Analysis of US retail media advertising expenditures! Amazon's market share is as high as 37%!

Amazon is the dominant force in retail media networks, commanding 37% market share in a sector estimated to be worth $100 billion, according to a study conducted by MediaRadar in partnership with Marketing Dive.

The study found that Amazon attracted more than 14,200 companies from more than 17,000 brands in 2022. Other retailers, including Walmart and Target, comprised the second largest retail media allocation, accounting for about 36% of the market. Overall, Amazon and other retailers combined accounted for nearly two-thirds (73%) of retail media spending.

Amazon is a unique player in the retail media space, acting as an e-commerce platform first. The company’s roots and scale in the digital space provide brands with an advantage over traditional brick-and-mortar stores as they look to conduct online activity closer to the point of transaction, especially as retail media gains traction in CPG.

Amazon’s digital business is strong enough that no competitor came close to capturing its share of retail media revenue last year, even as many companies, including retail giants like Walmart and Kroger, invest more heavily in online services.

“Amazon’s grip on the digital landscape is so tight that brands on its platform are in a league of their own,” said Todd Krizelman, CEO and co-founder of MediaRadar, in a statement. “While other players are growing rapidly, it’s difficult for traditional brick-and-mortar retailers to beat Amazon on its own turf.”

Data shows that Amazon's advertising revenue increased by 19% year-on-year to $11.6 billion in the fourth quarter of 2022. Walmart's advertising revenue for the whole year reached $2.7 billion. The retail giant is expanding its media sales business in an effort to become the world's largest physical enterprise as soon as possible.

MediaRadar recommends that traditional retailers focus on channels where Amazon has a lower market position, including in-store experiences such as screen touchpoints, and email marketing to generate more revenue.

Notably, Amazon has also recently tested email tools to help merchants better connect with existing audiences and reach new ones. As ad sales become a more important profit driver, such tools have the potential to become a key component of Amazon’s retail media strategy.

According to MediaRadar, the verticals with the most advertisers on the Retail Media Network last year were consumer electronics (15% of total spending), housewares (6%), snacks and desserts (6%), home repair products (5%), and furniture and decor (5%). HP, Palmolive, Pepperidge Farm, Planters, Ritz, Epson, and Starbucks were some of the most popular brands.

Editor ✎ Nicole/

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