蘑菇AV

Even as some signs foretell a rebounding economy, total US ad spend is still down. Advertisers will keep investing in performance-oriented channels, which is good news for retail media search. At some point, retail media search ad spend will hit a ceiling. Amazon shoppers say the feed has already become cluttered with sponsored results.

Chinese ecommerce players Temu and Shein disrupted the digital advertising market in 2023 as they competed to attract online shoppers by bidding up keywords鈥攑articularly in apparel and accessories and home goods. But Temu has also been on a global tear, expanding to nearly 80 countries since early 2023. It has diversified ad spending accordingly to acquire customers in new markets.

Three years ago, traditional media accounted for the majority of ad spending. The balance tipped in 2022, and digital spending will completely overshadow traditional by 2026. Retail media is the biggest driver of digital. During the economic downturn, ad spending was drawn down the funnel, with retail media being the biggest beneficiary.

However, the two metrics usually move in tandem, with ecommerce booms heralding ad spending booms, and ecommerce deceleration heralding ad spending deceleration. Worldwide ecommerce sales growth began a two-year decline in 2021 that the global ad industry quickly emulated.

With or without a TikTok ban, Snapchat is poised to capture more ad spending in 2025 as new ad formats like Sponsored Snaps and Promoted Places ramp up. The big picture: Uncertainty around TikTok and Meta is spurring further diversification in the ad market.

Over 80% of ad spending in the US for technology and electronics (87.1%), retail (82.9%), and consumer packaged goods (80.2%) is directed toward digital media, according to 蘑菇AV鈥檚 August 2024 forecast.

Social platforms have been bolstered by ecommerce-driven ad spending, automated ad offerings such as Meta鈥檚 Advantage+ suite, and an ever-increasing emphasis on video. Key Question: What is responsible for the strong growth projected for social ad spending?

GenAI is taking the search market by storm, but market dynamics will stay largely the same this year.

While 2025鈥檚 projected ad spend shows the industry is healthy, there may be some challenges for major agencies, which have seen a decreasing share of US ad spend over the past several years, per Advertiser Perceptions.

US retail media ad spend will reach $59.61 billion this year, according to our October 2023 forecast. 18.5% of retail media network ad spend is coming from off-site advertising, and that share is growing, per our forecast. With retail media gaining so much of the digital ad landscape, it鈥檚 no surprise ad giants like Google and Microsoft are building out their own retail media tools. Use this chart:.

Though we鈥檝e downgraded our retail media forecast, we anticipate the channel will experience double-digit growth through 2027. 鈥淚 don鈥檛 think it鈥檚 an exaggeration to say that retail media is one of the most important and potentially most transformative ad spending channels in media right now,鈥� said our analyst Max Willens.

69% of US agency and marketing decision-makers measure the success of retail media campaigns through return on ad spend (ROAS) or incremental ROAS, according to July 2024 data by Quartile and NewtonX.

Retail media is the fastest-growing ad channel we track in the US, growing by 26.0% this year. Its share of total US media spend will reach 14.1% this year, and come 2028, nearly 1 in 5 ad dollars spent in the US will go to retail media. But the channel has the potential to grow even more. Here are four key factors that present challenges to retail media growth right now.

Politics will buoy linear TV ad spending this year, but allocations will continue to shift toward streaming options that keep gaining ad-supported viewers.

But for now, YouTube leads competitors in both time spent and ad spend. For 2024: Embrace the pivot to digital. It鈥檚 where viewers are spending an increasing amount of time and where ad formats tend to be more shoppable. 3. Cookies are going away, for real. Google confirmed last month that it will begin deprecating third-party cookies in 2024.

48% of US retail business decision-makers say video ads drive the biggest return on ad spend (ROAS) on Amazon, according to March 2024 data by Zogby Analytics and Feedvisor.

Programmatic advertising will account for 91.3% of US digital display ad spend this year, or a total of $157.35 billion, per our December 2023 forecast. Last week, advertisers at Programmatic I/O discussed where those ad dollars are headed and how programmatic advertising is changing. From ad spend waste to the expansion of retail media, here are three big trends discussed at the event.

Consumers may be concerned about the economy, but the outlook is good for ad spend in the final months of 2024. The share of advertisers concerned about a slowing US economy dropped 11 percentage points (from 49% to 38%) between November 2023 and August 2024, according to the Interactive Advertising Bureau (IAB). Retail media鈥檚 popularity, an influx of value-based messaging, high political ad spend, and connected TV (CTV) monetization will boost the ad industry the rest of 2024.

US social media ad spending will ride the momentum platforms built in H2 2023 thanks to AI, social video advertising growth, and a fixation on bottom-funnel outcomes.

US financial media network ad spend will soar to $1.22 billion in 2026, nearly doubling from $640 million in 2025鈥攁 66.8% compound annual growth rate (CAGR), per our May 2025 forecast.

Retail digital US ad spend will grow by 12.2% this year, second only to travel at 14.3%, per our forecast. Retail digital ad spend growth will pick up speed next year, hitting 14.2%. Use this chart:. Understand the mix of industries buying ads. Recognize how competitive retail advertising can be. More like this:.

That鈥檚 a win for Meta, YouTube, Alphabet and others, which could otherwise see revenues fall if ecommerce giants cut digital ad spending. We expect ecommerce sales to grow between 5.1% and 7.9% in 2025 under moderate and limited tariff scenarios鈥攍ike this one鈥攃ompared with 1.9% under heavy tariffs.

This year, as the digital ad spend outpaces the time consumers are spending on the medium, media companies are leaning into revenue drivers like commerce media while also investing in content that builds community.