Retail media networks are becoming a central part of how advertising works in digital and physical retail spaces. As of mid-2025, many retailers now operate their own advertising platforms, giving brands new ways to connect with shoppers.

These networks are not limited to online stores. They also appear in mobile apps, on in-store displays, and in other parts of the shopping experience. The key feature is that they use shopper data collected by the retailer.

Understanding what retail media networks are and how they function helps explain why more marketers are using them every year.

What Are Retail Media Networks

Retail media networks are advertising platforms created and managed by retailers. They allow brands to place ads directly within the retailer's digital properties, such as websites, apps, or in-store screens.

These platforms use the retailer's first-party data to target specific audiences. This data includes customer purchase history, browsing behavior, and location patterns. Because the data comes directly from the retailer, it is considered more accurate and relevant than third-party sources.

Retail media networks operate in two main ways:

• On-site retail media: Ads that appear on the retailer's own platforms like websites and apps

• Off-site retail media: Ads placed on third-party websites and social platforms, but still targeted using the retailer's customer data

Over time, these networks have developed into more complex systems. They now support multiple ad formats, automated bidding, performance tracking, and integration with other marketing tools.

Why They Are Growing Rapidly

Retail media networks are growing quickly. In 2025, global ad spend on these platforms is expected to exceed $100 billion, with growth continuing at a double-digit rate each year.

This growth is partly due to changes in how digital advertising works. As third-party cookies are phased out, brands are turning to retailers for first-party data. This data comes directly from customer interactions and helps advertisers reach specific audiences more accurately.

E-commerce growth has also played a role. As more people shop online, it becomes more important for brands to reach them during the shopping process, especially when they are ready to make a purchase.

There are several key reasons driving this growth:

• First-party data advantage: Retailers collect detailed information about what customers buy, when they shop, and what they browse. This data helps create more relevant ads.

• Closed-loop attribution: Retail media networks can track whether someone who saw an ad actually bought the product, either online or in a physical store.

• Changing shopping habits: More people research and buy products directly through retailer websites and apps, making these platforms valuable places to advertise.
  
  

How Retailers And Brands Benefit

Retail media networks create a win-win situation for both retailers and brands. Here's how each side benefits:

For retailers, these networks provide a new source of income that often has higher profit margins than selling products. A retailer might make 3-4% profit on selling goods, but advertising can bring 70-90% margins.

Brands benefit by reaching shoppers at the moment they're making purchase decisions. This timing can significantly increase the effectiveness of advertising compared to showing ads when people aren't in a shopping mindset.

Key Challenges And How To Solve Them

1. Fragmentation

One big challenge is that there are now dozens of retail media networks, each with its own system. Brands running campaigns across multiple retailers face complexity in managing different platforms, formats, and reporting methods.

Solutions to this problem include:

• Using central management tools that connect to multiple retail media networks

• Working with agencies that specialize in retail media across different platforms

• Looking for services that combine reporting from various networks into one dashboard

2. Data Privacy

Retail media networks rely on customer data, which is subject to privacy laws like GDPR and CCPA. These regulations limit how personal information can be used for advertising.

Best practices for handling data privacy include:

• Only using data that customers have agreed to share

• Making sure all personal information is anonymized

• Partnering with retailers that have clear privacy policies

• Staying updated on changing regulations

3. Limited Creative Options

Many retail media networks restrict the types of ads they allow. Unlike regular websites where many ad formats are possible, retail platforms often limit options to simple formats like sponsored product listings or banner ads.

Ways to work within these limitations:

• Design ads specifically for the available formats

• Test different messages to see what works best

• Explore newer formats like video ads or interactive elements where available

4. Measurement Complexity

Each retail media network measures results differently. This makes it hard to compare performance across platforms or understand the true impact of advertising.

Approaches to improve measurement:

• Use multi-touch attribution to see how different ads contribute to sales

• Test whether ads actually cause additional sales (incrementality testing)

• Focus on business goals rather than platform-specific metrics
  
  

Best Practices For Maximizing Strategy

1. Use First-Party Data For Targeting

First-party data is information collected directly from customers. In retail media, this means using the retailer's data about what people buy and how they shop.

