Sarah Moss
November 4, 2025
16
minutes read
Amazon's advertising business now rivals its retail operation in profitability, and every major retailer from Walmart to Kroger is racing to replicate that success. The prize is a share of the $105 billion US retail media market projected for 2027, a channel growing so fast it's reshaping the advertising industry and challenging Google and Meta's dominance.
Retail media now sits where intent is highest—closer to the basket than almost any channel—and it finally links exposure to sales with closed-loop attribution. Retailers package their digital and physical touchpoints as premium ad inventory and activate first-party data that reflects actual purchases, not proxies. In a privacy-first environment, that’s a compliant, durable way to reach real buyers.
Momentum isn’t just hype. Seven in ten companies plan to increase their retail media budgets in 2025, and the economics are compelling for retailers themselves, with profit margins commonly in the 50–70% range for mature platforms—well above core merchandising. Clean-room adoption is rising too, giving brands safer ways to match audiences and measure incrementality.
This guide lays out the RMN landscape, how placements and data flows actually work, which networks lead, where measurement breaks, and what to fix. You’ll get a clear view of the trends that will define the next two years—from CTV convergence and off-site scale to better retail data collaboration.
A retail media network is an advertising platform operated by a retailer that leverages the retailer's first-party shopper data and owned media inventory to enable third-party brands to advertise directly to the retailer's customers. Unlike traditional advertising networks, retail media platforms sit at the intersection of commerce and media, allowing brands to reach consumers at the exact moment they're making purchase decisions.
The power of a retail network lies in its unique position. Retailers possess data that reveals what customers actually buy, not just what they browse or click. This purchase data, combined with loyalty program information, browsing behavior, and demographic insights, creates highly accurate customer segments. When a brand advertises through a retailer's platform, it gains access to this valuable first-party data while the retailer maintains full control over customer information.
Retail media networks monetize three primary asset types: digital properties like websites and mobile apps, physical locations including in-store displays and screens, and customer data that enables precise targeting both on and off the retailer's owned channels. This tri-faceted approach allows retailers to become media companies without abandoning their core business.
💡 The relationship between advertising technology and marketing technology plays a crucial role in how these networks operate. For a deeper understanding of how these systems work together, explore our guide on Adtech vs. Martech: Understanding the differences and synergy.
⚡ Retail media networks are making retailers into media owners with serious commercial influence, fundamentally changing the relationship between brands and the stores that sell their products.
Look under the hood of retail media and the appeal becomes clear. Through five core steps, these platforms connect what advertisers want with what shoppers do, then tie it all back to outcomes at the till.
Retailers compile their available advertising inventory across all channels. This includes sponsored product placements on e-commerce sites, display banner positions on category pages, search result slots, mobile app advertising positions, email newsletter placements, in-store digital screens, and partner network opportunities.
Simultaneously, retailers organize their first-party data, which encompasses purchase histories, loyalty program information, browsing patterns, and demographic details.
This data foundation enables the precise targeting that makes retail media so effective.
Brands access the retail media platform to define their campaign parameters. They select target audience segments based on the retailer's shopper data, choose ad formats that align with campaign goals, set budgets and bidding strategies, and determine campaign timing.
Some retailers offer self-serve platforms where brands can manage campaigns independently, while others provide managed service options.
Increasingly, retailers integrate with demand-side platforms to allow programmatic access to their inventory, making campaign setup more efficient for advertisers managing multiple retail networks.
Once campaigns launch, automated systems match ads to the right shoppers at optimal moments. The retail media technology uses auction mechanisms to allocate impressions, applying the retailer's proprietary data to ensure ads reach users most likely to convert.
For example, someone searching for coffee on a grocery retailer's site might see sponsored listings from premium coffee brands, while a shopper with a purchase history in baby products could receive targeted ads for infant care items across various site pages.
Shoppers encounter these ads during their normal shopping journey, whether browsing online, using a mobile app, or walking through physical store aisles.
