What advertisers and retailers need to know about retail media heading into 2025

The overview: The retail media gold rush continued in 2024. US omnichannel retail media ad spending grew 20.4% this year to $52.3 billion, per our forecast, making it the fastest-growing ad channel.

But rapid growth comes with growing pains—as retail media networks (RMNs) not named Amazon or Walmart discovered this year. As the industry matures, advertisers’ calls for standardization, better measurement, and transparency are growing louder, and their willingness to experiment with smaller RMNs is diminishing in favor of platforms with scale and proven ROI.

Here’s what advertisers and retailers need to know about retail media heading into 2025.

Amazon and Walmart are dominant. The two companies accounted for 84.2% of retail media digital ad spending this year, a share which will hold steady in 2025. Amazon leads the pack by a country mile, with over three-quarters of retail media dollars headed its way. While Walmart is much further behind with a 7.5% slice, it’s the only one of the six retailers we track whose share will grow into 2026, thanks to its expanding marketplace and entrance into the lucrative CTV advertising space.

The two retailers’ dominance is putting serious pressure on the dozens of remaining RMNs that are competing in an increasingly crowded field for a small sliver of the pie.

• Some, like Best Buy and Home Depot, are seeking out partnerships with media companies to improve their reach and targeting abilities.
• Others, like Instacart and Ahold Delhaize, are trying to capitalize on in-store opportunities.

But with advertisers trying to narrow the number of RMNs they work with, retailers will have to quickly beef up their advertising and measurement capabilities—or be forced to fold.

In-store media is a growing opportunity. While just 0.7% of retail ad spending is being allocated to physical retail, it has the potential to be a hugely lucrative channel given that the vast majority of sales still take place in-stores. It’s also the one area where many retailers have an advantage over Amazon—which is why companies like CVS, 7-Eleven, and Hy-Vee are adding more in-store advertising capabilities.

The main barrier facing in-store retail media is the expense of outfitting stores with the necessary technology to both display ads and measure attribution. Many of retailers’ efforts rely on existing infrastructure, like radio networks and digital screens.

Despite these limitations, we expect in-store retail media ad spending to jump by 45.5% next year and to surpass $1 billion by 2028.

Marketers want full-funnel solutions. More brands are turning to retail media for upper-funnel uses like building awareness and consideration—in large part because RMNs are adding more off-site opportunities in channels such as connected TV (CTV) and social media to broaden their appeal.

Advertisers are particularly attuned to CTV opportunities.

• Retail media CTV ad spending will grow by 45.5% in 2025, and we expect 1 in 5 CTV ad dollars will be allocated to retail media by 2027.
• Both Amazon and Walmart are, unsurprisingly, perfectly situated to capitalize on this. Walmart’s $2.3 billion Vizio acquisition will give brands new ways to reach consumers and boost product discovery, while Amazon is reaping the rewards from the launch of Prime Video’s ad-supported tier and its investments in live sports.
• Other retailers looking to get in on the CTV boom include Albertsons and Instacart.

Overall, we expect off-site RMN ad spending to grow 42.1% YoY in 2025.

Attracting non-endemic brands is crucial for long-term growth. As the retail media industry matures and spending from existing advertisers plateaus, RMNs are looking to non-endemic brands as a growth opportunity.

• Walmart Connect now offers offsite media to non-endemic brands, including those in the automotive, entertainment, financial services, and travel industries.
• Home Depot is betting that its ability to segment audiences based on the type of projects they’re doing will attract advertisers in sectors like financial services and the telecom industry.
• Albertsons, Amazon, and Best Buy are among the other retailers embracing non-endemic opportunities to expand the reach of their ad businesses.

Our take: While we expect growth in 2025 to be roughly in line with this year, the environment will be more challenging for the majority of RMNs unless they have the scale of an Amazon or Walmart—or the ability to reach unique audiences.

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