2025 trend: Mounting pressure will squeeze the long tail of retail media networks

Even an influx of new retail media networks (RMNs) will not chip away at the share of ad spending allocated to the top two powerhouses. Amazon and Walmart combined will gobble up more than 84% of all retail media ad spending in 2025, representing a pervasive and unyielding dominance within the channel. The share of ad spending allocated to all other RMNs increased by less than 1 percentage point between 2019 and 2024. While the pie has grown nearly five times larger since 2019, it has also grown significantly more crowded, with more retailers competing for advertiser investment.

Retailers have yet to act on advertisers’ calls for standardization and transparency. While industry trade associations have laid the groundwork with guidelines for standardization, not all retailers are motivated to put in the work. Ultimately, slow progress stands to reinforce the biggest players. Deepening the challenge: RMNs that depend on investment from CPG advertisers will face headwinds in 2025, as the industry’s digital advertising spend is set to grow just 6.1%, a stark slowdown from the double-digit growth that defined 2023 and 2024, per our forecast.

In 2025, RMNs that make up the long tail of ad spending will face harsh realities. Most small and midsize retailers simply lack the digital footprint necessary to generate meaningful revenues solely by monetizing their owned and operated digital channels. Many are branching into arenas that enable a more scaled reach, including off-site digital channels with the potential to tap into budgets typically reserved for upper-funnel awareness. But success off-site or in-store requires a tough-to-stomach investment to fund capabilities, expertise, and technology.

Predictions

• Resource-strapped advertisers will consolidate RMN spending across fewer networks. RMN heavy hitters will benefit at the expense of newer entrants.
• Ad tech platforms will reap rewards as small and midsize retailers look to turnkey solutions. As the cost and complexity of RMNs come into focus, some of the retailers that have attempted to build in-house will outsource to third-party providers.
• Retailers that fail to act decisively will be left further behind. Some will elect to abandon their RMN ambitions beyond outsourcing basic capabilities, while others will fold entirely.

Read the full report, Retail Trends to Watch in 2025.