Retail media networks generated a surge in cookie-less advertising this year, according to data from ad tech firm 33Across and marketing analytics firm WARC. The new stats seemed to dispel early fears that Google’s pause on killing cookies last month would dampen the retail media boom.

The boom is only growing with recent success from new media networks such as Uber’s, which surpassed an ad revenue run rate of $1 billion a year, and as other networks come online from other sectors, such as Chase and United Airlines. The media networks all rely on first-party data about consumers, collected by retailers and other industries, to target ads instead of using invasive third-party cookies. But when Google gave a lifeline to cookies in its Chrome browser last month, there was some talk that one of the losers in that move would be retail media, since brands could continue to lean on cookies for programmatic advertising functions.

“Retail media has other things that they’re working on,” said Kevin Dunn, VP of industry sales, retail and CPG at data platform LiveRamp. “I don't think retail media executives are worried about the cookie hanging around.”

The latest numbers back up that confidence: Global ad spend is set to top $1 trillion for the first time this year, up 10.5% from 2023, according to WARC. In that analysis, retail media was the fastest-growing segment, compared to other categories including social, search and connected TV. Retail media advertising will grow 21.3% year over year, according to WARC. Since 2019 it has doubled to a $152.6 billion market.

Leading growth

“With retail media expected to lead ad spend growth over the coming years, and with new, diverse players emerging in ad selling, from Uber to Chase, we are once again seeing the value of first-party data in targeting,” James McDonald, director of data, intelligence and forecasting at WARC, said in the ad study.

Meanwhile, the campaigns coming through retailers’ ad technology—through Amazon, Walmart, Target, Albertsons, Kroger and others—are less reliant on cookies, the internet trackers that have been at the heart of a years-long privacy debate.

Ad Age’s guide to retail media networks

Retailers are more proactive with cookie-less advertising than other sectors, according to 33Across CEO Eric Wheeler. Retailers allocated 30% of their programmatic ad spend to cookie-less pathways through 33Across in the second quarter, an increase of 173% year over year. In the second quarter of 2023, retailers only sent 7% of their advertising to cookie-less environments, which shows that a switch flipped in the past year, a time when Google was pressing the gas on its plan to kill cookies in Chrome

Last month, Google retracted that goal, however, slowing down the development of its alternative, cookie-less ad platform called Privacy Sandbox. Instead, Google said it would develop an optional third-party cookie proposal for consumers to choose whether they accept cookies or not, instead of outright blocking them next year.

Also read: A guide to Google’s ad tech trial

There were concerns that Google’s move could slow the flow into retail media, but Wheeler disagreed. Retailers are “not just spending more, they’re spending really smart,” Wheeler said. “They’re bidding more. They’re bidding higher, CPMs [cost per thousand impressions]. They’re winning more. They’re very invested in buying cookieless.”

What 33Across detected was retailers, without naming which ones, using their first-party data to help brands manage campaigns. Oftentimes, Amazon, Walmart, Target and others have ad teams that run digital ad campaigns across the web for brands that are in their stores. These ads can show up on the open web, search, social and connected TV.

“This is retailers leaning into off-site inventory,” Wheeler said, of the data 33Across tracks.

What brands want: data

There are some reasons to believe that a longer life for cookies could diminish the pull of retail media, according to Matt Voda, CEO of marketing tech firm OptiMine. Brands could still use cookies to target and measure ad campaigns without handholding from a retail partner.

“It’s a headwind for a retail media networks whose value in the ecosystem is to say, ‘If you use our retail media network, we’re going to get you in front of all the shoppers who buy your products, or buy your competitors’ products,’” Voda said, “and now the brands are maybe a little less reliant on the retail networks to get in front of those shoppers, because they can use the third-party cookie to get there.”

Still, the longevity of third-party cookies remains a question. Google said it will simply give Chrome users a choice to turn them off. It’s still unclear how that choice will be presented to consumers, but marketers expect that consumers will mostly opt out. If they do, that would mean the bet on retail media and other first-party data products for advertising was worth it, said John Sharry, VP of media and optimization at customer data platform Amperity.

Retail media networks “have the thing that the brands want, which is the customer and the customer data, and with that, they're spending more,” Sharry said. “And every forecast I’ve seen says that’s going to continue to grow. … The campaign performance is indicating that they should spend more there, too.

“We feel vindicated,” Sharry said.

~ ~ ~
CORRECTION: A previous version of this story incorrectly reported the allocation of retailers’ programmatic ad spend to cookie-less pathways.