Because retail media ads appear exactly where customers are already shopping, they align with high purchase intent. When customers click on an ad and make a purchase, the retailer typically earns a percentage of the advertising spend or a commission based on sales generated.
The defining advantage of retail media is closed-loop measurement. Retailers can directly connect ad impressions to actual transactions using their customer data, providing brands with concrete metrics like return on ad spend, sales lift, conversion rates, and incremental revenue attributable to specific campaigns.
⚡ Research shows that 71% of retailers consider their retail media networks very or extremely effective at conducting closed-loop measurement for brands.
This attribution capability, which ties advertising directly to sales outcomes, represents a major advancement over traditional digital advertising metrics.
💡 For brands seeking to understand the broader advertising technology ecosystem that powers these platforms, our article on What is adtech? Examples, trends, and benefits provides essential context.
Retail media advertising manifests across three distinct channel types, each offering unique advantages for reaching shoppers at different stages of their journey.
Onsite advertising appears directly on the retailer's owned digital properties, including e-commerce websites, mobile applications, and other branded channels. These placements capture shoppers actively browsing or searching for products on that specific retailer's platform.
Common onsite formats include sponsored product listings that appear at the top of search results or category pages, display banners positioned on homepages and product detail pages, native advertising that blends with organic product content, and video ads featured on product pages or within app experiences. On platforms like Amazon.com or Walmart.com, brands bid for premium placement when customers search relevant keywords, ensuring their products appear prominently during high-intent moments.
The strength of onsite retail media lies in reaching shoppers at the digital shelf when purchase intent peaks. These ads feel less intrusive because they integrate naturally into the shopping experience, often appearing indistinguishable from organic search results. For brands, onsite placement means competing directly at the point of decision.
💡 To learn more about how native advertising integrates into retail environments, visit our guide on native advertising.
Offsite retail media extends the retailer's advertising capabilities beyond their owned properties by using first-party shopper data to target customers across external channels. Retailers partner with third-party publishers, social media platforms, streaming services, and programmatic ad exchanges to deliver targeted advertising while maintaining data privacy.
For instance, Kroger can use its shopper data to help brands target those same customers with ads on streaming TV services, news websites, or social media feeds. The customer never leaves their preferred content platform, but the ad targeting benefits from Kroger's knowledge of actual grocery purchase behavior.
This approach dramatically expands reach beyond the limitations of owned properties. Off-site retail media ad spend is expected to grow twice as fast as on-site spend through 2026, as retailers push past the constraints of their own traffic. In 2024, off-site ads accounted for about 18.5% of all US retail media ad spending, with that percentage climbing steadily.
Physical retail locations are becoming sophisticated advertising channels through digital screens, audio systems, interactive kiosks, and even smart shopping carts. Retailers are treating brick-and-mortar stores as the next major mass-media channel by deploying technology that delivers targeted messaging at the literal point of sale.
In-store formats include digital endcap displays and aisle screens showing product videos and promotions, electronic shelf labels that display dynamic pricing and offers, in-store audio announcements with sponsored messages, and checkout screen advertising that captures attention during the payment process. Some retailers even place ads on screens in parking lots or at fuel pumps in their gas stations.
While currently a smaller portion of total retail media spend, in-store advertising is accelerating. U.S. in-store retail media ad spend is projected to rise from approximately $0.37 billion in 2024 to over $1.0 billion by 2028. This growth reflects both retailer investment in digital infrastructure and advertiser recognition that physical stores remain crucial shopping venues.
💡 For insights into how video advertising works across retail channels, including in-store applications, read about OTT advertising strategies.
A handful of heavyweight retailers anchor retail media, each with distinct data, formats, and reach. Knowing their strengths helps brands put budgets where they’ll work hardest.
