The advertising landscape is undergoing a massive transformation. Traditional advertising channels like linear TV and display ads are losing their dominance as brands shift their budgets toward more performance-driven options. A key driver of this change? Retail and commerce media networks.
Retail media is not just a new trend—it’s a fundamental shift in how brands connect with consumers. By making use of first-party data, closed-loop measurement, and direct access to shoppers at the point of purchase, retail media is pulling ad dollars away from traditional formats.
The Decline of Traditional Advertising
For decades, brands have relied on display advertising and linear TV to reach broad audiences. However, with the rise of digital platforms, consumers have more control over the content they consume. Streaming services, ad blockers, and changing consumer behavior have contributed to the steady decline of traditional ad channels.
Some key trends:
- Linear TV ad spend is declining as audiences shift to connected TV (CTV) and streaming platforms.
- Traditional display ads are losing effectiveness due to ad fatigue and privacy restrictions limiting targeting capabilities.
- Social media still holds strong, but brands are diversifying into retail media for more precise targeting and measurable performance.
The Rise of Retail and Commerce Media Networks
Retail media networks (RMNs) allow brands to advertise directly within retailer-owned platforms, leveraging first-party shopper data for highly targeted campaigns. Platforms like Amazon Ads, Walmart Connect, and Instacart Ads are driving this shift by providing brands with access to in-market shoppers in real time.
Key benefits of retail media:
- First-party data advantage: As third-party cookies phase out, brands need new ways to target consumers effectively.
- Higher ROI: Retail media campaigns are often more measurable, allowing brands to track sales impact directly.
- Integration with e-commerce: Ads are placed at the moment of purchase intent, leading to better conversion rates.
How Ad Spend is Evolving Across Channels
Looking at the redistribution of advertising dollars, we see:
- Retail media ad spend is surging, with forecasts projecting it to surpass $100 billion globally in the coming years.
- CTV and streaming ads are growing, fueled by the decline of linear TV viewership.
- Traditional display ads are shrinking, as advertisers focus on more data-driven channels.
Conclusion
The shift in advertising spend toward retail and commerce media networks is reshaping the industry. Brands that adapt to this new reality will be better positioned to connect with consumers in a more relevant, measurable, and efficient way. As digital advertising continues to evolve, expect retail media to play an even bigger role in the future of marketing.