Global advertising spend on retail media is poised to reach $128.2bn this year, according to the latest forecast from WARC Media, with Amazon the biggest winner. Up 10.2 per cent year-on-year, ad investment is forecast to rise to $141.7bn in 2024 and is on track to overtake linear TV as the third-largest channel by spend within a few years.

WARC Media’s latest Global Ad Trends report examines the surging levels of retail media ad investment, the potential challenges for brands, and includes industry expert commentary about the future of retail data as an enabler of effectiveness across the media landscape.

“Retail media has been the advertising story of the decade so far,” said Alex Brownsell, Head of Content at WARC Media. “The unfashionable and often informal world of trade and shopper marketing has transformed into a $128.2bn digital advertising behemoth. What comes next will be less spectacular but more significant to brands, as deterministic retail media data begins to inform campaigns across the media landscape.”

The report finds that Amazon is set to supplant Alibaba as the world’s largest retail media owner by ad revenue this year. The growth in retail media is dominated by Alibaba and Amazon. Between them, they earned an estimated $80bn in advertising revenue in 2022, equivalent to more than two thirds (68.3 per cent) of global retail media investment.

Amazon occupies more than four fifths (87.8 per cent) of the market outside of China, according to WARC estimates, and is forecast to earn $45.4bn in ad revenue this year. Its 20.4 per cent year-on-year ad revenue should see Amazon supplant Alibaba as the world’s largest retail media owner this year. Amazon is forecast to further accelerate in 2024, as its ad revenue reaches $52.7bn (+16 per cent), compared to $42.1bn (+1.4 per cent) for Alibaba.

The report also notes that retail media, which is primarily used to drive sales, is moving beyond paid search formats. For most marketers, it remains a lower funnel channel to drive sales conversion: less than a third (30 per cent) of respondents surveyed by WARC and the Digital Shelf Institute use retail media to build brand awareness.

However, retail media networks are increasingly moving beyond search formats into video, audio and out-of-home through cross-channel partnerships, such as Walmart’s tie up with Roku and Kroger’s deal with Pandora. This enables the unlocking of upper-funnel ad dollars with brand-building formats to improve campaign effectiveness.