Retail Media Networks Are the New Advertising Frontier

Definitions

A retail media network (RMN) is an advertising infrastructure that comprises a collection of digital channels (e.g., websites, apps) that are offered by a retail company to third-party brands for their various advertising purposes.

Another benefit of using RMNs is access to first-party insights rather than third-party insights, which can help better inform the brand’s marketing campaigns. Beyond insights, RMNs can also help brands better link their ad spend to conversion.

The Digital Counterpart to In-Store Ads

Amazon and Walmart dominate the online retail media segment, offering a breadth of consumer goods directly and via third-party suppliers. As early entrants, they have grown organically and through significant advertising investments. Amazon Prime members number over 201M in the U.S. alone (as of Q4 2025), spending an average of $1,400 annually, with nearly 90% of all shoppers choosing Amazon without looking elsewhere.

Retail media networks (RMN) offer the additional benefit of being a “store-within-a-store,” creating a place ripe for advertising to customers who already find themselves on a site with products they enjoy. Leveraging this advertising space has led to the growth of RMNs, which can offer third-party product advertising in a digital format.

RMNs drive increased brand awareness. According to Attentive’s 2025 Consumer Trends Report—which was based on a survey of 3,300 consumers conducted in January 2025—81% of consumers ignore irrelevant marketing messages entirely, while 96% say they are likely to purchase when brands send personalized messages. In addition, today there are more than 200 named retail media networks globally, with brands running campaigns across an average of six to nine networks.

RMN advertising can reach customers at every step of their buying journey to recommend new products and increase existing product sales. Retailers leverage buyer journey insights, tracking them across the marketplace and use this data to offer valuable products.

Amazon Ads reached $60 billion in ad revenue in 2025 and remained the global retail media market leader. In the U.S., Amazon and Walmart together are estimated to absorb over 84% of retail media budgets. However, the RMN model has prompted competitors to enter the market, including Best Buy, Dollar Tree, Kohl’s, Lowe’s and now more than 200 named networks spanning grocery, specialty retail and marketplace categories.

The RMN model is attractive due to high margins, with retail advertisers reinvesting these profits to build technology infrastructure, lower prices and enhance the customer experience. Retail forecasters anticipate the U.S. Retail Media Network market was expected to reach $62 billion in 2025—already surpassing earlier projections—and is projected to grow further to $69.33 billion in 2026.

Retail media networks offer advertisers a unique opportunity to reach highly targeted audiences and drive sales, while also providing measurable results and cost-effective advertising options. Instead of relying solely on product sales, retailers can now generate additional revenue by allowing brands to place targeted advertising on their platforms.

RMNs offer several advantages to advertisers, including:

• Targeted Advertising: RMNs enable retailers to use their first-party shopper data to offer highly targeted options to advertisers. Advertisers can leverage consumer data collected by the retailer to target their ads to specific demographics, interests, behaviors and purchase history with the right message—increasing the effectiveness of their advertising campaigns.
• Brand Awareness: Advertising on RMNs can help advertisers increase their brand visibility and awareness among consumers. By advertising on the retailer’s website or mobile app, advertisers can reach consumers when they are actively browsing products and considering making a purchase.
• Increased Profitability: RMNs can drive sales for advertisers by placing their ads in highly visible areas on the retailer’s website or app. Some brands have seen a return of around 154% for every $1 spent on retail media campaigns, driven by precision targeting and first-party shopper data. This can increase the likelihood that consumers will click on the ad and make a purchase.
• Improved Customer Experience: By displaying relevant ads that match the interests and needs of the shopper, RMNs can enhance the customer experience and create a more personalized shopping experience for the shopper.

Facing Potential Retail Media Obstacles

While there are many benefits of partnering with RMNs, generating increased revenue is number one. Retailers can gain revenue through these ad channels via pay-per-click advertising, sponsored product listings and display advertising.

While the RMN industry is experiencing significant growth and holds tremendous potential for profitability, it is faced with several obstacles that must be addressed in order to sustain continued success.

1. Privacy Concerns: As the use of data to personalize and target ads becomes more prevalent, consumers are becoming more concerned about their privacy. This has led to increased scrutiny of data collection and usage practices.
2. Competition: As more retailers continue to enter the RMN arena, the competition for advertising dollars will become more intense. In 2025, three-quarters of advertisers said they planned to increase retail media spending—intensifying competition for premium inventory and driving renewed focus on standardization. This could lead to consolidation within the industry or the development of new revenue streams.
3. Measurement and Standardization: The bigger industry challenge has shifted to measurement fragmentation. Without consistent metrics across networks, advertisers struggle to compare performance or optimize spend, making standardization a primary barrier to continued growth. The Interactive Advertising Bureau (IAB) released its first Retail Media Measurement Guidelines in 2024, establishing common definitions for impressions, attribution and reporting (though adoption is still underway).

The RMN industry is poised for growth, but it will need to navigate these obstacles to continue to be successful. Retailers that can develop effective strategies to overcome these challenges will be well-positioned to thrive in the years to come.