Retail Media Igniting M&A Activity in AdTech
Oct 1, 2023
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Retail media, now the third-largest U.S. digital advertising channel, is set to double its market size to over $61 billion by 2024, representing 20% of digital ad spend. Amazon dominates with 78% of retail media ad revenue, leveraging first-party data for targeted, high-ROI ads integrated seamlessly within its ecommerce environment.
Other retailers like Walmart, Target, and digital-only players such as Instacart and Wayfair are joining the fray, driven by increased online shopping during the COVID-19 pandemic. First-party data has become crucial as third-party cookies phase out, pushing retailers to enhance their data capabilities.
Mergers and acquisitions are key strategies, with companies deciding whether to build or rent retail media technologies. Amazon's in-house development contrasts with Walmart's acquisitions and third-party tech use. Recent M&As, like Publicis Groupe's acquisition of CitrusAd and Criteo's purchase of IPONWEB, highlight the industry's focus on data and technology.
Tech giants like Alphabet face competitive pressure as consumers start their shopping searches on Amazon. Alphabet may need strategic acquisitions to retain its digital ad market share.
Retail media is reshaping digital advertising with its emphasis on efficiency, relevance, and consumer experience, driving competition, innovation, and strategic M&As in the sector.
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