Advertisers are shifting retail media spend beyond Amazon to include Walmart, Target and more

Ever since Tinuiti’s retail media arm emerged from the digital wilderness a decade ago, its bosses have been bombarded with a singular chant from advertisers: “Amazon, take my money.” That was the alpha and omega of their retail media game plan.

Fast forward to about six months ago, and a strange thing happened: Those same advertisers flipped the script.

They began pushing Tinuiti executives to spend their advertising dollars not just on Amazon, but across a spectrum of platforms.

These days, it’s a rarity for Elizabeth Marsten, Tinuiti’s vice president of commercial strategic services, to participate in advertiser discussions that revolve solely around Amazon. The trend has shifted to a more inclusive approach, using Walmart, Target, Instacart and an ever-growing list of platforms.

These are not just a few outliers that Marsten is talking about. This shift is catching on with about a quarter of the agency’s client base.

Still: Amazon isn’t giving the cold shoulder and taking the majority of their advertising budgets, even as it shares the stage with a growing number of retailers.

Spending on these additional platforms — Walmart, Target and the like — is experiencing double-digit growth this year, outpacing Amazon’s advertising growth, albeit from a lower base, Marsten said, but declined to provide specific percentages.

This trend is not limited to Tinuiti and its advertisers.

For example, on global retail media and marketplace Macarta, ad spend to retail media owners outside of Amazon is expected to grow 25% to 30% this year compared to 2023, while on Amazon the growth rate is estimated at 10%.

The same goes for advertising and digital advertising agency Markacy. Retail media ad spending outside of Amazon is expected to grow 20% this year for its advertisers, while the pace for Amazon is expected to remain essentially flat.

Little by little, retail advertising is stepping out of Amazon’s shadow.

Amazon’s spending is growing, just like its competitors

“Retail media has been synonymous with Amazon, but 2024 will likely be the year this link begins to fade,” said Jared Belsky, CEO of digital agency Acadia. “The investment chips, at least from our customers, are starting to flow to Walmart, Instacart, Kroger, Chewy, Ulta and more.”

This diversification, which was initially slow, has become increasingly pronounced. Non-Amazon retail advertising spend for the agency’s clients is expected to grow 13% this year on a $100 million pot, up from 7% last year.

Walmart in particular seems to be accounting for a large part of this growth. According to Belsky, Acadia’s customers saw their ad spend with the retailer increase 45% between the third and fourth quarters of last year.

Seems like all those advertising upgrades Walmart has been pushing for the past 18 months or so are finally paying off. Spending for Acadia’s advertisers grew faster there last year than on any media advertising platform.

As Belsky explained, “Walmart grew 104% for us [in 2023]The target was 56%, after which the smaller retail media companies collectively grew by about 200%.”

Other agency executives interviewed for this article – anecdotally – echoed the same sentiment, saying Walmart is quickly emerging as the top player in retail media after Amazon.

Here’s how Amy Rumpler, sv of search and social media services at Basis Technologies, put it: It’s too early to predict how much each partner’s spend will grow this year, but over the past 12 months, Walmart has grown faster than Amazon. . However, total spending on Amazon is still much higher than spending on Walmart at this point, Rumpler continues.

There are several reasons for this, including the fact that advertising prices on Walmart’s retail media can be up to 40% cheaper than Amazon’s, thanks to the lack of competition.

But perhaps even more important is the potential to increase spend with established, commercially influential partners.

This is especially true in the CPG space, where a CMO at a retailer must meet a certain spending threshold to secure prime placement in stores. That commitment isn’t really there when they advertise on Amazon. How much they spend there may not make or break their company’s stock price.

Why Walmart is winning – for now

“Walmart matters in CPG and grocery,” Belsky said. “Spending there will not only increase sales through Walmart Connect for businesses there. When they spend that money, they also influence their salesperson’s manager or line review.”

So it’s no wonder some of these CMOs are putting more of their advertising dollars into Walmart than Amazon. It just makes sense, as one agency director put it. Yet it is likely that only a handful of marketers are currently taking this step. Most are still trying to figure out how much to throw at retail media, let alone where to throw it.

