Amazon’s retail media ad revenue grows more than 2.5-fold in 3 years
Retail media advertising is one of the most promising trends in the digital advertising industry. With projected total global revenues from ads on digital retail media networks of US$128 billion in 2023, up from US$111 in 2022, the industry looks back on solid growth. And revenues are expected to increase further. Retail media advertising is a form of sponsored ad marketing. Retail players provide slots within their eCommerce infrastructure – websites, apps, etc. – for third parties to book. Brands advertising on retail media networks profit from the retailers’ rich data collection to target their audience in the most sensitive stages of their purchasing journey – directly before or at the checkout or when they are about to choose a product they like.
Retail media advertising is thus a very powerful marketing tool that more and more marketers invest in. Brands are increasing their budgets in the field and online media experts in Germany, for example, expect digital retail media to be the hottest digital advertising trend in 2023, according to a FOMA survey. Advertising slots in the networks of the leading eCommerce players are logically most popular among marketers, bringing about huge revenue sums to the website owners in return. The three leading digital retail media networks in terms of total revenue in Europe, however, did not perform equally over the past few years:
With a 2022 digital retail media ad revenue of US$3.4 billion or a share of 54% in the total European digital retail media market, Amazon is by far the leading player in the field in Europe, dwarfing the rest in terms of revenues. But Amazon does not only lead in terms of total revenue, but also when it comes to growth. While eBay and Zalando saw a rather volatile revenue development over the pandemic years, Amazon increased its digital media ad revenue strongly and constantly over the past years. In absolute and in relative terms, Amazon’s ad revenue growth of 163% between 2019 and 2022 is unbeaten among the top players.
The years 2020 and 2021 saw especially high year-on-year growth rates of more than 50%. Only 2022 cooled down slightly, with a year-on-year increase of 13%. The revenue development for eBay and Zalando was completely different. When looking at the three-year period 2019 to 2022, both competitors were also able to increase their retail media ad revenue, but at lower rates than Amazon. Yet what clearly distinguishes them from Amazon is the volatility of ad revenue when looking at the single years. eBay saw negative retail media ad revenue growth in two consecutive years: -23% in 2020 and -1% in 2021.
Only the unprecedented growth of 77% year-on-year in 2022 made achieving the 36% plus in the three-year period possible. Zalando’s number one growth year was 2020, when digital retail media ad revenue surged by 79%. 2020 then also brought along slightly negative growth for Zalando, before 2022 settled at a still remarkable plus of 31%. The overall positive revenue trend for all three of the top players underlines the potential of digital retail media advertising for eCommerce players – yet Amazon is far out of sight for other competitors in terms of total revenue.