Adtech companies that help retailers grow e-commerce advertising

  • Retailers of all stripes are aggressively moving into the advertising business.
  • Adtech companies have increasingly emerged to help them create and grow these businesses.
  • These 10 companies help 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 running it, the ripple effects on other companies, and what’s next.

Retailers like Walmart, Michaels and Kroger are aggressively building ad arms, and ad tech companies want to cash in.

Retailers see an opportunity to get a share of an Amazon-dominated but growing industry. Boston Consulting Group estimated that e-commerce advertising will reach $100 billion by 2026, representing 25% of total digital media spending.

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

“Retail media generates a pool of profits that can be transformative in funding a retailer’s core strategic bets – that’s net new profit,” said Lauren Wiener, managing director and partner at BCG.

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

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

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

“There’s certainly an appetite in the M&A market to pick some of these companies when they’re sized and with appropriate valuations,” he said.

Insider has identified 10 companies, listed in alphabetical order, that are helping retailers build ad businesses. We have listed funding or revenue figures where available.

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