Retail Media Revolution in 2023: Amazon leads a $40 billion explosion.

Here is a summary of the 2023 retail media landscape according to Marketplace Pulse:

Amazon’s advertising sector has exploded, boasting a staggering annual revenue of 40 billion dollars. However, it’s not just Amazon; other retailers are quickly joining the trend, collectively doubling the revenues of radio and print combined!

The numbers speak for themselves: according to eMarketer and GroupM, Retail Media Networks’ revenues are approaching television and are expected to surpass them by 2028. Google and Meta, once the advertising industry’s “duopoly,” are now facing fierce competition, with Amazon emerging as a formidable third player. The digital advertising industry has never seen such diversity and options.

Retail media networks are not limited to programmatic ads; they are expanding their reach and data capabilities. For example, Amazon exclusively streamed an NFL football match on Black Friday, featuring personalized ads with QR codes for each viewer.

Evolution of search: Retailers like Amazon are transforming search result pages with strategically placed ads, replacing original recommendation features with sponsored copies. As original recommendation algorithms fade, these new ads seamlessly integrate, creating a natural and engaging shopping environment.

Business reality: Sponsored Products may not create additional demand, but they guide buyers to specific items. Brands are heavily investing in sponsored content, recognizing it as a tool for product launch and growth, and a necessary element to be visible amidst the noise. As Paul Frampton, Global President of Control v Exposed, pointed out, “Not advertising is stealing the sale.”

The flywheel effect: Amazon initiated the advertising flywheel, making it its most profitable business arm and transforming how products are sold on the platform, redefining the associated costs of selling them. Walmart CEO Doug McMillon acknowledges the appeal of this department in terms of margin, emphasizing its importance in the business landscape.

Global impact: In China, Alibaba’s dominance in advertising revenue on platforms like Tmall and Taobao reflects a similar paradigm shift. Retail media is not just an option; it’s a necessity for claiming success.

The Future is now: Retail media is rewriting the rules of digital advertising, offering brands unparalleled opportunities for growth and engagement.