Beyond these major networks, numerous other retailers operate significant media businesses, including Home Depot, Macy's Media Network, Albertsons, and Best Buy Ads. Even non-retail companies in travel and finance are launching commerce media networks, with Marriott and Expedia offering ad placements using their customer data. The retail media arena continues expanding as any company with consumer data and touchpoints considers becoming an ad publisher.
💡 For a comparison of different advertising formats and when to deploy them across retail media channels, see Native ads vs. display ads and when to use each.
Retail media platforms deliver compelling advantages for both advertisers seeking better campaign performance and retailers looking to diversify revenue. These benefits explain the channel's explosive growth.
Retail media networks provide advertisers with privacy-compliant access to retailers' first-party customer data, including purchase history, demographics, and loyalty membership information. In an era of disappearing third-party cookies, this wealth of shopper data proves incredibly valuable.
Brands can target based on actual purchase behavior rather than inferred interests. A beauty brand might reach "frequent beauty buyers" on a retailer's site using loyalty program data, creating precision impossible with open web advertising.
⚡ Survey data shows that 58% of U.S. ad buyers prioritize first-party data partnerships in 2025, reflecting the strategic importance of retail media relationships.
This data access enables better ad relevance and personalization, leading to more effective campaigns. Shoppers receive ads aligned with their demonstrated interests, improving both user experience and conversion rates.
Retailer data allows ads to be finely tuned to individual shopper interests and past behaviors, creating more personalized experiences than broad-based advertising can achieve. For consumers, retail media ads often feel more like helpful product recommendations than intrusive advertising, especially when integrated naturally into e-commerce sites.
A shopper who frequently purchases baby products might see tailored ads for new infant care items, while someone with a history of buying organic foods could receive promotions for premium organic brands.
⚡ Research indicates that 51% of brands and agencies cite data-driven targeting and personalization as a leading opportunity when using connected TV in retail media campaigns.
Perhaps the most significant advantage of retail media is the ability to directly measure advertising impact on sales. Retailers tie ad impressions to transactions using customer data, providing brands with granular attribution that other channels struggle to offer.
This closed-loop reporting delivers clear visibility into metrics like sales lift, conversion rate, and incremental revenue from campaigns. Brands can justify ad spend and optimize with real sales data rather than proxy metrics like clicks or impressions. As mentioned previously, 71% of retailers consider their networks very or extremely effective at conducting closed-loop measurement for brands.
Retail media ads reach shoppers at the point of sale or discovery, benefiting from exceptionally high purchase intent. Consumers on a retail site or in a store are actively looking to buy, making ads served in these environments more likely to convert.
A sponsored product ad on a retailer's site can directly lead to an instant sale, producing more tangible outcomes than general display ads on random websites. This proximity to purchase typically translates to higher return on ad spend, with brands often seeing strong ROI that justifies shifting budgets from less accountable channels.
For retailers operating these networks, retail media provides lucrative monetization beyond core retail sales. Essentially, it transforms retailers into media companies while maintaining their primary business.
Advertising revenue carries much higher profit margins than merchandise sales. As mentioned earlier, retailers operating RMNs often see profit margins above 50% on advertising revenue, extremely high compared to typical retail product margins. A grocery chain can generate substantial high-margin income by selling ad space to cereal brands targeting its shoppers.
Additionally, retail media can increase basket size and cross-sell by promoting related items, thereby lifting overall sales per customer. The advertising business strengthens the retailer's bottom line while enhancing the shopper's journey with relevant suggestions.
💡 For more on how streaming TV advertising integrates with retail media strategies, explore streaming TV advertising.
⚡ The profit margins on retail media often exceed 50%, turning traditional low-margin retail businesses into high-margin media enterprises without abandoning their core commerce operations.
Despite rapid growth and enthusiasm, retail media platforms face significant obstacles that both retailers and advertisers must address.
Each retailer's media network operates largely as a walled garden where data stays contained and campaigns run in isolated platforms. Advertisers wanting to reach across multiple retailers must manage numerous separate RMNs, each with distinct systems and reporting.
