By Sam Boughedda
There is a $130 billion opportunity in retail media advertising, according to Morgan Stanley analysts. They told investors in a note Tuesday that the firm sees the opportunity by 2025 as "retailers leverage their customer data to power online ads" and that The Trade Desk, Inc. (NASDAQ:TTD) and Criteo S.A. (NASDAQ:CRTO) are best positioned to benefit, while Amazon (NASDAQ:AMZN) is "the early leader."
"We estimate that advertisers spent ~$80bn on retail media globally (ex-China) in '22, as they increasingly take advantage of retailers' proprietary customer data to power their ad campaigns," explained the analysts. "Retail media allows advertisers to drive better conversion by leveraging retailers' customer data, and ultimately generates more ad revenue for the retailers."
Retail media made up 20% of total online ad spend last year and, looking ahead, Morgan Stanley expects it to grow at a~17% 2022 to 2025 CAGR and "drive ~45% of forward online ad spend growth...ultimately reaching $130bn or ~25% of total online ad spend by '25."
"We see TTD and CRTO as arguably the best positioned to benefit," the analysts added. "If TTD and CRTO are able to launch increasingly effective tools and work with retailers to prove out the efficacy (and data security) of their retail media solutions, we believe it would position both companies to deliver better than expected results."
On Amazon, they stated that the company remains the early leader in this space as it comprises 47% of the total market.