Katie Bishop
Content Director
Retail Media is exploding, set to outpace TV advertising. Discover what's fueling this growth and the strategies to navigate its challenges.
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Introduction
Retail media is no longer just a line item; it's a seismic shift in the advertising world. This isn't just incremental growth; we're witnessing a complete reordering of marketing priorities, fueled by the power of first-party data and the relentless pursuit of measurable results.
The numbers are staggering, but they only tell part of the story. For brands, the rapid expansion of retail media networks (RMNs) presents a massive opportunity, but also a complex new reality filled with challenges in measurement, standardization, and strategy. Understanding this new domain is critical for anyone looking to win at the digital shelf and beyond.
Key Takeaways
What's Fueling the Explosive Retail Media Networks Growth?
The incredible momentum behind retail media isn't happening in a vacuum. It's the result of a perfect storm of technological shifts, changing consumer behavior, and an urgent need for advertising that demonstrably works. Brands are flocking to these platforms for a few core reasons that fundamentally change the advertising game.
The Power of First-Party Data in a Cookieless World
Let's be direct: the slow death of the third-party cookie has sent shockwaves through the digital marketing world. For years, advertisers relied on these trackers to follow users across the web. That era is over.
Retailers, however, are sitting on a goldmine. They have direct access to massive amounts of first-party data—purchase history, browsing behavior, loyalty program information—all collected with customer consent. This allows brands to target shoppers with incredible precision based on actual buying habits, not just inferred interests. It's the difference between guessing who might want to buy your product and knowing who already buys similar items.
Closing the Loop: Connecting Ad Spend to Actual Sales
For decades, a huge challenge for marketers was proving that ad spend directly led to sales. You could measure clicks and impressions, but tying a specific ad view to an in-store or online purchase was notoriously difficult. This is what we call closing the loop.
Unprecedented Insight
RMNs solve this problem beautifully. Because the advertising and the transaction happen on the same platform, brands can see a direct line from ad exposure to purchase. This provides an unparalleled level of accountability. You're no longer just hoping your ads are working; you have the sales data to prove it, allowing for much smarter budget allocation and a better understanding of what drives real results.
Reaching Shoppers at the Point of Purchase
There is no better time to reach a customer than when they are actively shopping. Retail media allows brands to place their products directly in the digital aisles, influencing decisions at the most critical moment in the buying journey.
Whether it's a sponsored product listing at the top of a search result or a display ad on a category page, you're reaching consumers with high purchase intent. This is fundamentally different from traditional advertising, which often interrupts users when they're trying to do something else. Here, your ad is a welcome part of the shopping experience, helping customers discover products they might love. This is a core principle behind successful Conversion Rate Optimization (CRO); you meet the customer where they are, ready to act.
The Unprecedented Scale of the RMN Market
To say that the retail media market is growing is a massive understatement. We're witnessing a meteoric rise that is reshaping the entire advertising industry. The numbers aren't just big; they represent a fundamental transfer of power and budget from traditional channels to retailer-owned platforms.
Global Projections and Key Benchmarks
According to a GroupM report, global retail media revenue is projected to hit a staggering $176.9 billion in 2025. To put that in perspective, this growth means retail media will surpass the entire television advertising market—including both linear TV and streaming services—for the very first time. Think about that. The ads you see on Amazon, Walmart, and Kroger's websites will generate more revenue than all TV commercials combined.
This isn't just a future prediction; the momentum is already here. The Path to Purchase Institute's 2025 Trends Study revealed that a whopping 70% of companies are planning to increase their retail media budgets. This widespread commitment shows that brands are not just experimenting; they are going all-in, making RMNs a core part of their marketing strategy.
Table: RMN Growth vs. Other Channels
The velocity of this growth becomes even clearer when you compare it to other advertising channels. While social media and search continue to grow, the acceleration of retail media is in a class of its own.
Channel | Projected 2025 Status | Key Driver |
|---|---|---|
Retail Media Networks | Surpassing $176B; outpacing TV | First-party data & closed-loop attribution |
Connected TV (CTV) | Strong growth, but smaller base | Shift from linear TV viewing habits |
Traditional Social Media | Mature growth, facing signal loss | Community engagement |
Linear TV | Declining or flat | Cord-cutting and audience fragmentation |
A Global Phenomenon
While the US market, dominated by giants like Amazon and Walmart Connect, often gets the most attention, this growth is a worldwide trend. For instance, IAB Europe reported an impressive 22.2% growth in the European retail media market in 2024 alone. This shows that retailers across the globe are successfully building and scaling their own powerful advertising platforms.
