Retail media is evolving. Here’s what you need to understand the power of retail media advertising in 2025.
2024 saw significant growth for the channel with brands vying for greater connection to customers when and where they shop. In the US, ad spending for retail media was predicted to grow 26% in 2024 – vastly outpacing the 12.6% growth predicted for overall digital ad spending. The medium is set to continue its trajectory in 2025, with projections estimating over $67 billion in ad spend, representing around 20% of total digital ad spending.
So, what is retail media, why is it growing at such a high rate, and how can you leverage it for your brand?
What is retail media?
Simply put, retail media is the marketing of retail goods to consumers at the point of purchase. This could be in-store or online and ranges from online ads to in-store signage, free samples, loyalty card offerings, coupons, and more.
Retail media is constantly iterating. In today’s landscape, the medium now includes a wide range of creative and engaging content from fleet media (vehicles decked out with digital out-of-home ads) and onsite videos like Walmart’s “RomCommcerce” Add to Heart which it shared with customers during the 2023 holiday season.
What is a retail media network?
When talking about retail media, the topic of retail media networks (RMNs) is never far behind. This is because RMNs are on the rise, evidenced by their now crucial role in modern programmatic advertising.
As online shopping and e-commerce continue their dominance, retailers are using their growing digital channels to further connect and engage with target audiences. RMNs are a great way to do this.
A retail media network is a digital channel (including websites, apps, or in-store digital signage) operated by a specific retailer that provides space for third-party brands to advertise. Most of the time, it is a digital retail store with the ability to sell ad space to third-party brands.
The difference between retail media and retail media networks is that retail media refers to advertising owned by a retailer or leveraging retailer data. Meanwhile, a retail media network refers to the specific, retailer-owned channels that serve retail media advertisements.
Types of retail media advertising
There are various retail media types and examples of it. According to the Interactive Advertising Bureau’s Retail Media Buyer’s Guide, there are three main types of retail media ad types:
On-site ads
On-site retail media ads are served on a retailer’s platform. These include display ads and search ads. These can also include sponsored products (promoted listings in search results) and sponsored brands (banner ads within search results).
Off-site ads
Off-site retail media ads leverage retailer data but are served through retail media partnerships.
In-store ads
In-store retail media ads are within brick-and-mortar stores. These can be signs, flyers, or audio ads.
The difference between offline retail media and online retail media
It’s important to understand the differences between offline and online retail media, as each medium presents unique advantages for retailers.
Online retail media
Online retail media refers to digital interactions via email, live chats, and social media. It can also refer to media hosted on e-commerce platforms. Audiences may or may not have also interacted with retailers in person.
Offline retail media
Offline retail media, on the other hand, is media shown to audiences inside a physical store. It is a facet of brick-and-mortar retail that uses in-person interactions to provide distinct experiences. It can also be used to creatively tell stories while helping customers easily find the right product. In-store marketing lets advertisers connect with customers and build engagement organically.
Benefits of retail media advertisement
There are several key benefits of retail media, namely that retail media networks connect advertisers to audiences directly at the point of sale. This close-to-purchase connection makes conversion more likely.
This isn’t the only benefit of retail media. Other benefits to consider are:
- Access to first-party data, including access to data from loyalty programs.
- The ability to build off of existing relationships between brands and retailers
- The opportunity to leverage rising e-commerce sales
- Access to a new revenue stream beyond traditional retail
Retail media has seen substantial growth in the past year and as the media continues its trajectory, it is likely to mature and change. In the coming years, the medium will likely evolve to bring even greater benefits to brands and advertisers.
How do you measure retail media success?
Like with all marketing, measurement is essential. Brands wanting to get the most out of their retail media investments need key performance indicators (KPIs) to understand what works and what doesn’t. KPIs can give guidance as the what platforms are working, which creatives are most effective, and where ad spend has the most impact. The following are criteria to define before setting out on your retail media journey.
What is your definition of an impression?
In digital advertising, IAB standards clearly define impressions as impressions that occur when an ad is displayed on a website, regardless of whether it is actually seen by a user. There are also standards for “viewable impressions,” which refer to ads that are seen by users.
Retail media poses for challenge for measuring impressions because some solutions don’t separate viewable impressions as a separate metric. Certain platforms may also only report on viewable impressions. It’s important to define for yourself which whether or not total impressions or only viewable impressions is important to your business and to evaluating the effectiveness of your campaigns.
How are clicks per impression counted?
In retail media, typically only one click is counted for each impression. This is true even when a customer clicks on an ad multiple times. While this rule may vary, it’s important to understand how clicks are being counted so that you can interpret your metrics correctly.
How are sales attributed?
You need accurate sales attribution to measure and understand the success of an ad campaign. Sales garnered through retail media can be attributed either to ad views or ad clicks.
Most of the time, view-based attribution is used for display ads and click-based attribution is applied to sponsored products. There are times, however, when advertisers may choose to attribute sales differently to best reflect their business goals. Take the time to think about how your sales are attributed so that you can more accurately assess campaign performance.
Does the solution filter bot activity?
Bot activity can heavily influence how you measure campaign performance. Some platforms effectively filter out bots so that your numbers are skewed by fake accounts, but others don’t. If you are unable to accurately filter out bot activity, then factor that into your assessments when interpreting data.
Takeaways for marketers dipping their toes in retail media:
- Retail media is becoming an essential tool for promoting products and services. By placing ads close to or at the point of sale, retail media networks connect with customers and increase conversions.
- This medium gives advertisers better access to first-party data, the ability to build off of existing relationships with brands, opportunities to leverage rising e-commerce sales, and access to a new revenue stream beyond traditional retail.
- As retailers expand their use of retail media, they also need to fully understand how retail media solutions measure and report key metrics. Effectively gauging the performance of your campaigns is critical to getting the most out of this critical retail opportunity.
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