Amazon and Flipkart are online market places. If a product is advertised on them, the chances of conversion are very high, as the product is at a place where the buyers are at a point of purchase. The return is between four times to eight times. Ad spend thus on e-commerce sites is increasing. In 2022, these e-commerce sites accounted for Rs.7000 crore of the total Rs.49,900 crore spent online by advertisers, amounting to 14 per cent. In 2021, this amount was 12 per cent. Retail media is the biggest growth story in advertising.

The growth can be attributed to searches that happen online for the products the buyers are interested in. These searches originate on retail media and lead to sales. There is sharpness of targeting.

Social media such as Facebook, Threads, Instagram, Reels and WhatsApp do attract advertising. They constantly innovate to attract more advertising, say Reels. Google Ads work best on YouTube after search. New platforms lead to better click-through rates and better conversations.

Amazon’s global advertising revenue is about $38 billion, which is less than Google’s $166 billion or Meta’s $112 billion. Amazon is rapidly growing, doubling its share. Google and Meta maintain their share, but are not growing. Even in Google’s ad revenues, a large part is contributed by search advertising.

In India, brands in the automobile, consumer goods and cell phones are shifting to online retail media platforms.

The CPM on retail media is 30 per cent.