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How Retailers Became Ad Platforms
Major retailers are today, most notably Amazon, are creating and operating their own advertising platforms — and they’re making millions doing it. McKinsey estimates that by 2026, retail media will add $1.3 trillion to enterprise values in the U.S. alone, with profit margins between 50% and 70%. In this article, the authors introduce readers to the main kinds of retail media, discuss three strategic challenges that they present, and provide guidance for effectively managing those challenges.

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Major retailers, including Amazon, are venturing into the world of advertising platforms, a trend known as retail media. In 2023, Amazon raked in $46.9 billion from advertising, primarily from sponsored ads on its site, surpassing the annual global revenue of Coca-Cola. This makes Amazon the third-largest advertising platform in the United States, trailing only behind Google and Facebook. McKinsey estimates that by 2026, retail media will contribute $1.3 trillion to enterprise values in the U.S. alone, with profit margins between 50% and 70%. This article introduces readers to the main types of retail media, discusses three strategic challenges they present, and offers guidance for effectively managing those challenges.

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