⚡ Survey data reveals that 45% of advertisers cite the sheer number of retail media networks they must manage as the biggest challenge.
The typical brand now works with four to six different RMNs simultaneously, creating operational complexity. This fragmentation leads to inefficiencies and inconsistent performance data.
Many advertisers hesitate to add more networks. In fact, 44% of advertisers said they did not plan to increase the number of RMNs they work with in the next two years, likely because they're overwhelmed. The walled-garden nature also prevents unified cross-platform frequency management and coordinated messaging across retailers.
💡 Understanding how walled gardens impact digital advertising more broadly helps contextualize this challenge. Read more at Walled gardens: the hidden cost for digital advertisers.
The most popular retail media networks have become highly competitive marketplaces where ad inventory can be expensive, especially for premium placements. Larger brands with substantial budgets often outbid smaller ones, squeezing out small and mid-sized businesses.
A major CPG can lock up top-of-search placements, squeezing the room for challengers. The math is unforgiving: on Amazon, page-one results capture at least 80% of clicks, and the first three listings soak up at least 60% of those. In auctions where prime positions cost more, incumbents with deeper budgets command the lion’s share of shopper attention, leaving smaller brands to compete over lower-visibility inventory.
Additionally, retailers often impose strict rules and fees, including minimum spend requirements and specific creative specifications, creating barriers for smaller advertisers. High entry costs mean smaller brands risk being left behind as big brands consolidate dominance on retail media platforms.
Metrics and reporting standards vary widely across different retail media networks, making apples-to-apples evaluation difficult. One network might calculate return on ad spend one way while another uses different attribution windows or defines impressions differently.
The Interactive Advertising Bureau has noted that inconsistent measurement and lack of transparency around attribution windows and viewability hinder advertisers' ability to compare performance. Moreover, real-time data access remains rare, with only 23% of retailers sharing campaign data with advertisers in real time. Most provide it only post-campaign, hampering optimization.
Advertisers are calling for industry-wide standards and better third-party verification. The retail media space remains in flux on measurement practices, forcing marketers to piece together insights from each platform.
An inherent tension exists between monetizing every available space with ads and maintaining quality shopping experiences. If a retailer's site or app becomes cluttered with advertising, it frustrates customers and deters shopping.
Many retailers exercise caution with ad load, limiting the number of sponsored results on the first page or ensuring on-site ads don't slow page performance. Research across the US and Europe found brands complaining about on-site ad space limitations, as retailers can only show so many ads without harming the experience.
If too few ad slots are available to preserve user experience, that drives up competition and cost for those slots. Additionally, if ads are irrelevant or poorly integrated, they can hinder the shopping experience, turning consumers away. Retailers must carefully vet ad content and format while maintaining shopper trust and satisfaction.
💡 For broader context on retail marketing strategies that balance customer experience with commercial objectives, see Retail digital marketing strategies for 2026: driving growth in a digital-first world.
Looking ahead, retail media is positioned for continued rapid evolution. Several key trends will shape the landscape through 2026 based on recent data and expert analysis.
Retail media networks are increasingly partnering with connected TV and streaming platforms to extend reach into living rooms. This convergence allows brands to use retailer data to target and measure ads on TV content, effectively combining high-intent shopper data with big-screen viewing.
For example, Walmart partnered with Disney in 2024 to let advertisers use Walmart's audience segments to buy ads on Disney's streaming services, with sales impact measured via clean rooms. Such collaborations provide more shoppable ad options on TV and clearer attribution.
Shoppable CTV ads, where viewers can see a product ad and easily purchase it via their phone or TV, are rising.
⚡ Data shows that 46% of consumers have made a purchase through shoppable media, with advertisers ramping up spend on these formats.
Expect more retail media-driven ads on streaming networks, interactive TV ads tied to retailer inventories, and possibly retailers launching their own streaming content.
💡 For deeper insights into connected TV advertising within retail media contexts, visit connected TV advertising.
