Dive Brief:

• Amazon, Walmart and Target are the top retail sites for ad spending, drawing over $2.3 billion from May to January, according to an analysis by MediaRadar. The firm reviewed advertising activity on 22 large retailer sites.
• Total advertising buys within the research sample, which included 24,000 companies promoting nearly 38,000 brands, topped $3 billion. A large portion (88%) of those dollars flowed to native advertising, while 11.5% was put toward display units.
• Consumer packaged goods made up 17% of the total pool, accounting for about $500 million in spending. Reckitt Benckiser, Kellogg and Mondelez were the most substantial CPG spenders, underpinning how large marketers are adjusting their media strategies amid an acceleration of e-commerce adoption.

Dive Insight:

Retail media has been a major discussion point in the industry as a wide array of companies stand up advertising networks and court brand dollars that have historically been earmarked for Facebook and Google. The MediaRadar findings help delineate some winners as the race heats up, though the pack leaders are hardly surprising. Amazon has the most formidable e-commerce operation in the category, along with significant bets in streaming, while Walmart and Target wield the biggest brick-and-mortar footprints.

The retail media field continues to grow more crowded, raising the question of whether there could be an eventual shakeout.

Short-term, brand interest in retail media is expected to remain healthy enough to support a wide playing field. E-commerce habits driven by the pandemic are sticking, if not quite at the meteoric heights they once reached. Meanwhile, the pending deprecation of third-party cookies is forcing marketers to change their ad-targeting tactics as they seek media placements closer to the point of sale. MediaRadar, which tracks campaigns across channels including online, TV, mobile and print, found Reckitt directed 14% of its total media spending to retail sites. Kellogg allocated 10% of its budget toward the category and Mondelez did 18%.

"The retail industry has seen dramatic changes over the last few years, especially during the pandemic," Todd Krizelman, CEO and co-founder of MediaRadar, said in a statement. "As such, companies are advertising on e-commerce sites in hopes that their products will be seen by the right buyer, ultimately ending with a purchase."

MediaRadar examined not only the total amount of spending on retail sites, but also how consistent the advertiser pool was. Fourteen percent of companies buying ads in January 2022 had done so every month since May 2021. Overall, the sample saw a 59% retention rate from December to January.

The lowest amount of spending occurred in May 2021, with ad spending hovering at around $218 million. December — the thick of the holiday season — notched the highest figures, with $426 million. January, which is typically quiet, saw $343 million spent, suggesting strong momentum carried over from the fourth quarter into 2022.

As retail media activity surges, retailers have made a point of calling out their strengths in the category. Amazon and Walmart have both started breaking out revenue from ad sales in earrings reports. Walmart Connect, the company's media unit, generated $2 billion in revenue in 2021. Amazon's advertising arm saw about $31.15 billion in revenue for the full year, and $9.7 billion in Q4 alone.

With a higher level of investment, ad offerings in retail media are expected to evolve. Native and display units still command the lion's share of brand dollars, per MediaRadar, but those placements could be nearing a saturation point on mature websites. Some companies this year are focusing on premium units, including video ads, shoppable media and bespoke landing pages.