The retail media boom and what it means for app marketers

Retail media is undoubtedly a buzzword within the world of digital advertising. And with good reason–it’s a booming, billion-dollar industry that shows no signs of slowing down. In the U.S., retail media ad spend is projected to exhibit growth of 26% in 2024, outpacing the 12.6% growth projected for digital ad spend as a whole.

What is the world of retail media all about, and how can app marketers grab a piece of the action?

“Retail media” refers to retailers–often large retailers–providing their own advertising capabilities and services, allowing advertisers to engage with them directly to purchase ad inventory.

A “retail media network” is an advertising network owned and controlled by this retailer, publishing advertisements within the retailer’s digital and non-digital environments. Retail media networks cover online and offline advertising, from websites and mobile apps to physical stores and digital billboards. No advertising channel is off limits, with emerging channels such as connected TV (CTV) also at the forefront of this latest advertising trend.

In some cases, a third-party publisher is involved in collaborating with a retail media network, working closely with the retailer to use their first-party purchaser data to publish ads on third-party sites.

Global retail media ad spend is predicted to reach $165.94 billion by 2025. Reaching captive shoppers while they’re shopping–and therefore more inclined to show interest in relevant ads–is one of the main drivers of this success. Its huge influence on the direction of digital ad spend and the opportunities presented by its giant audience reach make it an area that savvy app marketers should evaluate strategically. Diversity is key in app marketing and retail media could be the next component of your marketing mix.

The leading retail media network globally is Amazon, controlling an enormous 47% of the total retail advertising market. Even though experts predict that this share will decrease as the market grows, Amazon is set to remain a dominant player for the foreseeable future.

So vast is Amazon’s share of this digital advertising market that it’s now often mentioned as the third big player in the arena of digital ad spend, catching up with titans Google and Meta.

While its association with Amazon, eBay, and similar digital giants brings online ads to mind, it’s important for app marketers to consider retail media advertising across both online and offline channels.

The rise of retail media exists in parallel with the continual and fast-paced development of AI to optimize marketing. The potential for AI to disrupt and further grow retail media advertising is huge. As with many forms of advertising, ad targeting and personalization are key elements of retail media advertising, and AI is driving and improving these automated processes.

Ad targeting and personalization within the retail sphere are incredibly effective when it comes to engaging and converting customers. Using AI to adjust any ad element, from color and imagery to written content, enables an app marketer to continually hone and tweak advertising to optimize its performance.

Amazon Ads uses generative AI to produce images used in some of its ads, taking further pressure off a brand’s marketing function that would otherwise be responsible for ad design.

Another use case for AI in the retail media context is its ability to bring together online and offline data, for example match up that a customer made a purchase in-store and the same customer later made a purchase online. With in-store advertising making up just 0.7% of U.S. retail media ad spend in 2024 but 83.7% of total U.S. retail sales happening in-store, the ability to accurately measure and target in-store shoppers–just like we do for online shoppers–will be a game changer.

While a correlation between retail sites and app purchases isn’t immediately obvious, it’s important for app marketers to bear in mind that app brands have the option to advertise on platforms that don’t directly sell their products–and in fact the pay-off here can be significant.

Consider the places where your potential high-value app users are spending their time. If your app is in the gaming vertical, might you find potential app users who have used Amazon to purchase gaming hardware in the past? Could this segment be a pool of potential users that you mightn’t otherwise be able to reach? As we’ve mentioned, one of the biggest benefits of retail media is the availability of shopper data held by the retailer. In this case, the shopper data held by Amazon relating to previous purchases is invaluable in targeting advertising to defined audience segments.

Once you’ve partnered with a retail media network, the options are endless. Target potential app users onsite, offsite, and even in-store. Extend your app’s reach to new, engaged audiences in privacy-compliant ways.

With the advent of privacy-centric frameworks such as Apple’s SKAdNetwork (SKAN), its successor, AdAttributionKit, and Google’s upcoming Privacy Sandbox on Android, marketers are facing a reality where there is less access to a device-level data. While embracing a next-gen measurement future is paramount, retail media provides access to retailers’ first-party data and therefore additional, complementary ways to focus advertising on users defined by certain attributes.

The ability to target advertising and accurately measure performance (think KPIs such as return on ad spend (ROAS) and cost per click (CPC)) drive the success of mobile marketing and the success of retail media advertising. Advanced MMPs (mobile measurement partners) provide platforms that can be used to measure all of an app’s marketing campaigns, across multiple channels and including multiple advertisers, enabling real-time optimization and holistic measurement of performance against campaign KPIs.

As a market-leading MMP with strong and effective partnerships, Adjust offers integrations with major platforms including Amazon Ads.

Learn more about how to set up your Amazon Ads integration within your Adjust dashboard.

**To speak to the Adjust team about omnichannel campaign performance measurement and how we can  take your app performance to the next level, request a demo today. **