US digital retail media ad spending is forecast to grow by almost a third (31.4%) this year after shooting up by almost half (49.3%) last year, according to a recent forecast from Insider Intelligence. Indeed, retail media ad spend in 2024 is expected to be almost double last year’s total ($61 and $31 billion, respectively) and almost triple the 2020 figure ($20.8 billion).
Insider Intelligence provides some context to these figures: retail media’s 2020-2024 forecast compound annual growth rate (CAGR) of 30.9% will make it the second-fastest growing major ad channel, behind only CTV (33.3%), and exceeding video (26.2%) and social media (21.4%), among others. The 2024 forecast of $61.15 billion in retail media ad spend also puts it close to the projected spend on traditional TV advertising ($67.17 billion) at that time.
Insider Intelligence notes that retail media ad spend “tracks closely with its largest subset: e-commerce channel ad spending,” which will show “robust” growth during the 2020-2024 period (CAGR of 29%). These trends have certainly helped Amazon become an advertising giant in the US.
Likewise, when it comes to cookie deprecation (Chrome updates planned for 2023), social platforms are again expected to be the most impacted (36%), but close behind will be e-commerce platform advertising (33%), according to respondents.
Other pieces of research (such as this one and this one) have also found marketers likely to allocate more spend to social media as a result of the planned cookie deprecation. And while the Integral Ad Science doesn’t specify whether or not the impacts felt from privacy changes will be positive or negative, as Gartner reflects, “recent data privacy changes have made retail media more appealing for brands.”