Retail media may be the decade’s biggest advertising trend. Retailers are taking ownership of their advertising by creating media networks, and spend is exploding. Retailers are building out their digital presences, boosting in-store offerings, experimenting with streaming and media partnerships, creating their retail media strategy, and putting ads everywhere they can. 

What is retail media?

Retail media is digital advertising operated by retailers who act as media channels by publishing ads on their own assets or third-party publishers. It also includes media content powered by the retailer’s first-party shopper data.

Retail media is one of the largest and fastest-growing ad verticals in the US. Between 2016 and 2021, retail media ad spend increased from $1 billion to $30 billion, making its growth to $30 billion faster than video (9 years), social networks (11 years), and search (at least 15 years), according to EMARKETER’s Retail Media Explainer report.

Retail media ad spend

US omnichannel retail media ad spend will total $59.98 billion in 2024, a growth of 28.6% YoY, according to an October 2023 EMARKETER forecast.

  • Of that spend, $59.61 billion will come from digital and $370 million from in-store.
  • US retail media ad spend is growing steadily and will make up more than one-fifth (21.8%) of total US media ad spend by 2027.
  • Retail media benefits from growth in both retail ecommerce and digital advertising, as well as an increase in connected TV (CTV) advertising.
eMarketer 2024 US retail media ad spending forecast
A chart showing US retail media ad spending forecast, 2023 to 2027. (Subscribers only)

Amazon dominates the US retail media market, accounting for 74.2% of US retail media ad spend in 2024, according to EMARKETER’s October 2023 forecast. While Amazon has been losing share, it will continue to be the biggest player in retail media advertising.

Where are retail media ad dollars coming from?

Growth in digital ad spend and shifts from traditional ad spend make up a fair portion of retail media ad dollars. But a lot of the ad money also comes from existing retail revenues, including trade budgets, sponsorships, events, and promotions.

What are the types of retail media advertisements?

While retail media is often associated with search ads, there is a lot of diversity in the format. Retail media advertising can be endemic or nonendemic, online or in-store, and on-site or off-site. As advertisers increasingly understand the value of first-party shopper data, retail media is expanding to CTV, social media, and out-of-home (OOH) formats.

Search

Search has the largest share of US retail media ad spend (61.7% in 2024), but it is losing share to display, according to an October 2023 EMARKETER forecast.

retail media will account for most search ad spending growth by 2027
Retail media will account for most search ad spending growth by 2027.

Display 

Display will make up 38.3% of US retail media ad spend, but that figure will grow to 40.3% by the end of 2027, according to an October 2023 EMARKETER forecast.

On-site

On-site retail media advertising refers to any ad that appears on a retailer’s website or app. These advertisements are divided between search and display. Examples of on-site retail media advertising include:

  • Sponsored products: Listings within search for relevant products
  • Sponsored brands: Banner ads within search results
  • Display ads: Banner ads that follow customers across the website, like on the homepage

Off-site

Off-site retail media advertising refers to advertisements that leverage retailer data but are not served in places owned by the retailer. Instead, they are served through partnerships. Off-site retail media ad spend will account for 18.5% of US retail media ad spend in 2024, according to an October 2023 EMARKETER forecast, and that share is growing as partnerships and formats expand.

Examples of off-site retail media advertising include third-party websites, apps, audio, digital video, digital OOH (DOOH), and in-game advertisements.

CTV

CTV is one of the retail media formats to watch, especially now that Amazon is serving ads on its Prime Video service.

  • Retail media CTV ad spend will total $3.64 billion in 2024, according to EMARKETER’s October 2023 forecast.
  • Retail media advertisements are served on CTV either through owned platforms, like Amazon Prime Video, or through partnerships, like the one between Walmart and Roku.
  • Leveraging retail media for CTV results in timely, engaging, and precisely targeted ads.
  • Because CTV advertising can be shoppable, or have calls to action that allow viewers to purchase, these advertisements go beyond traditional TV ads’ brand marketing capabilities by shortening the path to purchase.
emarketer 2024 retail media ctv ad spending forecast
Our 2024 retail media CTV ad spending forecast is 143% higher than it was in spring 2023.

In-store

While in-store ads will account for just 0.6% of retail media ad spend in 2024, that share is primed to grow. In-store retail media ads include product displays, digital signage, and video screens in brick-and mortar stores. While smart shopping carts aren’t common yet in physical stores, they also have vast ad potential as adoption increases.

Retailer mobile apps are an omnichannel ad opportunity for in-store shoppers, with the ability to serve location-based push notifications and deals.

There’s also a physical retail media opportunity outside of the store, through DOOH ads in parking lots; at charging stations; and near buy online, pick up in-store parking spots.

What are the benefits of retail media?

Retail media advertising is an asset to brands because of its first-party data, proximity to purchase, and potential for partnerships. For retailers, retail media can offer new revenue streams. 

First-party data

As legacy identifiers like third-party cookies erode, first-party shopper data is becoming an increasingly vital tool for advertisers. This data is powerful because it tells an explicit story about what a shopper buys and what they may be inclined to buy in the future.

Case study: A shopper who is buying baby food is likely to continue buying baby food, presenting an ad opportunity for a host of brands. That shopper is also likely to buy diapers now and school supplies several years down the road, extending the value of that purchase data.