Either way, Amazon isn’t exactly sweating this.

While ad spend there may not be rising at the same rapid pace as elsewhere, with Acadia posting a 22% increase in 2023, it’s essential to put these numbers in perspective. Amazon’s advertising business is a behemoth $44.9 billion empire, dwarfing Walmart’s $3.2 billion business. Comparing the two is like putting a lion and a kitten side by side: they are simply not on the same scale.

Yet it is clear that all players, big and small, are benefiting from the retail media boom sweeping the sector, with each getting its share of the pie from different sectors. In particular, traditional areas such as shopper marketing and TV have long been an artery for this shift in spending.

Programmatic is another source of advertising dollars for retail media, although newer and less entrenched than the other two.

Contrast this with the industry’s adjustment to phasing out third-party cookies in Chrome.

As Belsky explained, “A world is emerging where more and more people are looking for high-fidelity data before cookies are written off.”

When faced with a situation like this, few options rival turning to retailers. Amazon, Walmart et al.

These giants have a wealth of first-party data, including every customer’s transaction history, thanks to mandatory login requirements for purchases. This data is invaluable for targeting, especially as traditional cookie-based methods become less reliable.

It is difficult to say how much this will now accelerate the pace of advertising on retail media. There is certainly some impact on spending, but there is also a lot of uncertainty. What will advertisers do if these cookies crumble? The answer is as clear as mud: vague and complicated.

What is crystal clear, however, is that the hunt for the very best “high-fidelity data” that Belsky talked about earlier is making marketers sit up and take notice of the full scope of the retail media market like never before.

An example of this is Danone, where Catherine Lautier, global head of media and brand communications, is waving the flag for investing more in retail media, using the promise of primo data as one of her key selling points to the higher-ups.

“Within the ecosystem of a retail media partner you can target specific consumers who are open to your category, which is a very important aspect for us,” continues Lautier. “We have never been able to do that kind of targeting with cookies. They never brought us to that level of behavior.”

But here’s the twist: just because there’s a willingness to funnel more money into retail media platforms doesn’t mean Danone – or any other advertiser – is going to throw all its eggs in that basket. In fact, they couldn’t even if they wanted to, not with so many of those dollars tied up in internal fiefdoms and commercial obligations. And Lautier knows this all too well.

“The internal challenge for us is that the money we spend at retailers is spread across different teams, from marketing to sales to e-commerce, so it’s difficult to be sure that what we spend is the best use of that money is,” she continued. “We’re trying to change that, because if you get that alignment right, retail media can have much more impact because of the close-loop attribution there.”

What she’s actually doing is preparing advertising dollars to find their true purpose. An operation where Danone’s marketers are abandoning the old, rigid guidelines like ‘TV for brand’ and ‘digital for performance’ in favor of something more flexible – something that embraces the idea that ads can do virtually anything marketers dream of, as long as just recreated them and measured them correctly.

Implementing changes of this magnitude is not for the faint of heart. It will take marketers with serious clout who can gain the support of those in the C-suite, not to mention the dedication to see this through. After all, this isn’t the kind of transformation they accomplish in five months; it’s more like a five-year marathon.

“The path to omnichannel is neither short nor easy, because in many cases it requires a huge reorganization. The bigger you are, the more difficult that is,” says Tinuiti’s Marsten. “That said, there are some major global organizations that are gearing up to do just that. I know because I have seen the RFPs and RFIs.”

It’s taken a long time to get to this point, where conversations about omnichannel budgets and retail media have become more than just fantasies.

For years it was all met with skepticism. Budgets were modest at best. But they gained ground when marketers adopted a test-and-grow approach to advertising on retail media. Now it’s becoming one of the more financial parts of their media plans.

“We expect retail market growth to continue to accelerate and individual grocers/retailers to continue investing in these capabilities to meet customers where they shop,” said Chris Jones, co-CEO of Markacy.

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