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Retail media meets Wall Street: what Amazon Advertising and Uber’s analyst briefings tell us

All publicly quoted companies have to formally announce their results to the market annually and quarterly. While usually deathly dull – and carefully crafted – presentations of results, recently there have been some interesting revelations about big companies and their retail media strategies. 

In the past few weeks there have been two standouts: Amazon Advertising and Uber. So, what do these two companies presentations reveal about their – and the wider world’s – retail media strategies?

Amazon Advertising

Amazon Advertising has seen growth of 24% year-on-year between 2022 and 2023, rising from $38bn to $47bn in a year and reinforcing the strength of the company’s retail media plans. While among the pioneers of retail media, Amazon has been able to rapidly grow and deploy advertising and create a phenomenally large business channel – with more to come.

On a recent presentation, Amazon CEO, Andy Jassy said of Amazon Advertising: “Amazon’s advertising progress remains strong, growing 24% year-on-year from $38bn in 2022 to $47bn in 2023, primarily driven by our sponsored ads. We’ve added Sponsored TV to this offering – a self-service solution for brands to create campaigns that can appear on up to 30-plus streaming TV services, including Amazon Freevee and Twitch, and which have no minimum spend”

Jassy continued: “Recently, we’ve expanded our streaming TV advertising by introducing adds into Prime Video shows and movies, where brands can reach more than 200 million monthly viewers in out popular entertainment offerings, across hit movies and shows, award-winning Amazon MGM Originals and live sports like Thursday Night Football. Streaming TV advertising is growing quickly and off to a strong start.”

Uber advertising

Meanwhile, Uber celebrated its first profitable quarter in 2023 – a significant achievement considering its previous profitability challenges – but one number stood out in its earnings: the Uber Ads’ annual revenue run rate of close to $900m in 2023.

Uber CEO, Dara Khosrowshahi told analysts in February that: “Uber’s large premium and global user base is an important audience for advertisers. The power of our advertising platform stems from what Uber users tell us every time they use our apps, where they want to go and what they want to get.”

Khosrowshahi has been very specific to the market about this: “We’re just scratching the surface of what we believe will be a multi-billion-dollar opportunity”.

During these analyst briefings, the detail can be quite revealing.  Khosrowshahi is quoted as saying: “We have kind of historically talked about ad penetration as percentage of Delivery getting to about 2% as a target for us. We’re a little bit above 1% now.“

To increase that percentage, there are a couple of factors. One is to increase the number of monetisable impressions per user session. While we have to be careful about the ad load, there are lots of new ad formats, new placements, increased monetization of search.  Second for us is increasing the adoption and budget of advertisers. The average return on ad sales on advertising is about 8 times. So makes a lot of sense for more restaurants or more grocers to use our ads product. 

More to come and why that matters

Walmart, Target and other retailers have also mentioned Retail Media in their analyst calls over the last few years. Part of the driver for the quotes and insight from CEOs and CFOs is that analysts have heard that Retail Media is a high margin business, and they are looking for Retailers to increase their tiny margins.

Another driver is that Retail Media is in-vogue – trade marketing would never have had a mention on analyst calls. If a CEO and CFOs are mentioning once specific part of their business by name, then you know you have ‘made it’ – Retail Media is now truly on the agenda as a driver for the share price.

Retail Media Networks are the focus of a brand new RetailX Events conference this June. 

MediaX explores the experiences of well-established retailers in this space to new entrants and the agencies who are helping make things tick. For the full list of speakers, agenda and to register – click here.

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