Adtech Companies Helping Retailers Grow Ecommerce Ads

  • Retailers of all types are aggressively entering the advertising business.
  • Adtech companies have increasingly emerged to help them build and scale these businesses.
  • These 10 companies are helping companies like Walmart, Dollar General and Klarna crack retail media.

This is the 10th in a 10-part series that examines Amazon’s booming advertising business: the people powering it, the ripple effects on other businesses, and what’s next.

Retailers like Walmart, Michaels and Kroger are aggressively building advertising weapons and advertising technology companies want to cash in.

Retailers see an opportunity to capture a slice of an industry dominated by Amazon but growing. Boston Consulting Group estimates that e-commerce advertising will grow to $100 billion by 2026, representing 25% of total digital media spend.

Retail media is also a way for retailers to compensate for their small margins. BCG suggests that gross margins for ads sold on a retailer’s own website are at least 70%, versus retail margins of 19% to 38%.

“Retail media produces a pool of profits that can be transformative in financing a retailer’s key strategic bets — it’s net new profit,” said Lauren Wiener, director and partner at BCG.

With billions at stake, a cottage industry of startups and tech giants, including Criteo, PromoteIQ and The Trade Desk, has sprung up to help retailers sell ads on their websites and across the web.

These retail adtech companies help retailers with a wide range of services. For example, Michaels outsources his advertising sales to the advertising agency Criteo, while Walmart works with The Trade Desk for its programmatic advertising. Two competing adtech companies, CitrusAd and Criteo, both build tools for Target’s advertising platform. Other ad-tech companies help advertisers manage their purchases across the vast retail landscape so that they reach a large enough audience.

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Matt Prohaska, the CEO of Prohaska Consulting, compared the growth of the retail adtech industry to the early days of social media advertising, when dozens of third parties emerged to help advertisers buy ads on Facebook, Twitter and Snap. Many of those companies struggled when the social media companies started offering advertisers similar tools for free, and Prohaska predicted that retail adtech companies could follow a similar path. He said he also saw these adtech companies as acquisition targets for retailers.

“There is definitely interest in the M&A market to acquire some of these companies when they scale up and with the right valuations,” he said.

Insider identified 10 companies, listed alphabetically, that help retailers set up ad businesses. We have provided funding or revenue figures where available.

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