiscal year ending January 31.

While the development of retail media networks has been spearheaded by U.S. entities, European retailers are now awakening to the immense potential presented by this avenue.

Ahold Delhaize, a prominent Dutch grocer, has made significant strides in its ambition to generate €1 billion in revenue from non-grocery businesses by 2025. This strategic effort centers around selling ads on its supermarket websites and capitalizing on consumer data insights, as affirmed by CEO Frans Muller in a recent statement to Reuters.

Sainsbury's, the second-largest supermarket group in the United Kingdom, has introduced Nectar360—a groundbreaking platform that seamlessly combines its loyalty scheme with cutting-edge marketing services. Having already established fruitful collaborations with 700 brands, Sainsbury's projects an additional profit of over £90 million ($113 million) from this venture by 2026.

Mark Given, Chief Marketing Officer of Sainsbury's, underscores the immense opportunities that lie within Nectar360. More brands are recognizing the platform's potential to enhance their return on ad spend and fuel business growth, highlighting the substantial gains that can be achieved.

Leading consulting firm McKinsey predicts that retail media networks in the UK grocery sector alone have the capacity to generate a staggering £1 billion in profit within a span of approximately two years.

Also Read: Texas Businessman Linked to Impeachment of Attorney General Ken Paxton Faces Federal Court Appearance Following FBI Arrest

iShook Opinion Curated by iShook Opinion and guided by Founder and CEO Beni E Rachmanov. Dive into valuable financial insights at for expert articles and latest news on finance.