Join us to hear more from Insider Intelligence’s Andrew Lipsman, eMarketer principal analyst, as he digs deeper into his reasons for optimism in this burgeoning market in our upcoming live Meet the Analyst Webinar, “Retail Media 2022: What’s Next for Digital Advertising’s Third Big Wave?”

Retail media advertising had a banner year in 2021—one that will be hard to top. US retail media ad spend surged 53.4% to $31.49 billion, following a nearly identical growth rate in 2020. We expect growth to begin tapering this year, rising 31.4% to $41.37 billion.

So if retail media growth has already peaked, why do I think 2022 will be the year of retail media networks? Here are just a few reasons:

1. Retail media ad spend growth in 2022 will still be huge. While the growth rate may be coming down, the total increase in retail media ad spend—nearly $10 billion—is similar to 2021’s gangbuster year. That’s a lot of digital ad spend up for grabs with a lot of retailers vying for their piece of the pie.
2. Dozens of retail media networks are beginning to scale. Amazon has driven much of retail media’s growth to date, but nearly every major retailer now has a retail media network—with several already generating hundreds of millions of dollars in high-margin revenue. In Walmart’s case, it’s well into the billions.
3. Retailers are getting better at the digital advertising game. Most retailers that launched their retail media networks in recent years have understandably had a steep learning curve. With help from third-party retail media technology platforms, retailers have been able to accelerate their progress and better meet the demands of brands.
4. Competition is driving retail media innovation. With so many retailers looking over their shoulders at the competition, the pace of innovation is picking up. Retailers are leaning into their strengths—whether that’s having a vertical-specific focus (e.g., Best Buy and Wayfair) or omnichannel purchase data (e.g., Kroger) for targeting and measurement—to deliver relevant advertising experiences for brands.
5. Retail media is aggressively moving into new media formats like CTV. To date, retail media has been driven heavily by sponsored search ads, and to a lesser extent, display and video ads. This year, retail media platforms will begin powering more connected TV (CTV) through demand-side platform partnerships (a la Walmart and The Trade Desk) and content platforms (e.g., Kroger and Roku).

In short, retail media is just beginning to realize its considerable potential, and it’s about to get a lot more interesting—and profitable—for retailers and brands alike.