The hottest trend in advertising is Retail Media. Cited by eMarketer to grow to over $140B in spend in 2024, marketers are unleashing budgets at unprecedented levels to tap into the growing opportunity.  Wrestling the crown to become the “fastest growing form of media in history” - it’s important industry leaders study the ingredients that combined to create this opportunity.

1. The internet’s march to being dominated by performance marketing continues   

As we wrote years ago, to predict our digital futures, you should look down and look east.  The internet is going to be shaped by more lean forward experiences - more utility driven engagement and monetization - prompted by the phones people across the globe can look down and see in their hands. These experiences, combined with reflecting what markets have shown us prevails in Asia - where their mobile innovation has surpassed the U.S. for years - and the economic infrastructure of their internet is powered by actions and consumers finding the things and services they want to buy.  

Performance models are represented by the most economically efficient model in the history of the internet, Search, and it includes the most explosive and exciting trends we’re witnessing today: Retail Media, CTV Advertising, and the Creator Economy.  As Amazon CEO, Andy Jassey, shared in his latest earnings, the most “exciting opportunity” for brands, will be to directly connect business outcomes, such as a product sale or subscription signup, to advertising that’s traditionally been focused on driving awareness, such as TV.

2. Amazon teaches an industry “it can be better at being them than them.”  

Amazon has pioneered a number of societal impacting innovations across the internet - from online shopping, to cloud services, but what receives less fanfare is how Amazon has also contributed to the foundational elements of a number of leading internet advertising technologies.  

Amazon pioneered the affiliate industry launching Amazon Associates in 1996. This has led to the $15B affiliate industry and is a large contributor to the foundation of the Creator Economy - where you have multiple unicorn and high 9 figure valued startups competing. A note for those that have celebrated this channel, Publicis just cemented one of the first Creator Economy outcomes with their $500M purchase of Influential.  Like in Affiliate, Amazon catapulted the concept of Retail Media into the mainstream with their lunch of Amazon Ads.  As James Hercher from AdExchanger wrote, Amazon Ads has surpassed $50B in revenue in the past 12 months.   

What Retail Media introduces to brand marketers is the opportunity to tap into performance for one of the first times - and Amazon paved this path by enabling everyone from their small marketplace sellers to the biggest P&G brands an opportunity to drive more sales from the largest online retailer.  ‍

3. When you give a big TAM a better way to spend money, good things will follow.  

Brand marketers have dominated spend for years in the advertising industry, which is reported to be worth $647B as of 2023. There has been a hunger to shift what has historically been brand focused spend to something better performing, something delivering a return, and something incremental. Retail Media has been built with these marketers in mind - and it’s been part of Amazon’s evolution. We saw it begin with Amazon habituating user behavior to “start with Amazon”.  They went all in on making Amazon’s product search so good that users would ‘start there’ versus on Google.  Now, when CMOs are debating where to allocate their budgets - the ROI of a “sentiment analysis” of a tv campaign versus the cold hard dollars of provable Retail Media ROI will continue to move the biggest budgets in this direction.

With every trend, there are countless companies that can tap into the growth of a new market, the need for innovation, and the hunger to participate in a lifeline of opportunity  during challenging times.  In this new Retail Media trend - you’ll see the same, but what’s most exciting about this movement is that every step we’re taking is one that brings us closer to a better internet.  Less wasted spend, more privacy for users, marketers seeing more value for their money, and all parties aligning and winning when value is delivered.  That’s a win-win-win, and you can play a part in this new economy. There are plenty of winnings to go around.  

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