Digiday+ Research deep dive: Brands are more invested in retail media than agencies, as Amazon still dominates

Digiday’s survey found that, overall, brands are a lot more invested in retail media than agency marketers. While nearly three-quarters of brand and retailer pros (70%) said that, as of Q1 of this year, their companies advertised via retail media, including Amazon, fewer than half of agency pros (44%) said the same of their clients.

It’s a wide gap between the two groups — but it makes more sense for brand marketers to be actively advertising on retail media platforms since they’re also probably using those same platforms to sell their products.

Where Digiday’s survey did not find a wide gap is between the percentage of brands and agencies putting retail media spend toward Amazon specifically. Of the brand and retailer pros who said in Q1 of this year that they advertise via retail media channels, 84% said they were currently using Amazon. Agency pros were on par with their brand counterparts at 82%.

This shouldn’t be a big surprise, but these numbers put Amazon well ahead of other retail media platforms. Walmart came in second among brands, with 54% of brand and retailer pros saying they were using the platform as of Q1, followed by Target at 30%. The order came out the same on the agency side of things, but with very different percentages: 36% of agency pros told Digiday they were using Walmart for retail media advertising in Q1, and 25% said they were using Target.

Digiday’s survey found that, for both brand and agency marketers, sales is the main way they measure the success of their advertising on Amazon. Considering that we’re talking about retail media here, that does make the most logical sense. It also helps explain the large gap between the percentage of brands (whose main business objective is to sell things) who said they’re using retail media as an advertising channel and the percentage of agencies who said they use retail media.

About three-quarters of marketers said that they measure their success on Amazon through commerce or sales (73% of brand and retailer pros said this and 78% of agency pros said this). Conversions like downloads and registrations came in second for both groups, with 13% of brands saying it is their main measurement of success on Amazon and 22% of agencies saying the same.

Interestingly, Digiday’s survey found that spending on Amazon has followed a similar pattern for both brand and agency marketers in recent years, despite that large gap between the number of brands advertising on retail media channels and the number of agencies doing so on behalf of their clients. This also goes to show that, among the players in the retail media space, Amazon is really in a class all its own.

Digiday’s survey found that brands’ spending on Amazon has been trending upward in the last two years. In Q3 2022, 41% of brand pros said they were spending at least a very small portion of their marketing budgets on Amazon. A year later, that percentage rose to 55%, and six months after that (in Q1 2024), 83% of brand and retailer pros said they were spending at least a little on Amazon.

And the percentage of brands and retailers who are spending a lot on Amazon has also been trending upward. In Q3 2022, 7% of brand pros told Digiday they put a large or very large portion of their marketing budgets toward Amazon, 12% said they spent a lot on Amazon in Q1 2023, 21% said they spent a large amount on the platform in Q3 2023 and 30% said the same in Q1 of this year. Looking a bit closer, the most recent jump in the percentage of brands spending a lot on Amazon can be attributed to those spending a very large portion of their marketing budgets on Amazon — 19% said in Q1 2024 that they spent a very large amount on the platform, compared with 9% six months earlier.

It’s worth noting that the percentage of brands and retailers who spend just a little on Amazon also saw a significant increase in the last six months. More than one-third of brand and retailer pros (36%) said in Q1 of this year that they put a very small or small portion of their marketing budgets toward Amazon, up from 16% in Q3 2023. And most of that jump occurred among those spending just a very small amount on Amazon: 17% of brands and retailers said in Q1 that they put a very small portion of their marketing budgets toward Amazon, up from just 5% six months earlier.

Amazon’s dominance in the retail media channel is also apparent when we look at how agencies are spending on the platform. As of Q1 2024, 86% of agency pros said their clients were spending at least a little on Amazon — that’s up from just 46% six months earlier.

Nearly half of agencies said their clients are spending only a little on Amazon, though, making them the large group of respondents in Digiday’s survey (43% said in Q1 their clients put a very small or small portion of their marketing budgets toward Amazon, up from 27% in Q3 2023). But the percentage of agency clients who spend a lot on the platform has been trending upward.

In Q1 of this year, one-quarter of agency pros (25%) said their clients put a large or very large portion of their marketing budgets toward Amazon, up significantly from 9% in Q3 2023, 7% in Q1 2023 and 5% in Q3 2022. And in the last six months, the largest increase has occurred among the agency clients who are the biggest spenders on Amazon — 11% of agency pros said in Q1 of this year that their clients put a very large portion of their marketing budgets toward the platform after not one respondent said the same throughout all of 2023 and in Q3 2022.

For those marketers who aren’t yet sold on advertising on Amazon, Digiday’s survey found that money is the biggest obstacle to further adoptions for brands, while agencies are challenged by cost and lack of resources.

Twenty-eight percent of brand and retailer pros said in Q1 that lack of budget is the biggest challenge they face on Amazon, followed by 24% who said cost of media is their biggest challenge on the platform. Meanwhile, 41% of agency pros said cost of media is the biggest challenge they face on Amazon, followed by 23% who said lack of resources and content demands are the most challenging.

With only 14% of agency marketers agreeing with their brand counterparts that lack of budget is the biggest challenge on Amazon, it’s likely that agency marketers don’t know how to utilize Amazon as efficiently as brands do (especially considering that so many more agencies said lack of resources is their biggest challenge on the platform). This makes sense, considering that most brands are probably using Amazon to do business (i.e. sell things) in addition to using Amazon for marketing purposes.