In recent years, the way brands advertise to shoppers has changed. As more people shop online and use retailer apps, companies have started using new methods to show ads where customers are already browsing and buying.

Retail media advertising is one of these methods. It involves placing ads directly on retailer-owned platforms—like websites, mobile apps, or even digital screens inside physical stores. This is different from traditional ads that appear on unrelated sites or social media.

This article explains what retail media advertising is, how it works, and the types of advertising it includes. It also covers key examples and how it fits into the larger world of digital marketing.

What Is Retail Media Advertising

Retail media advertising is digital advertising where brands place ads on retailer-owned platforms such as websites, apps, and in-store displays to reach shoppers at the point of purchase.

These ads use the retailer's own data about shopping behavior and purchase history to target customers who are actively considering buying something. You might see these ads in product search results, on category pages, or on screens near checkout areas.

Unlike traditional digital ads that show up on random websites, retail media ads appear where people are already shopping. This makes them more relevant to what shoppers are looking for.

The system that manages these ads is called a "retail media network." This network helps advertisers use the retailer's customer data to show the right ads to the right people at the right time.

Retail media has grown alongside e-commerce. As more people shop online, retailers have turned their websites and apps into advertising spaces. This creates a new way for retailers to make money and for brands to reach potential customers.

Types Of Retail Media Advertising

Retail media advertising comes in three main types, each appearing in different places and reaching shoppers in unique ways.

1. On-Site Retail Media

On-site retail media includes ads that appear directly on a retailer's website or app. These are the most common type of retail media ads.

Examples include:

• Sponsored product listings in search results

• Banner ads on the homepage

• Display ads on product detail pages

When you search for "headphones" on Amazon and see certain products marked as "Sponsored," that's on-site retail media. These ads use the retail media platform to place products in front of shoppers who are actively looking for similar items.

2. Off-Site Retail Digital Media

Off-site retail digital media extends beyond the retailer's own properties. These ads use the retailer's customer data but appear on other websites and platforms.

For example, if you browse products on Walmart's website but don't buy anything, you might later see ads for those same products when you're reading news articles or checking social media. This is possible because Walmart shares its customer data with advertising partners in a privacy-compliant way.

This approach helps brands stay connected with potential customers even after they leave the retailer's website. It's part of the broader retail digital media ecosystem that uses retailer data for targeted advertising across the internet.

3. In-Store Retail Advertising

In-store retail advertising brings digital ads into physical stores. As retailers add more technology to their stores, they create new opportunities for brands to reach shoppers.

Examples include:

• Digital screens on shopping carts

• Interactive displays at the end of aisles

• Video screens near checkout counters

These ads can change based on factors like time of day, store location, or even weather conditions. They help bridge the gap between online and offline shopping experiences.

How Retail Media Networks Work

A retail media network is the system that connects retailers, brands, and shoppers in the advertising process. Understanding how these networks work helps explain why retail media has become so popular.

Retail media networks involve three main participants:

• Retailers: Provide the platform (website, app, or store) and customer data

• Brands: Create and pay for ads to reach shoppers

• Shoppers: See relevant ads while browsing or buying products

The technology behind these networks includes data management systems that organize customer information, ad servers that deliver the ads, and analytics tools that track performance.

What makes retail media networks special is their use of first-party data—information the retailer collects directly from its own customers. This data includes what people search for, what they buy, and how they browse the store or website.

First-party data is becoming more valuable as privacy changes make it harder to track people across different websites. Since retailers already have relationships with their customers, they can use this data to show relevant ads without relying on tracking cookies.

The "closed loop" nature of retail media is another important feature. This means the same platform that shows the ad also handles the purchase, making it easier to measure whether an ad led to a sale.

Benefits Of Retail Media Advertising

Retail media advertising offers several key benefits that explain why it's growing so quickly.

For retailers:

• New revenue stream: Retailers can make money by selling ad space on their digital properties

• Enhanced shopping experience: Well-targeted ads can help shoppers discover products they might be interested in

• Stronger brand partnerships: Working with advertisers creates deeper relationships with brands

For brands:

• Targeted reach: Ads reach shoppers who are actively looking to buy

• Better measurement: It's easier to track whether ads lead to sales

• First-party data access: Brands can use the retailer's customer data for more precise targeting

For shoppers:

• More relevant ads: Ads are more likely to show products that match their interests

• Helpful product discovery: Ads can introduce shoppers to new products they might not have found otherwise

• Integrated shopping experience: Ads appear naturally within the shopping environment

These benefits explain why retail media ad spend continues to grow. According to industry estimates, retail media now accounts for about 15% of digital advertising spending, with continued growth expected in the coming years.

Retail Media Examples From Major Retailers

Looking at how major retailers implement retail media helps illustrate how these systems work in practice.