Beyond Sponsored Products: The Evolution of RMNs
When people think of retail media, they often picture a simple sponsored product listing at the top of a search page. While that's a key component, the reality of today's RMNs is far more sophisticated. The leading networks are evolving into full-funnel marketing platforms, offering brands a diverse toolkit to reach consumers at every stage of their journey.
Moving Beyond the Digital Shelf
The influence of RMNs is no longer confined to the retailer's own website or app. They are extending their reach across the open web and even into the physical world, creating a truly omnichannel experience.
Off-Site Extensions
Many advanced RMNs now use their valuable first-party data to power off-site advertising. This means a brand can use a retailer's data to target high-value shoppers with display or video ads on completely different websites. For example, you could use Target's data to show an ad for your new snack food to a known grocery shopper while they're browsing a news site. It's a privacy-compliant way to extend your reach while maintaining targeting precision.
In-Store Digital Integration
The line between e-commerce and brick-and-mortar is blurring. RMNs are bringing digital advertising into the physical store through things like digital screens on coolers, interactive aisle displays, and even QR codes that link to online content. This connects the digital and physical shopping experience, allowing brands to reinforce their message right at the shelf.
From Lower Funnel to Full-Funnel Strategy
Initially, the primary use case for RMNs was to drive immediate conversions—a classic lower-funnel activity. But as Kantar's Barry Thomas noted to Marketing Week, some RMNs are now evolving into assets that can build brand equity and drive awareness.
Building Brand Equity
This is a crucial shift. Brands can now use RMNs for upper-funnel activities that weren't possible before. This includes things like:
Video Ads: Telling a brand story to shoppers browsing a relevant category.
Branded Storefronts: Creating a rich, immersive brand experience within the retailer's ecosystem.
Sampling Programs: Using purchase data to send product samples to high-potential customers.
By leveraging these tools, brands can do more than just capture existing demand; they can create it. This is how a startup can become a category leader, much like the journey of brands that utilize an eCommerce accelerator to scale their presence and impact on major platforms.
The Growing Pains: Top Challenges Brands Face Today
With such explosive growth comes a new set of complex challenges. The rapid rise of RMNs has created a fragmented and sometimes confusing environment for brands to navigate. While the opportunity is undeniable, the path to success is not without its hurdles. As Forbes aptly puts it, networks will need to launch a 'charm offensive' to win deeper trust from advertisers.
The Standardization Struggle
Perhaps the single biggest headache for brands is the profound lack of standardization across different retail media networks. Every retailer has built its own system, with its own metrics, its own ad formats, and its own reporting interface.
A Fragmented Ecosystem
This creates a massive operational burden. A marketing team has to learn the nuances of Amazon Ads, Walmart Connect, Kroger Precision Marketing, Roundel (Target), and dozens of others. This fragmentation makes it incredibly difficult to compare performance apples-to-apples across networks. It's like trying to fly five different types of planes with five different control panels. While industry bodies like the IAB have released measurement guidelines, their adoption remains inconsistent, creating ongoing frustration for advertisers.
Cracking the Measurement Code
Directly tied to the lack of standardization is the challenge of measurement. Brands are pouring money into these networks, but many feel they are operating in the dark, unable to get the transparent data they need to truly evaluate performance.
Lack of Transparency
As Marketing Week points out, a primary issue is that retailers often control which metrics they share. They can be selective about the data they provide, leaving advertisers with an incomplete picture. Brands want to see the good, the bad, and the ugly to make informed decisions, but many networks are hesitant to offer that level of transparency.
Inconsistent Metrics
What one network calls a 'view' or an 'impression' might be defined differently by another. The core problem is that ROAS (Return on Ad Spend) is often the only consistent metric, but it doesn't tell the whole story. It doesn't measure brand building, new customer acquisition, or the long-term value of a campaign.
Budget Allocation: Who Foots the Bill?
A surprising internal challenge that many brands face is figuring out who owns the retail media budget. As Adweek highlights, this isn't a simple question.