Proximity to point of sale

Advertisers are under pressure to prove the value of their spend. Because retail media sits at or close to the point of purchase, it’s easy for advertisers to attribute ROI to specific campaigns, or even one specific advertisement.

Case study: A shopper who searches Walmart’s website for baby food may be inclined to click on an ad for a specific brand of baby food.

Partnerships

Retail media data can be useful outside of the store and beyond a retailer’s website. As retail media networks make more partnerships, advertisers can leverage the rich data to serve well-targeted ads.

Case study: A shopper who has previously purchased baby food at Walmart may respond to a shoppable ad for diapers or even kids programming served to them on a Roku TV through a Walmart partnership.

For advertisers, retail media sits at or close to the point of purchase and gives visibility into retailers’ rich first-party data, helping reach relevant audiences. This is even more valuable because legacy identifiers have significantly eroded and are expected to continue to do so. Companies that support retail media through programmatic ad tech, measurement, and other services are eager to tap into an opportunity for targeted advertising.

What are the drawbacks of retail media?

Retail media is not a perfect channel. It comes with several drawbacks, most surrounding a lack of standardization and measurement.

Standardization

Retail media networks do not have a standard for ad measurement or for ad formats, and they probably won’t get standardization anytime soon. Standardization of measurement could unlock even more retail media ad spend and revolutionize retail media. Several groups, including the Interactive Advertising Bureau, have proposed standardization models. But for now, the problem remains unsolved.

Number of networks

Without measurement standardization, it’s difficult to compare smaller retail media networks. Some 57% of US advertisers say they’re willing to work with a maximum of four retail data partners, according to The Trade Desk Intelligence. But there are so many smaller retail media networks, it’s difficult to keep track.

Advertiser perceptions of retail media

While many advertisers are bullish on retail media, some have voiced concerns that the ad channel feels like a pay-to-play tax, where brands need to advertise for their products to be seen by consumers. Retailers also view retail media as a lower-funnel tactic, and many have yet to engage in its brand marketing potential.

How are retail media ads bought and sold?

Retail media ads can be bought in a variety of ways, per EMARKETER’s Retail Media Explainer report:

  • Directly through a retailer with a media network
  • Through buy-side platforms that tap into multiple retail properties via programmatic exchanges
  • Through companies that aren’t strictly retailers but sell goods or services online
  • Through companies that facilitate digital commerce via services such as food and grocery delivery
paths to purchasing retail media
An infographic showing the retail media ad buying process. (Subscribers only)

How does retail media measurement work?

Retail media measurement (subscribers only) is a persisting challenge. Since retail media networks exist as walled gardens (i.e., ad ecosystems that don’t share data), it can be difficult to compare retail media networks. Standardization across networks could unlock further ad spend, but despite efforts, that still seems like a distant goal.

Retail media ad performance can be measured like any other ad. Retailers own their own media networks, and in turn own their own metrics and measurement. Common metrics include return on ad spend or ROI. But a retail media campaign’s ability to drive incremental lift is really where advertisers need to focus. In fact, 37% of retail media decision-makers in North America say the inability to prove incrementality could slow investment growth to retail media, according to a January 2023 report from Skai and BWG Strategy.

Brands can work with ad tech companies or through homegrown tools to develop a holistic view of all retail media campaigns in order to understand where they need to invest.

Trends in retail media

The digitization of the store: In-store retail media opportunities are multiplying, as everything from end-cap aisle displays and cooler doors to shopping carts and gas pumps get digital ads.

A push toward standardization: Many retail media networks and media companies have called for standardization across networks. This could still be a ways away, but expect to see more organizations addressing its urgency and proposing frameworks.

Smaller players boost networks: Smaller retailers are entering the retail media game. That said, some will not be able to scale their businesses as needed.

More off-site partnerships: To remain competitive, retail media networks, streaming companies, and social media networks have been teaming up in order to boost off-site ads.

Notable social, retail and digital ad partnerships in 2023
A chart showing notable social, retail, and digital advertising partnerships, 2023.

Rise of commerce media: Other companies that aren’t strictly retailers like travel and payments companies are building out their own media networks.

Agencies build out their business: Retail media is becoming a must-have feature for agencies that need to know how to build and measure retail media campaigns.

AI everywhere: AI is an increasingly important feature for retail media networks, both in terms of targeting ads and in developing creative.

Who are the key players and platforms in retail media?

Retail media spans a broad and growing spectrum of merchants, including:

  • Digital-first operations (Amazon, Wayfair)
  • Marketplaces (eBay, Amazon)
  • Mass merchandisers (Walmart, Target, Best Buy)
  • Discount warehouses (Costco Wholesale)
  • Grocers (The Kroger Co.)
  • Department stores (Macy’s)
  • Category specialists (The Home Depot)
  • Delivery services that support retailers (Instacart)

Third-party platforms like The Trade Desk and Criteo are also important as retailers use them to support their operations, although some retailers like Amazon have brought these services in-house.

How does commerce media differ?

Commerce media refers to media channels that are bought and sold on platforms that involve transactions and commerce but are not strictly retailers. Commerce media includes but is not limited to retail media. Examples of commerce media include ride-sharing platforms like Uber and Lyft and hotels like Marriott International.