Amazon Advertising

Amazon's retail media offering is the largest in the industry. It includes:

• Sponsored Products that appear in search results

• Sponsored Brands that feature a company logo and multiple products

• Display ads that show up across Amazon's website and app

Amazon also extends its advertising reach through Amazon DSP (Demand Side Platform), which lets brands use Amazon's customer data to place ads on other websites.

Walmart Connect

Walmart Connect offers advertising options both online and in its physical stores:

• Search ads that appear when customers look for products

• Display ads across Walmart.com and the Walmart app

• In-store screens that reach shoppers while they're in Walmart locations

Walmart uses its extensive customer data to help advertisers target specific audiences based on shopping behavior.

Target Roundel

Target's retail media network, called Roundel, focuses on creating a seamless experience for both shoppers and advertisers:

• On-site ads that appear throughout Target.com

• Off-site ads that reach Target customers on other websites

• In-store digital signage in Target locations

Roundel emphasizes the connection between digital advertising and in-store shopping, helping brands reach customers across different shopping channels.

Getting Started With Retail Media

For brands interested in retail media advertising, there are several key steps to consider.

First, identify which retail media platforms align with your products and target audience. Different retailers attract different customer demographics, so choose platforms where your potential customers already shop.

Next, understand the advertising options available on each platform. Most retail media networks offer a range of ad formats with different placement options, targeting capabilities, and pricing models.

Setting clear goals is essential for retail media success. Common objectives include:

• Increasing sales of specific products

• Improving brand visibility within a product category

• Supporting new product launches

• Defending market share against competitors

Start with a test budget to learn what works best. Most retail media platforms allow you to start with a relatively small investment and scale up based on results.

Track performance using the metrics that matter most for your business. While sales are the ultimate goal, other metrics like click-through rate, return on ad spend, and new-to-brand customers can provide valuable insights.

Measuring Retail Media Performance

Measuring the performance of retail media campaigns helps brands understand what's working and where to improve.

The most common retail media metrics include:

• Return on Ad Spend (ROAS): The revenue generated for every dollar spent on advertising

• Click-Through Rate (CTR): The percentage of people who click on an ad after seeing it

• Conversion Rate: The percentage of people who make a purchase after clicking on an ad

• Cost Per Acquisition (CPA): How much it costs to acquire a new customer

What makes retail media measurement powerful is the direct connection between ad exposure and purchase. Since the ad and the purchase happen in the same environment, retailers can provide accurate data about which ads led to sales.

This closed-loop measurement is a major advantage over traditional digital advertising, where connecting ad views to purchases often requires complex tracking systems.

Most retail media platforms provide dashboards that show campaign performance in real-time. These tools allow advertisers to monitor results and make adjustments to improve performance.

The Future Of Retail Media Advertising

Retail media advertising continues to evolve as technology advances and consumer behavior changes.

Several trends are shaping the future of retail media:

• Expansion beyond traditional retailers: More companies with direct customer relationships are building their own media networks, including food delivery services, airlines, and financial institutions.

• Integration of online and offline data: Retailers are connecting their e-commerce and in-store data to create more complete customer profiles for better targeting.

• Advanced formats like video and interactive ads: Retail media is moving beyond simple product listings to include more engaging formats that capture attention and drive engagement.

• Increased focus on privacy: As privacy regulations tighten, retail media's reliance on first-party data (rather than tracking cookies) positions it well for continued growth.

As more retailers build their own media networks, the retail media landscape will become more complex. Brands will need to develop strategies for working across multiple platforms while maintaining consistent messaging and measurement.

Elevate Your Growth Strategy

Retail media advertising offers a powerful way to reach shoppers at the moment they're making purchase decisions. By placing ads directly within retail environments, brands can influence choices and drive sales in a measurable way.

The key to success lies in understanding how different retail media platforms work, creating compelling ads that stand out, and measuring performance to continuously improve results.

Darkroom helps brands develop effective retail media strategies that align with their overall growth goals. By combining retail media with other digital marketing approaches, brands can create a comprehensive plan that reaches customers throughout their shopping journey.

Schedule a call to explore how Darkroom can help your business leverage retail media advertising for sustainable growth.

FAQs About Retail Media Advertising

How does retail media advertising differ from traditional digital advertising?

Retail media advertising appears directly on retailer platforms where people shop, using the retailer's first-party customer data for targeting, while traditional digital ads appear across various websites using third-party cookies.

What makes Amazon the leader in retail media networks?

Amazon leads retail media because of its massive scale, early entry into the space, sophisticated targeting capabilities, and the direct connection between ads and purchases on its platform.

How can smaller brands compete in retail media environments?

Smaller brands can compete in retail media by focusing on specific product categories, targeting niche customer segments, and starting with smaller test budgets to learn what works before scaling up.

What is the future of retail media advertising?

The future of retail media includes expansion beyond traditional retailers, better integration of online and offline data, more advanced ad formats like video, and continued growth due to its privacy-friendly approach to targeting.