Historically, funds for in-store promotions and shelf space came from the brand's sales or shopper marketing teams as part of trade spend. But RMNs operate like digital media platforms, which traditionally fall under the marketing department's budget. This creates internal friction and debate over which P&L the spend should come from. Aligning these internal teams is a critical, and often overlooked, step for building a coherent RMN strategy.
Strategies for Success in a Crowded RMN Landscape
Navigating the challenges of the RMN boom requires a proactive and sophisticated approach. Brands that simply throw money at every available network without a clear strategy will see their returns diminish. Success comes from making deliberate choices, demanding more from partners, and aligning internal resources effectively.
Choosing the Right Network Partners
Not all RMNs are created equal. While giants like Amazon and Walmart are essential for many, a winning strategy often involves a diversified portfolio of network partners.
Beyond the Giants
Look for networks that offer unique access to your target audience. A specialty grocer's RMN might be perfect for a gourmet food brand, while a home improvement retailer's network is ideal for a tool company. The key is to align the retailer's shopper profile with your ideal customer. Don't just chase scale; chase relevance. A strong Direct Wholesale Partner relationship can provide deeper insights into which retail channels are most effective for your specific products.
Demanding Better Measurement
Brands hold more power than they think. As more dollars flow into RMNs, advertisers must collectively push for greater transparency and more meaningful metrics. It's time to move the conversation beyond a simple ROAS.
Pushing for Incrementality
The golden question is: did your ad campaign cause a sale that wouldn't have happened otherwise? This is the principle of incrementality. You should be asking your RMN partners for lift studies and control/exposed group testing to prove that your ad spend is actually driving incremental business, not just subsidizing sales that were already going to occur. It's a cornerstone of understanding true campaign value.
Aligning Internal Teams for Success
As we've discussed, the internal conflict over who 'owns' retail media can derail a program before it even starts. Success requires a unified front. Sales, marketing, and e-commerce teams must collaborate closely.
Create a centralized task force or center of excellence dedicated to RMN strategy. This group should be responsible for:
Unified Budgeting: Pooling funds from trade spend and marketing budgets for a more holistic approach.
Shared Goals: Defining success with metrics that matter to all teams, from sales lift to brand awareness.
Knowledge Sharing: Ensuring that learnings from one campaign or network are shared across the entire organization.
This alignment ensures that everyone is rowing in the same direction, maximizing the impact of your investment and leading to incredible outcomes, like those seen in our ZER06 case study where strategic alignment led to category leadership.
Table: Comparing Major Retail Media Networks
With so many RMNs to choose from, it can be helpful to see a high-level comparison of their offerings. Each platform has unique strengths, and the best choice depends entirely on your brand's specific goals, products, and target audience. The key is to match the network's capabilities to your strategic objectives.
This table provides a snapshot of some of the leading networks and what sets them apart. Note that capabilities are constantly evolving.
Network | Key Strength | Primary Audience | Measurement Focus |
|---|---|---|---|
Amazon Ads | Massive scale, sophisticated ad tools, DSP for off-site targeting. | Broad, high-intent online shoppers for virtually every category. | ROAS, ACOS (Advertising Cost of Sale), New-to-Brand Metrics. |
Walmart Connect | Unrivaled access to omnichannel grocery and general merchandise shoppers. Strong in-store data. | Value-conscious families, grocery shoppers (online and in-store). | Omnichannel ROAS, in-store lift, reach. |
Roundel (Target) | High-quality first-party data, strong brand safety, access to an affluent shopper base. | Younger families, design-conscious consumers, brand-loyal shoppers. | Lift analysis, brand perception studies, ROAS. |
Kroger Precision Marketing (KPM) | Deep loyalty card data from 60M+ households, precise CPG targeting. | US grocery shoppers, CPG brand focus. | Household penetration, incremental sales, loyalty metrics. |
Instacart Ads | Access to shoppers across hundreds of different retail banners on one platform. | Convenience-focused online grocery shoppers. | Impulse buys, category share, ROAS. |
This comparison illustrates why a one-size-fits-all approach doesn't work. A CPG brand might prioritize KPM for its granular grocery data, while a home goods brand might find more value with Roundel's audience. The goal is to build a complementary portfolio of RMNs that work together to achieve your business objectives.
The Next Frontier: What's Ahead for Retail Media?
The current growth is just the beginning. The next few years will see retail media mature, with new technologies and business practices reshaping the landscape once again. Brands that anticipate these changes will be best positioned to maintain their competitive edge.
