Retail Media Networks: The Rising Powerhouses of Digital Advertising

Retail Media Networks (RMNs) have emerged as one of the fastest-growing forces in digital advertising, reshaping how brands connect with shoppers in an increasingly fragmented buying journey. 

According to TechRadar, these retailer-owned ad platforms are becoming a major alternative to traditional media – and they’re showing no signs of slowing down.

A New Era in Shopper Engagement

For decades, TV and mainstream digital platforms dominated awareness and conversion campaigns. But the way people shop has changed. 

Today’s consumers might research online, buy in-store, and bounce between multiple platforms before making a decision – a behaviour known as the “ROPO” effect (Research Online, Purchase Offline).

RMNs are stepping in to meet this complexity head-on. Retailers can now sell ad space not only on their websites and apps but also in physical stores and across partner platforms. The real ace up their sleeve? High-quality first-party data gathered through loyalty programmes – a treasure trove for advertisers looking to target with precision.

The Market is Booming

Globally, the retail media market is expected to hit $179.5 billion (£140.1bn) by the end of 2025. In the United Kingdom, retail media ad spend is forecast to overtake television advertising in the same period.

Amazon is the clear frontrunner, generating an estimated $60 billion (£46.9bn) in RMN revenue in 2024. Walmart follows at around $4 billion (£3.1bn) – a gap that highlights both Amazon’s dominance and the potential for other players to grow.

For retailers, the attraction is obvious. While product sales often deliver slim margins, RMN ad revenue margins can exceed 70%. No wonder more than 200 new RMNs have launched in recent years as retailers race to tap into this high-return opportunity.

What Makes a Retail Media Network Work?

So far, most RMN spending by brands focuses on bottom-of-funnel placements – sponsored product listings or display ads that appear on retailer websites and apps. 

But the potential stretches far beyond this. Leading networks are evolving into full-funnel platforms, supporting brand awareness and consideration campaigns both online and in physical stores.

Innovations are emerging fast. Retailers are investing in in-store digital screens, ads on connected TVs (CTV), and partnerships with platforms like TikTok and Google. 

Walmart’s collaboration with TikTok and Tesco’s tie-up with ITVX are prime examples of integrated media offerings that cover the entire customer journey – from discovery through to purchase.

The Infrastructure Behind Success

For RMNs to deliver maximum impact, retailers need a robust operational setup, including:

• A unified operating model with retail and media teams aligned.
  
• First-party audience segmentation for precision targeting.
  
• A variety of ad formats across physical and digital channels.
  
• Measurement tools, ideally enhanced by machine learning, to track KPIs such as ROAS, iROAS, sales lift, and brand impact.
  
• Data clean rooms to securely combine internal and partner data.
  
• Self-service and managed service options for campaign execution.
  
• A/B testing capabilities to refine strategies.
  
• In-store ad tracking, matching impressions or view time with sales data to gauge effectiveness.

When executed well, RMNs offer brands an unparalleled view of shopper behaviour across multiple touchpoints, enabling greater personalisation and improved campaign performance.

The Challenges Ahead

Despite the promise, many retailers struggle to turn RMNs into consistent revenue engines. 

One fundamental issue is mindset: running a media business requires a seller’s approach, yet many retailers are used to operating as buyers. Without experienced ad sales teams or the right tools, campaigns can underperform.

Other stumbling blocks include poor-quality data, a narrow range of ad formats, and the absence of self-service tools for advertisers. A lack of collaborative planning between retailers and brands can also erode confidence, especially if results aren’t measured and communicated clearly.

Add to that an increasingly crowded marketplace, and it’s clear that not every RMN will make the leap from concept to profitable enterprise.

Thinking Like an Agency

To compete with heavyweights like Amazon, Google, and Meta, retailers need to adopt a media agency mindset. That means offering strategic guidance, sharing transparent performance data, and leveraging advanced analytics to help advertisers understand what works.

Crucially, RMN earnings should be viewed as ad revenue rather than a by-product of product sales. Retailers that make this mental shift will be better equipped to secure a greater share of marketing budgets.

Conclusion: The Future of RMNs

Retail Media Networks are no longer a niche experiment – they’re becoming a cornerstone of digital marketing strategy. With global growth set to outpace some traditional media channels and UK spending on track to surpass TV advertising by 2025, the stakes have never been higher.

For retailers, the opportunity is enormous – but so is the competition. Success will hinge on building sophisticated, data-driven platforms that serve both shopper and advertiser needs. 

Those who master the balance between precision targeting, creative formats, and robust measurement will not only compete with the tech giants but could redefine the very future of retail advertising.