In Q1 2022, Home Goods advertisers spent $187mm on ads on retail sites like Amazon, Walmart, Target, Kroger and The Home Depot. 

Meanwhile, they spent just $77mm on YouTube ads. 

What does their penchant for retail media tell us about their overall digital advertising strategies? Do these advertisers see a future with YouTube—and can we predict anything about their strategies moving forward?

We dove into our data to find out.

Retail Media Has Found a Home 

The mainstay tactics in most advertising strategies, like YouTube and Google, have firmly entrenched themselves into the digital advertising world thanks to their longevity and a laundry list of success stories that give advertisers the confidence they need to invest. 

Retail media is ignoring that story arc. 

Despite being relatively new in the grand scheme of things, retail sites have already found a home in the hearts of Home Goods advertisers, especially those promoting Laundry and Cleaning products, Mattresses, Dish Detergent and Furniture. (These top five product categories accounted for 48% of Q1’s ad spend from Home Goods advertisers.)

Since May 2021, Home Goods advertisers have invested more than $622mm in ads on major retail sites. 

Unsurprisingly, much of this spending—nearly $210mm of it—came in Q4 as advertisers increased their buys leading up to the holidays. After December, which topped out at $76mm, spending on retail sites decreased following the holiday surge.

Now, with Q1 in the books, it’s clear that Home Goods advertisers are returning—February and March numbers have already neared pre-holiday levels. And over half of that is going to good ol’ Amazon; almost 1.5k companies spent more than $187mm to promote more than 2k brands, and 55 percent of that went to the e-commerce giant. (Which makes sense, given Amazon’s maturity in retail media.)

Still, Walmart got 17%, while Target, Kroger and The Home Depot got 7%, 6% and 3%, respectively.

There’s no denying Amazon’s dominance in retail media—but as other retailers enhance their data and capabilities, expect more ad dollars to go their way.

Although new retailers are entering the media game—Ulta Beauty recently introduced a revamped media network—much of the pressure on Amazon will come from Walmart. 

Earlier this year, Walmart announced upcoming improvements to its media network, Walmart Connect, including ad formats that’ll help brands reach consumers when they’re watching CTV.

Facebook Meets its Match in Native Ads

YouTube isn’t the only advertising giant feeling the wrath of retail media—Facebook’s starting to feel it, too. 

Case and point: When we looked at our data, including data from retail sites, we saw that Home Goods advertisers spent 40% of their dollars on Native advertising in Q1 2022 while spending 29% on Facebook.

If we remove retail media from the data set, Native advertising drops to just 3% while Facebook jumps to 48%. 

The sharp decline in Facebook spending when retail media enters the fray is a talking point in and of itself. The fact that these advertisers are moving away from such a tried-and-true channel in favor of something relatively new is intriguing.  

The real talking point, however, is the question: why the love for Native Ads?

Well, for one, the future of digital advertising will be all about creating the best and most seamless experience for consumers. Gone are the days when advertisers can just pop some ads online and expect their target audience to take them in stride. 

GDPR and CCPA are proof of this. 

All advertisers, including those in the Home Goods industry, know this. 

Native ads deliver on this necessity.

Combine the inherent makeup of Native ads with the high-intent data from these retailers and Home Goods advertisers have everything they need to deliver incredibly timely and relevant ads to consumers—a strategy that is sure to attract even more ad dollars from industry advertisers moving forward.

YouTube Gets the Hand-me-down Ad Dollars (for Now)

It’s not often that we can say YouTube is getting the short end of the stick.

But when it comes to attracting the ad dollars of Home Goods advertisers, that’s exactly what it got so far in 2021.

During Q1 2022, ad spending on YouTube was over $4.4b, but Home Goods advertisers accounted for just 2% of that ($77mm). 

While that’s a low amount compared to what Home Goods advertisers are spending elsewhere, especially on retail media, it appears that YouTube is growing on some of these advertisers.

In Q1 2022, we saw a 68% YoY increase from the first quarter of 2021 as YouTube’s top-spending categories increased their ad buys.

Spending from Home Improvement brands was up by nearly 400%, with top names such as Carsen Clamp (same brand name), Chervon (Ego Power+ and SKIL) and Product Bliss (Riggable) increasing their spending.

Meanwhile, Household Maintenance increased by 77% in Q1 YoY thanks to significant investments from P&G (Febreze, Gain, Microban 24, etc.), Reckitt Group ( Air Wick, Lysol, Resolve, etc.) and The Clorox Company (Clorox and Pine-Sol). 

In addition to the increase in spending, the number of new advertisers on YouTube reveals their growing fondness of the platform. 

In Q1, nearly $18mm (23%) of total spending on YouTube came from brands that didn’t do so in 2021.

It’s Retail Media’s Game to Lose

If the recent spending habits of Home Goods advertisers tell us anything about what their future strategies will look like, it’s that retail media will be at the heart of them—and that makes sense. 

Even in its relatively nascent status, retail media’s already a powerhouse, offering an unrivaled chance to reach consumers who’ve shown true purchase intent in a way that doesn’t get them calling for more privacy regulations. 

That said, the recent increase in YouTube ad buys goes to show that the video giant isn’t going to sit idly by while retailers gain even more steam. 

Will YouTube continue to close the gap? Undoubtedly. Video’s too ingrained in society for them to ignore it. 

But we’re still in the early stages of retail media’s evolution—and it’ll only get stronger. 

