What it is
Boston Consulting Group, a consultancy that sells to retailers, with Google, which sells offsite media. Both have an interest in the market looking large and profitable.
The 2022 report, produced with Google, estimates the size and economics of retail media, the advertising retailers sell to suppliers on their own sites, apps and stores and, offsite, on other publishers. It puts growth in onsite spending at 22% a year over five years with margins of 70% to 90%, and offsite growth at 35% a year with margins of 20% to 40% after media costs and agency fees.
The per-category retail gross margins in one exhibit are in chart images that could not be extracted, so only the margin ranges stated in the prose are cited. The figures are an estimate, and the distinction between an estimate and a disclosed margin is the one the report turns on.
What the commerce leader should take from it
- If the estimate is even half right, an hour of the shopper’s attention online earns the grocer more than the goods in the cart. That is why the identity graph is sold to suppliers before it is shown to the service desk.
- No retailer has disclosed a retail media margin. Kroger characterises its alternative profit as high margin and gives no figure.
- The report is four years old and co-produced by a media seller.
Where to start
Read with findings 1.4 and 4.2. The supplier money that rides on the promotion, and the household record that the retail media team sells, are the same asset; the estimate here is the reason they are guarded, and the findings are what the shopper pays for that.
Keep in mind
An estimate by a consultancy with a media seller, from 2022, with the per-category margins unextractable from the document.
Where the report uses it
Read during the report design; not cited in a finding or a perspective yet.