Retail media is one of the fastest-growing sectors within the digital advertising industry according to a new study from IAB Europe and Xandr Microsoft.
The European marketing association has found that 92% of advertisers and 74% of agencies are already partnering with retailers to reach consumers.
Of those that have not yet engaged with retail media as an advertising channel, 88% of advertisers and 77% of agencies plan to do so in the next year.
Overall, IAB Europe forecasts that retail media ad spend will reach £21 billion (€25 billion) in Europe by 2026.
According to the report, first party-data is one of the key opportunities within retail media, with more than a third of buyers citing data as a ‘key driver’ of retail media adoption. While 91% of buyers have a first-party data strategy in place, 49% are still working towards scaling their first-party data strategy.
Despite the positive feedback in relation to retail media, a third of the study’s participants cited ‘scale’ and ‘integration with other advertising technologies as their top two ‘barriers’. IAB Europe claim that buyers want to be able to purchase their advertising via ‘one or a few’ technology partners and the lack of retail media ad tech integration remains a ‘stumbling block’.
Subscribe to Marketing Beat for free
Sign up here to get the latest marketing news sent straight to your inbox each morning
“Retail Media in Europe is already an €8bn market and growing double-digit despite economic headwinds,” IAB Europe chief economist Daniel Knapp said.
“The pandemic-induced rise of e-commerce, paired with retailers’ first party data in a world of signal loss, and the ability to combine ad exposure and conversion into a single platform are key market drivers. We see further potential for off-site retail media to integrate retailer’s role more widely in the upper marketing funnel.”
Microsoft Advertising global head of retail media sales, Paul Longo, added: “Our research with IAB Europe shows how third-party cookie deprecation has accelerated the adoption of this channel since it offers the benefits of first-party data with closed loop attribution. However, there are still pain points related to scale and technology that are creating challenges for retailers and brands.
“We are passionate about working with both retailers and brands to deliver solutions that drive meaningful business outcomes; solutions that offer retailers the tools and platforms they need to drive scale, efficiency, and performance for brands, and that enable brands to capitalise on this opportunity to reach high value audiences.”
