Target Information

Carrefour and Publicis have announced their intention to form a joint venture focused on the rapidly growing retail media market in Continental Europe and Latin America. This joint venture aims to leverage each company's strengths to create a comprehensive retail media platform that will revolutionize advertising in the grocery sector.

Carrefour has been a pioneer in the retail media space, launching Carrefour Links, their data-driven advertising platform that optimizes retailer-consumer interactions. With access to significant transaction data and a large customer base, Carrefour aims to enhance the retail media experience across its operational regions.

Industry Overview

The retail media sector has witnessed exponential growth, fundamentally altering the advertising landscape. In the United States, it is projected to overtake traditional television advertising within the next three years. Similarly, in Continental Europe, the addressable retail media market is expected to exceed €5 billion by 2026, reflecting the growing significance of targeted advertising within retail.

This growth is driven by evolving consumer behaviors and the proliferation of digital shopping platforms that facilitate direct interaction between retailers and consumers. Retail media effectively capitalizes on these relationships, allowing brands to reach potential customers at critical points in their purchasing journey.

Furthermore, regulatory changes concerning data usage and the anticipated phase-out of third-party cookies strengthen retail media's position, as retailers' first-party data becomes increasingly valuable. As such, retailers can offer precise and highly effective advertising solutions that resonate with consumers in real time.

By combining their resources, Carrefour and Publicis are set to enhance their leadership capabilities in the retail media sector in both Europe and Latin America. The partnership seeks to bridge gaps in market fragmentation and enable brands to harness the full potential of retail media.

Rationale Behind the Deal

The collaboration between Carrefour and Publicis aims not only to maximize the retail media potential of Carrefour's extensive customer data but also to attract a multitude of retailers to the newly formed platform. By creating an accessible media network, the joint venture aims to facilitate effective marketing strategies for brands, ultimately enhancing their advertising effectiveness.

The alliance signifies a strategic move toward establishing a comprehensive retail media ecosystem in Europe and Latin America, bringing together key industry players with direct consumer relationships and valuable data assets.

Investor Information

The joint venture will be controlled by Carrefour with a 51% stake, while Publicis will hold 49%. This partnership is anticipated to launch operations in the first half of 2023, contingent upon the customary legal and regulatory conditions.

Publicis Group has established itself as a leader in retail media technologies following its acquisitions of Epsilon and CitrusAd. With an unparalleled platform that integrates on-site and off-site retail media capabilities, Publicis brings extensive expertise and innovative solutions to the joint venture.

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The joint venture between Carrefour and Publicis is poised to be a significant investment opportunity, given the surging demand for retail media solutions. With the market set to expand rapidly in the coming years, this partnership places the two companies in a favorable position to capitalize on emerging trends in consumer behavior and advertising efficacy.

Moreover, their combined technological capabilities and vast datasets are likely to provide an unparalleled advantage in the competitive landscape. By capturing first-party data, they can offer precision-targeted advertising that aligns seamlessly with consumer preferences.

However, the effectiveness of this initiative will depend on how well the partners can execute their strategy in attracting retailers to the platform and convincing them of its value proposition. Early success in these areas will be critical for long-term viability.

In conclusion, the joint venture appears to be a smart strategic move that taps into a lucrative market, potentially positioning both Carrefour and Publicis as leaders in the rapidly evolving retail media environment.

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