This data can be used in several ways:

• Target people who have bought similar products before

• Reach customers who haven't purchased in a while with special offers

• Suggest related products based on past purchases

Some retailers now offer "clean rooms" - secure environments where brands and retailers can combine their data without sharing personal information directly.

2. Employ Programmatic Retail Media Buying

Programmatic buying uses automated systems to purchase and optimize ad placements. This approach is becoming more common in retail media networks.

Benefits of programmatic retail media buying include:

• Efficiency: Automated systems can make thousands of decisions quickly

• Optimization: Algorithms adjust spending based on what's working

• Scale: Manage campaigns across multiple retailers more easily

Many brands start with managed services where the retailer or an agency handles the technical aspects. As they gain experience, some move to self-service platforms.

3. Integrate Omnichannel Experiences

Omnichannel means connecting different marketing channels so they work together. For retail media, this involves linking online ads with other touchpoints like in-store displays, email marketing, and social media.

Examples of omnichannel integration:

• Running consistent promotions across digital ads and in-store displays

• Using similar messaging on retail websites and in your own marketing

• Tracking how customers move between online and offline shopping

This approach creates a more seamless experience for customers and helps brands understand the full impact of their marketing efforts.

4. Enhance Attribution Models

Attribution is how marketers determine which ads led to sales. In retail media, attribution can be more direct because the ad and purchase often happen in the same environment.

Methods to improve attribution:

• Use unique tracking links or promo codes for different campaigns

• Compare groups that saw ads with those who didn't to measure true impact

• Look at both immediate sales and longer-term effects

Better attribution helps brands understand which retail media investments are most effective and worth continuing.

Forecast And Future Opportunities

1. Growing In-Store Networks

Physical stores are becoming digital media spaces. Retailers are adding screens, interactive displays, and smart shelf technology that can show targeted ads to shoppers.

These in-store networks use technology like:

• Digital signage that changes based on who's nearby

• Interactive kiosks where shoppers can browse products and see related offers

• Smart shelves that display information about products when touched or approached

This trend bridges the gap between online and in-store shopping experiences, creating new opportunities for brands to reach customers.

2. Future Innovations In Retail Media

Technology continues to change how retail media works. Some key innovations include:

• AI-powered personalization: Systems that automatically create different versions of ads for different customers

• Augmented reality experiences: Virtual try-on features or product visualization tools

• Voice-activated shopping: Ads that work with voice assistants in stores or homes

These innovations will make retail media more interactive and personalized in the coming years.

3. Entertainment Commerce Verticals

Retail media is expanding beyond traditional shopping environments into entertainment platforms.

This includes:

• Streaming services that allow viewers to buy products shown in shows

• Gaming platforms where players can purchase items featured in games

• Social media platforms that combine content viewing with shopping

This trend creates new opportunities for brands to reach audiences in engaging environments where they spend their leisure time.

Where Do We Go From Here

Retail media networks have become an important part of the marketing landscape in 2025. They offer unique advantages in targeting, measurement, and reaching shoppers at key moments.

For marketers looking to make the most of these platforms, a good starting point is reviewing current retail media efforts. This includes checking which retailers you're working with and how those campaigns are performing.

Measurement remains a key focus area. Using consistent metrics across different retail media networks helps compare results and make better decisions about where to invest.

The retail media landscape continues to evolve rapidly. New formats, technologies, and partnerships emerge regularly. Staying flexible and testing new approaches helps marketers adapt to these changes.

Schedule an introductory call with Darkroom's experts to explore how we can help your business capitalize on retail media opportunities.

Frequently Asked Questions About Retail Media Networks

How do retail media networks differ from traditional digital advertising?

Retail media networks use data collected directly from shoppers during their interactions with a retailer. This allows for more precise targeting based on actual shopping behavior rather than assumptions. They also provide clearer measurement by connecting ad views directly to purchases, something traditional digital ads often struggle to demonstrate.

What budget allocation is recommended for retail media in 2025?

Industry reports suggest allocating between 15% and 25% of a digital marketing budget to retail media in 2025. The exact amount varies by industry, product type, and business goals.

How can brands measure retail media ROI effectively?

Brands can measure retail media ROI by using incrementality testing (comparing results between groups that saw ads versus those who didn't), calculating return on ad spend, and using attribution models that track customer journeys across channels.