As it does, expect even more ad dollars to go its way. 

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Baseball. 

Apple pie.

Rearranging furniture.

That’s right—home goods and furniture rearranging is on the rise. Pinterest’s popularity continues to climb; in Q1 2022, Pinterest reported 433mm monthly active users (MAUs).  The TV channel HGTV (which focuses solely on home design, redecorating, and remodeling) also was the 9th most-watched TV network in 2021.

There’s even an article on Psychology Today explaining why people love moving furniture around (hint: it lifts your mood, provides concrete satisfaction, and instills a sense of effectiveness!)

Add to that the rapid acceleration of eCommerce in the wake of the pandemic that continues to impact the Home Goods industry and it’s easy to see why now is both an exciting and intimidating time to be an advertiser.  

So, how have these advertisers responded?

Let’s find out.

Digital Ads Incoming 

Ask most industry advertisers—except maybe those in pharma—where they’re putting their ad dollars and the majority will say digital.

The same is true for advertisers in the Home Goods industry—although at a slower pace than others. TV remains the go-to format, while digital formats are gaining ground.

In Q1 of this year, digital accounted for 36% of total spending, representing a 111% increase YoY. 

At the heart of this growth were increased investments in Facebook and Video, which grew by 14% and 12% from Q1 of last year. 

The move to both Facebook and YouTube aligns with pushes from both of these platforms into digital commerce.

In 2020, Facebook introduced Facebook Shops as a way for businesses to create online stores on its platform (Instagram, too).  

In 2021, YouTube hosted a live-streaming event called “Holiday Stream and Shop” that allowed select social media influencers to sell merchandise and products on the platform.

While Facebook and YouTube’s investment in digital commerce has wooed advertisers, we can’t say the same for Snapchat. 

Despite Snapchat’s heavy push into digital commerce in recent years, home goods advertisers’ spending decreased by 99% in Q1 2022.

As companies and consumers alike figure out the best way to buy and sell home goods online, spending has gained ground in print and TV, which have historically accounted for more than 80% of spending. (​​Print decreased by 12% YoY ($207mm in Q1 2022) and TV was down by 10% from the same quarter last year.)

Barring something totally unforeseen, digital will surpass Print and TV in 2023 (if not sooner) as the format attracting the majority of ad dollars from these advertisers.

Retail Media is Here

Home Goods advertisers aren’t shying away from retail media.

In Q3 and Q4 2021, Home Goods was the second biggest spending category on Amazon, Walmart and Target. 

In Q1 of this year, Home Goods accounted for 20% of the $250mm spent on retail media.

As society dives deeper into eCommerce, the benefits of retail media will be impossible to ignore. 

Why? 

The more purchases people make on these retail sites, the more data they can collect—the same data Home Goods advertisers can use to target consumers. 

For example, The Clorox Company could tap into Amazon’s data to show ads to people on Amazon who bought a competing product sold by Procter & Gamble. 

Similarly, it could target past purchasers who haven’t bought one of its products in 6-12 months. 

The ability to get in front of consumers who’ve shown clear purchase intent is an unprecedented opportunity no advertiser will be able to pass up.

More Time at Home Calls for More Furniture 

Some reports on the state of remote working point to its mass adoption, while others signal a return to the office as companies like Google call employees back. 

Nevertheless, we can agree that remote working in some capacity is here to stay, and that people are spending more time at home (even if most of them are currently going through a post-pandemic phase of doing anything but staying inside).

Given the increased time at home, Furniture/Decor advertisers, a subcategory of Home Goods, increased their ad spending by 8% QoQ in Q1. 

Top spenders in this subcategory included Sleep Number and Tempur Sealy, both of which were top spenders in Q1 2021. 

Castlery, La-Z-Boy and Lovesac also invested significant ad dollars in Q1.  

Collectively, these brands accounted for 33% of the category’s ad spend in the first quarter of the year.

Advertisers Welcome the Honey Do Lists 

More time at home hasn’t just translated into more furniture purchases. 

It has also meant more time to work around the house.

During the last two years, homeowners spent more time and money on their homes than ever before and the home improvement market has reaped the rewards.

Between 2019 and 2021, the home improvement market size in the United States increased by 32%. 

Similarly, hardware stores total sales in 2021 totaled $63b, which is $4b more than the year before.

To ride this wave, advertisers promoting Home Improvement/Building Materials increased spending by 34% QoQ in 2022. 

Top spenders in this subcategory included Product Bliss (Ruggable rugs), which increased spending by 410% and E. Mishan and Sons (Granitestone Nutriblade Knives), which increased its investment by 32x.

Additionally, Stihl and Chervon increased their spending by almost 850% and 900% QoQ, respectively. 

In a similar vein, Household Maintenance—think laundry products, home fragrances/air fresheners, cleaning products and dishwashing detergents—has been a top category in Q1 for the past 3 years.

In Q1 of this year, these advertisers spent more than $398mm on ads. (That said, spending for this subcategory is down by 20% QoQ in Q1 2022, but still exceeded $398mm.)

Home Goods Brands Are Adjusting to Post-pandemic Advertising

As the world continues to adjust to home investment and remote work trends kicked off during the pandemic, home goods brands are clearly doing the same as reflected in their ad strategies. The increase in digital and focus on home projects (yes, including the recreational activity of rearranging furniture!) sets them up well for successful campaigns far into the future.