By Retail Brew Staff
less than 3 min read
Definition:
Retailers that have a dedicated business of selling ads on their digital properties and in-store are dubbed retail media networks (RMNs). Advertising revenue earned through RMNs is quickly becoming a moneymaker for retailers. From a consumer standpoint, think of it as retailers ruining a perfectly happy shopping experience by serving shoppers ads across aisles, on the app, and everywhere in between.
The origins of retail media
Retail media, as a concept, emerged with the rise of e-commerce, specifically marked by the release of Amazon’s ads platform in 2012. Retail media has changed the game within digital advertising by creating targeted marketing channels for brands directly on retailer platforms. It enables advertisers to drop product ads through sponsored listings that appear prominently in retailer search results and category pages, typically to target shoppers with discounts and deals, often customized for them. Beyond sponsored product placements, retail media offers display ads, featuring things like banner ads, that show up when consumers are close to hitting that purchase button.
Amazon is still the top retailer with a massive ad business that covers roughly 75% of all retail media ads. But rivals have also begun reporting biggish numbers relatively speaking. Take Walmart Connect, which grew quickly in 2024, and posted 24% growth in the US, in Q4. Target’s Roundel retail media network generated $649 million in advertising revenue in 2024.
Retail media in context
Retail media is not only changing the grocery shopping experience, even pharmacies are turning their online and in-store footprint into advertising billboards. Tech giants like Microsoft are coming at retail media with a fresh set of eyes, while niche players like Pinterest are finally turning a corner, after laying the groundwork for its ads business. Fair warning though: Intense competition is resulting in less money to be made for each company.
