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PATHMATICS · STORE INTELLIGENCE · USAGE INTELLIGENCE · YUWEN HUANG · MAY 2023
Retail Media Network Ad Spend and Chinese Mobile App Publishers Are on the Rise
Our State of Retail report reveals the growing command of Retail Media Networks over ad spend, the rising dominance of Chinese owned apps in mobile retail, and the unique role that the Facebook and Instagram ad platforms play in driving installs of mobile beauty apps such as Ulta and Sephora.
Chinese owned mobile apps now comprise many of the most popular retail apps by downloads and usage in the United states. Temu was the most downloaded app in the first quarter of 2023, followed by Shein. Alibaba made its appearance in the top ten for the first time in Q4 2022 and maintained it in Q1 2023. In total, China based publishers comprised 54% of all downloads for the top ten retail apps in Q1 2023.
Looking at retail beauty apps such as Ulta, Sephora and others, there is a strong relationship between digital ad spending on the Facebook and Instagram platforms and total downloads for each month between January 2022 and April 2023. Notably, there were much weaker associations between digital ad spend on the other platforms and total downloads, pointing toward a greater return on investment for the Facebook and Instagram channels. This may be reflected in the shift in the share of spending from Display and Video to Facebook for both Ulta and Sephora. Somewhat unexpectedly, there was no increase in share of ad spend on Instagram, which may represent an opportunity for competitors as they look to allocate their ad budget this year.
Retail Media Networks have begun to transform the landscape of digital advertising, with giants such as Amazon, Target, and Walmart leveraging their platforms for monetization, and in the process enabling brands and advertisers to target their advertisements more precisely while gaining valuable insights into their customers’ buying patterns. Walmart’s retail media network, for instance, saw ad impressions grow from 253M in Q1 2022 to a staggering 2.3B in Q4 2022, with January data pointing to sustained growth in 2023. Looking at Computers & Consumer Electronics impressions across the Target and Walmart RMN’s it is clear that advertisers are still developing their strategies around how to best use these platforms. More than half of the top 20 CCE advertisers spent 100% of their retail media marketing ad budget on Target’s RMN, leaving an enormous vacuum in the Walmart RMN that would represent a considerable opportunity to those in this category of advertiser were they to take advantage of it.
