To capture the current mood in the market, DMEXCO asked experts from leading German media agencies for their assessment of the development of the retail media category in the period from mid-March to mid-April 2023. In simple terms, retail media refers to advertising within web stores and online marketplaces. In addition to an assessment of the current situation, the survey also asked about the dynamics of growth compared to the previous year, the predicted growth, and an evaluation of the agencies’ own role in this area. The DMEXCO team also asked for an assessment of current developments and general conditions, as well as the most important players from the agencies’ point of view. The results of the expert survey are available as part of a large-scale retail media special on the DMEXCO website and as a whitepaper.
Spending 2023 – Outlook for 2024
Publicis, for example, forecasts an annual growth of 15 percent by 2025 for the retail search segment alone. In 2023, the current volume is already 2.2 billion euros, which is higher than the sum of investments in the audio, out-of-home, and cinema categories combined. And pilot also sees great potential for all brand managers and agrees with the FOMA trend monitor’s forecasts: The trend monitor expects retail media in Germany to grow by a further 27 percent in 2023 alone – more than any other media channel. Omnicom Media Group (OMG) Germany even sees retail media as a growth driver in the digital advertising market and attests to a “bright future” for the category.
The experts at Havas note a 30 percent growth in Germany from 2022 to 2023 and estimate that this momentum will continue in the coming year. Mediaplus agrees with this forecast, saying that the German market in particular is driving this development. A somewhat more cautious assessment of the situation is expressed by the communications and media agency Carat: in a challenging economic environment, retail media is one of the few areas that is growing at all – albeit only in the single-digit range.
A lack of standards & KPIs leads to great effort in handling
In their day-to-day work, the experts surveyed mostly struggle with the lack of standards and generally applicable performance indicators: the large number of e-retailers and their different planning strategies lead to a high level of complexity in the planning and implementation of campaigns. In addition, the self-service tools available to agencies still have room for improvement in some respects. The reporting and targeting options are also still too different to be able to adequately compare the performance of the providers. In this context, the players surveyed emphasize the role and importance of the Retail Media Initiative from the German Association for the Digital Economy (BVDW), in which the entire industry – from retailers to agencies and technology service providers – are to promptly develop uniform quality standards and comparable metrics, key figures and indicators.
Numerous developments boost agencies’ forecasts
In particular, the agency experts surveyed see great momentum in the role and importance of first-party data: the “cookiepocalypse” and the need for new GDPR-compliant targeting options along the entire consumer funnel are some of the key developments. Access to user-level data enables personalized activation and promotion, as well as live shopping. The shift from pure performance to awareness campaigns is also an important development in this area. And in the future, the metaverse may also offer an entirely new way of literally immersing yourself in a universe that knows no bounds – and that also applies to shopping.
Amazon is leading the way, other players are catching up
When asked about the relevant players in the market, there is unanimity as far as first place is concerned: Amazon is the undisputed leader. Zalando, MediaMarktSaturn, Otto, the Schwarz Group, Rewe, and Douglas follow behind in varying order. Experts mostly looked at the speed at which these players are developing their models for selling stock, bringing these models to a state of maturity, and opening them up as a key factor in how quickly the space is evolving for everyone. However, relevance is not only determined by size and sales –ultimately, smaller marketplaces can also be highly relevant due to their thematic focus.
Media agencies ensure comparability
According to the media agencies surveyed, the fact that discussions and commissions often still take place bilaterally between retail media platforms and advertisers directly is an obstacle to growth. After all, the agencies are not only experienced in campaign planning on different platforms and channels: Media agencies are also a solution for greater efficiency when it comes to quickly gaining insights that can be easily sorted into existing technical and operational infrastructures and therefore produce comparable results for advertisers. They can also offer objectivity when assessing individual providers among and against each other and in relation to other categories. By fully integrating retail media with the rest of an interconnected communication plan, customers are supported in creating seamless transaction options at all touchpoints along the consumer journey, saving them the need to build up their own resources as a whole.
Professor Dominik Matyka, Chief Advisor of DMEXCO, states: “No matter which experts we surveyed or which forecast from the various associations – across the board, it’s clear that retail media is one of the most dynamic segments out there, and it is significantly driving growth in the digital advertising market. That’s why we’re giving this topic plenty of space at DMEXCO: with our current special on this topic, at the expo through the many exhibitors from this area, and of course also as part of the conference, where top-class industry representatives will discuss the most exciting trends.”
Dirk Freytag, President of the German Association for the Digital Economy (BVDW) explains: “The digital advertising market is poised for further dynamic growth. Retail media is making a significant contribution to this, especially since retailers are bringing new, high-quality first-party data to the market, which can also be used in a targeted manner with other data sources via data clean rooms. The BVDW is currently pushing ahead at full speed with the standards necessary for this, which will be a central topic at DMEXCO.”
The boom in new data will be discussed by the scene’s brightest minds at the DMEXCO Retail Media Summit on September 20, 2023, starting at 3 pm. Speakers in Cologne will include Patricia Grundmann, Managing Director at OBI First Media Group, Jessica Koch, Director of Retail Media at Douglas, Christian Raveaux, Head of Customer Insights & Media at REWE, and Maike Abel, Head of Media, CRM & Content at Nestlé.
To get an impression of the current mood in the market and to look at the situation as well as the dynamics of retail media’s growth compared to the previous year, DMEXCO surveyed experts from the top seven media agencies in Germany from mid-March to mid-April 2023 and asked them to assess the category. Find out more about this in our whitepaper on retail media.
Image material for DMEXCO is available online at https://go.dmexco.com/de/press-downloads-dmexco