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Although inflation, a strong job market, and a positive economic outlook are at play, three dominant ad channels are contributing to upward US ad spend. October saw a 3.2% YoY growth for the US ad market, marking the fourth consecutive month of spending increases, according to the Standard Media Index ad market tracker.

The retail space is changing rapidly as marketers experiment with things like retail media, generative AI, and social commerce. In this discussion, Zia Daniell Wigder, Chief Content Officer, Insider Intelligence, talks about the trends on her radar and what she learned at Shoptalk.

Retail media networks (RMNs) will be a bright spot in the gloom. By the end of 2023, RMNs share of total programmatic digital display ad spend will have doubled since 2018 as retailers like Amazon, Walmart, and Instacart grow their share of the digital ad market. But retail media鈥檚 success is not enough to compensate for the dip in spending with other walled gardens 鈥� yet.

For the second half of 2023, US retail media ad spending will reach $46.38 billion, per Insider Intelligence鈥檚 forecast. Meanwhile, connected TV (CTV) ad spending will also post growth of 20.0%. In response, marketers in 2024 will create dedicated retail and media strategies to leverage retail data sets in CTV.

Programmatic digital display is no exception to the ad spending downturn that has sent ripples through our forecast. As marketers scrutinize their investments, social networks are losing share of the programmatic pie while CTV and retail media drive growth.

All eyes are on streaming. Last year, non-pay TV viewers surpassed traditional pay TV viewers in the US, per our forecast. Years of streaming platform proliferation are over, yielding to consolidation and fragmented ad measurement. Bundles between streaming platforms and partnerships with retail media platforms are forming, leaving media buyers with a headache over how to strategize.

That strong marketplace model is the foundation of a powerhouse retail media network. It鈥檚 not a coincidence that Amazon monetizes at much higher rates than its nearest competing RMNs. Strong marketplaces provide the traffic scale and quality desired by brands, and the ad auction density to drive price efficiency鈥攚hich in turn encourages more investment from brands.

Some 53% of marketers believe AI will significantly enhance the way shoppers are targeted and served relevant ads, per a survey from Cooler Screens. Both AI and retail media are still developing. As both of these areas mature, AI will make retail media data even more powerful. Here are some ways AI is improving retail media.

On a July 28 earnings call, Procter & Gamble CFO Andre Schulten emphasized retail media鈥檚 position as one of many marketing strategies.

Though retail media encompasses categories across the retail landscape, grocery remains at its core, with four out of five largest US retail media networks being connected to CPG or grocery sales of some kind, per our forecast. This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.

Vox Media Insights and Research.

And in Canada, Loblaw, the largest grocer in the country, has a retail media network that targets its PC optimum loyalty base of like 16 million people and they have a company called Advance, which is their retail media network, that allows advertisers to target that group. So I think that is one big opportunity that many retailers especially are looking at. Carina Perkins (18:39):.

Video streaming services, podcasts, video games, and retail media networks all sell inventory upfront. Read the full report, Digital Video Forecast and Trends Q2 2024.

鈥淎nother looming source of competition are retail media networks, where advertisers can reach buyers directly鈥� via Amazon, Walmart, and Instacart, she notes. These businesses represent the third wave of digital advertising after search and social media, and are increasingly vying for the same ad dollars Meta is trying to attract.

So to just explain, most folks probably know what that is, but non-endemic, some retail media networks starting to sell ads to advertisers who are pushing products or services not sold by the retailer behind the retail media network. And so that's who we're talking about, folks who don't typically sell through a retailer who are advertising through that retail media network.

In-store retail media ad spend will reach $1.06 billion by 2028, accounting for 0.8% of all retail media spend, according to our March 2024 forecast.

What this means for retail media networks: This data highlights the importance of the consumer/retailer relationship and shows that retailers鈥� owned channels remain a vital part of the retail media mix. RMNs can use this to secure additional retail media investment from advertisers. US retail media ad spend will grow 26.0% to reach $54.85 billion in 2024, per our forecast.

But since then, advertisers have invested more heavily in private marketplaces and closed ecosystems like social media platforms and retail media networks (RMNs), which fall under programmatic direct. Direct pathways are all the rage.

Walled garden spend share is being dragged down as the duopoly of Meta and Google becomes less dominant, and retail media networks have not yet made up for this dip. We don鈥檛 include search ads in our definition of programmatic digital display ads. If we did, walled gardens would likely continue winning share of programmatic spend, as noted in our 鈥淧rogrammatic Ad Spending Forecast Q3 2023鈥� report.

77% of US advertisers incorporate on-site ads as part of their retail media strategy, according to a February 2024 report by Skai and Path to Purchase Institute.

Retail media works. For 77% of US organizations, retail media has either met or exceeded KPI expectations, according to a December 2023 survey from Skai and the Path to Purchase Institute. Only 3% say it had little or no impact on desired objectives.

On today's podcast episode, we discuss the main ways the shopper journey is evolving, how retail media is shifting to encompass the full funnel, and how in-store retail media can help bring a brand's shopping message to life, particularly during holidays and events. Tune in to the discussion with our analyst Sarah Marzano and Nikhil Sharma, senior director of performance and insights at Roundel.

In fact, its 21.2% growth rate in 2023 will outpace that of retail media networks (20.5%). But social video is no longer the biggest growth driver in digital video ad spending. That title belongs to connected TV (CTV), which will grow 27.2% in 2023. Mobile dominates social video ad spending.

Amazon Prime will make up 53.1% of US paid retail membership fee revenues this year, according to our estimates.