The Push for a 'Charm Offensive'
As the market becomes more crowded, power will continue to shift from the networks to the advertisers. Forbes insightfully predicts a coming 'charm offensive' where RMNs will have to work harder to earn and keep advertiser trust.
We expect this to manifest as:
Greater Transparency: More networks will open up their data, providing deeper insights into what works and what doesn't.
Improved Self-Service Tools: Platforms will become more user-friendly, reducing the operational lift for marketing teams.
More Flexible Partnerships: RMNs will be more willing to collaborate on custom campaigns and measurement solutions.
AI and Automation's Role
Artificial intelligence and automation will become central to managing the complexity of RMN advertising. Managing bids, budgets, and creative across a dozen different networks is not scalable for human teams alone.
Predictive Analytics
Look for the rise of AI-powered tools that can predict which products will trend, recommend optimal budget allocations, and even generate ad copy. This will allow brands to move from reactive campaign management to proactive, data-driven strategy. Technology partners that aggregate ad buys, like Criteo and Vantage, will become more critical for managing this complexity.
The Rise of 'Have-Nots' vs. 'Haves'
Not every retailer will succeed in building a billion-dollar RMN. We will likely see a consolidation in the market, with a few large, sophisticated networks (the 'haves') controlling the majority of the ad spend. However, smaller, specialized retailers (the 'have-nots' in terms of scale) can still thrive by offering unique, high-value audiences that the giants can't reach. For brands, this means a tiered strategy will be essential—placing big bets with the major players while making tactical investments in niche networks that deliver outsized returns with specific demographics.
How Can Brands Truly Measure RMN Campaign Success?
This is the question every brand manager and performance marketer is asking. As investment in retail media networks grows, the pressure to demonstrate a clear and comprehensive return is immense. The key is to evolve your measurement framework beyond the easy, surface-level metrics and adopt a more holistic view of performance.
Look Beyond ROAS (Return on Ad Spend)
ROAS is important, but it's a deeply flawed metric when viewed in isolation. It tells you about efficiency, but it doesn't tell you about growth or long-term value. A high ROAS can be misleading if it's just capturing sales from existing, loyal customers. True success comes from driving sustainable growth, not just harvesting low-hanging fruit.
Key Performance Indicators (KPIs) to Track
To get a complete picture of your campaign's impact, you need a dashboard of KPIs that cover the full marketing funnel. Here are the metrics your team should be tracking:
New-to-Brand Customers
This is arguably the most important metric for growth. How many of your sales came from customers who have never purchased from your brand before? An RMN campaign that delivers a high percentage of new-to-brand customers is a powerful engine for expansion.
Category Share Growth
Are you growing faster than your competitors on the platform? Measuring your share of voice (impressions) and share of sales within a specific category can show whether your RMN investment is helping you win market share. It contextualizes your performance against the competition.
Halo Effect on Other Products
Often, advertising one product can lead to a sales lift for other items in your portfolio. This is the 'halo effect'. Sophisticated measurement should look at the total basket lift, not just the sales of the advertised ASIN. Are customers discovering your wider brand catalog as a result of your campaigns?
Leveraging Third-Party Aggregators
Given the fragmentation of the RMN space, many brands are turning to third-party technology partners. Platforms like Criteo, Pacvue, and Skai help by:
Aggregating Data: They pull data from multiple RMNs into a single dashboard, making cross-network comparison easier.
Automating Bidding: They use algorithms to optimize bids and budgets across platforms, saving time and improving performance.
While these tools add another cost, the efficiency and insight they provide can be invaluable for brands managing significant RMN spend. They help bring a layer of standardization to a non-standard world.
Conclusion
The era of retail media is here, and its growth is fundamentally reshaping the marketing landscape. We've moved beyond simple experimentation into a time of massive investment, driven by the unparalleled power of first-party data and the promise of closed-loop measurement. However, this boom has brought significant growing pains, primarily the critical challenges of fragmentation and a lack of standardized metrics.
The brands that will win in this new domain are the ones that adopt a sophisticated, strategic approach. They will need to look beyond ROAS, demand greater transparency from their partners, and build a measurement framework focused on true growth drivers like incrementality and new-to-brand customers. The opportunity is immense, but it requires a new level of diligence and strategic thinking.
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