Retail media is no longer an emerging channel—it's the fastest-growing force in digital advertising. Projected to hit $60 billion in 2025 and $100 billion by 2028, retail media networks have become essential for brands reaching consumers at the point of purchase.
What makes this growth possible? First-party data from retailers and AI that transforms that data into precision advertising.
Consider: 75% of advertisers planned to increase retail media investments in 2025. Amazon's advertising revenue grew 19% year-over-year. Walmart Connect U.S. advertising grew 33%—six times faster than overall company revenue. Retail media and membership fees now account for roughly one-third of Walmart's operating income.
Why Retail Media Matters
First-party data at scale. Retailers know what customers buy, browse, and consider. This purchase data—logged-in, consented, accurate—provides targeting precision that third-party cookies never could.
Closed-loop measurement. Unlike traditional advertising where attribution is estimated, retail media connects ad exposure directly to purchase. You can see exactly which ads drove which sales.
Point-of-purchase proximity. Retail media reaches consumers when they're actively shopping—not hoping they'll remember an ad later. Intent is immediate.
Omnichannel reach. Major retailers combine online advertising with in-store digital screens, connecting the entire purchase journey.
How AI Transforms Retail Media
Intelligent targeting leverages purchase data:
- •AI identifies purchase patterns and predicts future needs
- •Behavioral signals indicate purchase intent before search
- •Cross-category analysis reveals unexpected affinities
- •Suppression prevents wasting spend on recent purchasers
Automated optimization maximizes ROAS:
- •Real-time bidding adjusts to competitive dynamics
- •Budget allocation shifts to high-performing products
- •Daypart optimization targets peak shopping times
- •Placement optimization selects highest-converting positions
Inventory-aware advertising:
- •AI prevents promoting out-of-stock products
- •Geographic targeting aligns with local availability
- •Demand forecasting informs promotional timing
Major Retail Media Networks
Amazon Advertising
Dominates with $52+ billion in estimated ad revenue. Sponsored Products, Brands, and Display. Amazon DSP extends targeting to off-Amazon inventory. Amazon Marketing Cloud provides advanced analytics. Ads Agent automates campaign management with AI.
Walmart Connect
Highest cited ROI among retail media networks. Sponsored Search and Display on Walmart properties. DSP for off-site audience targeting. In-store digital screens and checkout advertising. Partnerships with TikTok, Roku, and Meta extend reach.
Target Roundel
Leverages Target Circle loyalty data for precision. Connected TV partnerships extend reach. In-store and pickup integration.
Additional networks:
- • Kroger Precision Marketing for grocery
- • CVS Media Exchange for health and wellness
- • Best Buy Ads for consumer electronics
- • Instacart Ads for grocery delivery
Implementation Framework
01Prioritize networks
Where do your products sell? Which networks offer your category? What's the audience overlap with your customers? Focus on networks where your products are sold and data quality is high.
02Establish foundation
Create accounts and configure tracking. Ensure product catalog accuracy and completeness. Define conversion events and attribution settings. Set up reporting and data collection.
03Launch sponsored products
Begin with sponsored product ads (highest intent). Target branded and category keywords. Enable automated bidding where available. Monitor ACoS and ROAS closely.
04Expand tactics
Add display for awareness and consideration. Implement DSP for off-site targeting. Test video where available. Explore in-store placements.
05Enable AI optimization
Use platform AI for bidding and targeting. Test automated campaign types. Implement inventory-aware pacing. Enable cross-network optimization tools.
The AI Future of Retail Media
Agentic campaign management will automate retail media operations. Amazon's Ads Agent represents this direction—AI that creates campaigns, recommends targeting, and optimizes automatically based on natural language objectives.
Cross-network optimization will coordinate spend across retail media networks. Rather than optimizing Amazon, Walmart, and Target separately, AI will allocate budget across networks for total portfolio performance.
Predictive commerce will anticipate purchase needs. AI analyzing purchase cycles will trigger advertising at optimal moments—reaching customers when replenishment is needed.
The bottom line: retail media has become advertising's third major platform after search and social. First-party purchase data provides targeting precision impossible elsewhere. Closed-loop measurement proves actual sales impact. And AI transforms retailer data into automated optimization at scale. For brands selling through major retailers, retail media isn't optional—it's essential infrastructure for reaching customers where they buy.
