Retailers are building their own ad businesses to compete with Amazon. Here's the latest news on Walmart, Instacart, and more.
Business Insider
Aug 9, 2022, 02:17 IST
Walmart, Target, Instacart, and others are building advertising businesses to boost their margins and capitalize on the...
Retailers are gunning for advertising dollars.
Retail ad is predicted to grow 31% to $41 billion this year, and Amazon, Walmart, Instacart, and others are building ad businesses to get a piece of it.
They're betting on the growth of e-commerce and the hope of offsetting retail's thin margins by pitching advertisers on the ability to reach their shoppers. They're also making big hires to support these ambitions.
Insider is keeping track of all the moves in the space.
Amazon dominates retail media
Amazon is the third-biggest digital advertising company behind Google and Facebook, notching $31 billion in advertising in 2021 by promoting its ability to grow consumer awareness and pitching TV and in-store ads.
But each retailer has different ways of selling and measuring ads, which can make it hard for advertisers that need to manage campaigns across all of them.
Grocery delivery companies like Instacart and Gopuff are becoming big players for advertising as they seek to offset food delivery's slim margins.
Instacart is aiming to top $1 billion in advertising in 2022. DoorDash is similarly trying to build an ad business while trying to stay on top of the food delivery wars.
Specialty chains like Michaels and gig companies like Uber to Shopify are also getting into the retail media business.
Shopify, which lets merchants sell products online, has a new tool called Shopify Audiences to let advertisers target ads on Facebook and Google. Ulta Beauty has a new retail media network, UB Media, that sells ads on an off its platform.
E-commerce advertising growth has been a boon for companies that manage advertiser spending on retail platforms and for adtech firms that help retailers build ad businesses.
E-commerce M&A soared 50% between 2019 and 2020, showing the demand for companies that help merchants sell on third-party marketplaces, according to Pitchbook data via JEGI Clarity. Private equity firms like KKR and Blackstone have been pouring money into warehouses and e-commerce holding companies.