The use of artificial intelligence and machine learning in retail media will deepen significantly. AI can optimize ad placements, bidding, and creative personalization in real-time.
⚡ Currently, only 40% of marketers consider their organization highly proficient in AI for marketing in 2025, indicating substantial room for growth.
Going into 2026, retailers will deploy AI to better predict shopper behavior and serve ultra-tailored ads. Dynamic creative might change messaging based on a shopper's profile or current cart contents. Generative AI could automatically create ad variations or customize on-site content for each user.
AI will drive more one-to-one personalization in retail media, improving relevance and boosting conversion rates. As complexity grows with more ad formats and data points, AI-driven tools become essential for managing and optimizing campaigns. Overall, AI and automation will make retail media buying more efficient and effective, enhancing both targeting and measurement.
💡 To explore how AI capabilities are being integrated into advertising platforms, learn about Smart Supply— an AI-powered curation tool that uses machine learning and historical data to eliminate inventory bias and optimize programmatic supply paths based on your specific KPIs.
The integration of retail media networks with the broader programmatic advertising ecosystem is accelerating. Rather than remaining isolated platforms, RMNs are opening up via APIs and partnerships so advertisers can buy retail media inventory through familiar programmatic channels while using retailer data for targeting.
For example, Walmart's DSP built with The Trade Desk allows programmatic access to Walmart audiences off-site. In 2024-25, partnerships emerged between retailers and ad tech firms, DSPs, and social/CTV platforms to extend their networks. Media buyers increasingly pursue full-funnel strategies across programmatic, CTV, and social using retail data.
By 2026, expect more retailers to integrate their data with open ad exchanges or preferred DSPs, enabling brands to plan retail media alongside other channels. This could mean more real-time bidding on retailer ad space and unified dashboards managing campaigns across multiple retail sites.
A notable trend involves retailers increasingly acting like media publishers, blending content and commerce to attract both consumers and ad dollars. Retailers are launching content platforms from editorial content and product guides to live shopping streams and retail-centric media productions, creating more advertising opportunities and engaging shoppers beyond transactional visits.
Some large retailers operate online magazines or recipe hubs that carry advertising, while others partner with media companies to produce shoppable content. Even companies like Marriott in hospitality or Klarna in payments are building media networks, capitalizing on captive audiences in their ecosystems.
By 2026, expect more non-traditional players joining and traditional retailers producing richer content to keep consumers on their sites longer. A home improvement retailer might run a DIY content portal or YouTube channel with sponsored tutorials, integrating product ads within that content. Retail media networks are making retailers into media owners with serious commercial influence, blurring the lines between retailer and publisher.
As data privacy remains paramount, secure data collaboration methods like data clean rooms are becoming standard in retail media. Clean rooms allow retailers and advertisers to share and match data in a privacy-compliant way, attributing ad exposures to purchases without leaking personal information.
⚡ In 2025, nearly 66% of organizations were using data clean rooms in some form for retail media.
Going into 2026, the focus shifts to making clean room integration seamless, embedding them into campaign workflows for always-on measurement and audience insights.
Retail media networks will likely offer built-in clean room solutions for advertisers, allowing brands to upload customer data to compare with retailer data and find overlaps without violating privacy. This improves multi-touch attribution, answering questions like whether a TV ad plus an on-site ad both contributed to a sale. Clean rooms will support advanced targeting such as creating custom audience segments combining brand and retailer insights.
By 2026, expect clean rooms to be a norm in retail media deals, enabling privacy-first measurement and data partnerships. This ensures that even as third-party cookies disappear, retailers and brands can still collaborate on data safely.
💡 For insights into how AI is shaping programmatic buying within privacy-first frameworks, read AI in DSPs: How artificial intelligence transforms programmatic buying.
⚡ Privacy-enhancing technologies like data clean rooms are not optional add-ons but foundational infrastructure for retail media's next phase, enabling measurement and collaboration without compromising consumer trust.
Retail media networks have established themselves as an essential channel for modern advertisers, combining the targeting precision of first-party data with the attribution certainty of closed-loop measurement. For brands, the opportunity is clear: reach high-intent shoppers at the moment of purchase decision and prove exactly how advertising drives sales.
The retailers winning in this space will balance monetization with user experience, invest in technology infrastructure that makes campaigns easy to execute, and prioritize transparency in measurement. For brands, success requires treating retail media as a distinct channel with unique characteristics, not simply another place to run display ads.
If you’d like to turn these insights into a plan that fits your budget, reach out to AI Digital; we’ll design the channel mix, set the right tests, and build a measurement framework you can rely on.
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Inefficiency
Description
Use case
Description of use case
Examples of companies using AI
Ease of implementation
Impact
Audience segmentation and insights
Identify and categorize audience groups based on behaviors, preferences, and characteristics
Automated ad campaigns
Automate ad creation, placement, and optimization across various platforms
Brand sentiment tracking
Monitor and analyze public opinion about a brand across multiple channels in real time
Campaign strategy optimization
Analyze data to predict optimal campaign approaches, channels, and timing
Content strategy
Generate content ideas, predict performance, and optimize distribution strategies
Personalization strategy development
Create tailored messaging and experiences for consumers at scale
Retail media is the broad category of advertising that occurs within retail environments or using retail data, encompassing any ads served on retailer properties or using retailer insights. Retail media networks specifically refer to the structured platforms and technology that retailers build to sell this advertising inventory systematically. Think of retail media as the concept and retail media networks as the operational infrastructure that makes it scalable.
Amazon Ads is the biggest retail media network, commanding approximately 75% of U.S. retail media ad share. Amazon's dominance stems from its massive scale of customer transactions, decades of accumulated purchase data, and sophisticated advertising technology spanning search, display, video, and programmatic channels. Walmart Connect ranks second, leveraging both digital properties and extensive physical store presence.
Consumer packaged goods (CPG) brands benefit most significantly because they sell products through the retailers operating these networks, enabling direct sales attribution. Beauty, grocery, household products, and health brands find particular value. However, retail media increasingly accommodates non-endemic brands (those not sold by the retailer), such as automotive companies advertising on home improvement retailer networks or financial services promoting on grocery platforms.
Retail media network experience refers to how effectively a platform serves both advertisers and shoppers. For advertisers, this includes ease of campaign setup, quality of targeting options, transparency of reporting, and responsiveness of support teams. For shoppers, it means encountering relevant, non-intrusive ads that enhance rather than detract from the shopping journey. The best retail media experiences balance advertiser objectives with consumer satisfaction.
RMNs measure ROI through closed-loop attribution that directly connects ad exposures to purchase transactions. Retailers match customer IDs from ad impressions to the same customers' purchase records, calculating metrics like return on ad spend, incremental sales, conversion rate, and cost per acquisition. This measurement leverages the retailer's first-party data and works for both online and in-store purchases when loyalty programs connect the two.
The top retail media networks in 2026 include Amazon Ads (largest by far), Walmart Connect (second with omnichannel strength), Target's Roundel (known for brand partnerships), Instacart Ads (grocery delivery focus), Kroger Precision Marketing (loyalty data depth), and eBay Ads (marketplace specialization). Other significant players include Home Depot, Best Buy, CVS Media Exchange, and emerging commerce media networks from travel and hospitality brands.
RMNs offer superior purchase intent and attribution compared to Google and Meta because they reach shoppers actively making purchase decisions and can directly measure sales impact. However, Google and Meta provide broader reach and more sophisticated creative formats. Google excels at search intent across the entire web, while Meta offers unmatched social targeting and creative flexibility. The most effective strategies often combine all three: using Google and Meta for awareness and consideration, then RMNs for conversion and sales measurement. Together, they're forming a new advertising structure where Amazon joins Google and Meta in a "triopoly" of digital advertising dominance.
