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InContext / An inside look at the business of digital content

Retail media: the hot trend media execs can’t afford to ignore

February 2, 2023 | By Damian Radcliffe, Carolyn S. Chambers Professor in Journalism – University of Oregon @damianradcliffe

In the rapidly changing landscape of digital advertising, retail media is fast emerging as a powerful new force.

Image via eMarketer

According to GroupM, global advertising revenues directed to retail companies already accounts for 18% of total digital advertising and 11% of total advertising spend. “We expect retail media advertising to increase roughly 60% by 2027,” GroupM’s 2022 E-Commerce & Retail Media Forecast noted back in September. Globally, that will make it a $168 billion market.

Another firm, Boston Consulting Group (BCG), estimates that by 2026, retail media will account for 25% of digital media spending.

These are big numbers. So, given media companies continued reliance on advertising revenue, any emerging player in this space is one to watch. Retail media is no exception.

Here’s what you need to know about its growth, potential impact on digital ad revenues, and what publishers stand to learn from this booming market.

What is retail media?

As Zenith explains, retail media refers to display and search advertising that appears on e-commerce websites and/or the online platforms of brick-and-mortar retailers.

Retail media networks (RMNs), such as those operated by Amazon, Walmart and Shopify, offer multiple opportunities to deliver targeted advertising. They also provide the means to deliver other forms of sponsored content to consumers, both on their own sites and increasingly off-site, too.

Why is it growing?

Retail media isn’t new. But it is in its ascendancy. GroupM estimates that global advertising revenue for retail-based companies was worth $88 billion in 2021, growing to $101 billion in 2022.

This uptake, eMarketer says, can be attributed to “the death of the third-party cookie–as well as retailers’ ability to leverage their first-party data on customers.”

Image via eMarketer

Alongside this, we also must consider the continued impact of the pandemic in shifting consumer behaviors and driving more people to shop online. As e-commerce has grown, so has the desire of brands to be in spaces where we are increasingly spending more time. And money.

Not surprisingly, brands and manufacturers are using retail media to reach customers at the point of purchase, or when they are most likely to make a purchase decision. That’s often on e-commerce sites and on online shopping channels.


There are several clear challenges here for media companies. The first lies in the worry that retail media will further contribute to the cannibalization of publisher’s advertising revenues. As advertising markets continue to grow, there’s a very real concern that publishers will not get a bigger slice of this pie, as monies flow to other platforms and providers.

For agencies and brands, the volume of first-party data that retail media platforms have access to makes them highly appealing. It also makes them potentially difficult to compete with.

Alongside this, these platforms also offer the opportunity for both highly targeted ads and advertisements that may trigger trackable purchase decisions there and then.

Of course, publishers offer this functionality too, often packaged through – and around – compelling content. This can also inspire purchases, but the journey to transaction might be more complicated, or less immediate. For example, online shopping through an affiliate partnership might take you offsite to complete a purchase. In contrast, seamless, frictionless, transactions are the bread and butter of traditional e-commerce sites. Unlike on many publisher sites, transactions can be completed within their walled garden, without the need to visit a partner’s site.

New data from the Reuters Institute notes that nearly a quarter of media leaders in 53 countries around the world described e-commerce as an “important,” or “very important,” revenue stream for their company in the year ahead. As these media companies seek to grow their e-commerce revenues, the UX and targeting that retail media networks can potentially provide, may offer some stiff competition to these ambitions.

Lastly, we should also note that retailer’s media activity is not just about advertising. Some retailers are also investing in traditional content too. This includes time-honored staples such as in-store magazines through to live shopping experiences, developing relationships with influencers, and running their own in-house media companies, like Target’s Roundel.

Image: Screengrab from a presentation by New York performance marketing firm Tinuiti


As eMarketer explains, “the most important benefit that retail media offers brands is a closer relationship with retailers, followed by creative services, access to owned and operated media/properties, first-party sales data, and personalization opportunities through creative.”

That makes for a compelling case for many brands and advertisers. But, of course, some of those characteristics are applicable to media companies too. Moreover, retail media isn’t a sector that publishers are locked out of. Far from it. There are multiple possibilities for media companies to tap into this market.

For example, Grocery Dive notes that retailers are increasingly looking to add shoppable video, live streams, and other multimedia content on their sites. Some do this in-house and have large creative teams. However, this increasing demand for content presents opportunities for creative and publishing partners. They might range from start-ups like Firework – a video commerce solutions provider – through to the content studios at large publishers such as The New York Times’ T Brand Studios and Bloomberg Media Studios.

Yahoo! meanwhile has created a tech stack to support RMN’s run by Lowe’s and Marriott, which includes enabling ad buyers to use anonymized data to target customers using Marriott’s app and websites. In the future, that will come to TVs in their hotel rooms too. It will be interesting to see if additional content layers – such as local news, weather and sports – will be added to these spaces in the future, so that consumers are served content related to where they are staying from trusted publishing partners.

There are also opportunities to double-down on some of the partnerships between retailers and media brands. Walmart has already partnered with BuzzFeed to offer Tasty branded kitchenware and shoppable recipes. Inspired by a recipe idea, users could have the items needed to create it added to an online basket, picking up the items later in the store or having them delivered to their homes.

But given that retailers are also offering food inspiration on their own sites, that model could be flipped on its head in which case, RMNs would send traffic to publishers’ sites (e.g. NYT Cooking) to continue their journey.

Thanksgiving-themed shoppable videos on Safeway’s website, via Grocery Dive

Lastly, it’s worth noting that some retail media providers offer offsite, often co-branded ads. This means that some of RMN’s ad dollars may still flow towards media companies. In fact, they already are, according to Gavin Dunaway from The Media Trust.

As he explained to DCN readers last summer, “When retailers buy off property, they need high-quality inventory in well-lit spaces.” That might mean marquee publishers with large audiences, or more targeted niche outlets. Within that, the ability to offer contextual ads, and to do so in a less crowded space than a typical online shopping space, is potentially very appealing.

Moreover, given concerns about brand safety, quality publishers can also be a safer bet for retailers and their advertisers, than some of the vagaries of the programmatic marketplace. That too makes them attractive for RMNs and their advertisers.

Looking ahead

The rise of retail media represents a significant shift in the advertising landscape and one that publishers cannot afford to ignore.

Retail media is expected to exceed $50 billion in the United States in 2023 alone. That represents 20% of total U.S. digital ad spend, AdWeek reports. It is daunting to face another major competitor in the digital ad marketplace. However, it’s an area that publishers should consider exploring and learning from. With companies like Amazon and Walmart already generating substantial advertising revenue, media companies should be paying close attention to the strategies of these companies, if they are not already.

As part of this, trends such as shoppable videos and the intersection of retail media and connected TV (another advertising channel that is also growing rapidly) are worth watching.

And, if nothing else, the emergence of retail media highlights the importance of a strong first-party data strategy, and the potential power it holds with advertisers and consumers alike. This once again reinforces the need for publishers to ensure that they do not get left behind when we move to a cookie-less world.

Areas that retail media are already majoring in – first-party data, shoppable video, sponsored content, and contextual ads designed to spark purchases – should be reviewed with this new competition in mind. There is also much to learn from their efforts in these arenas, as well as opportunities to partner with RMNs on everything from e-commerce strategies to ad inventory.

As the retail media market continues to expand and evolve, it looks set to play a growing role in the advertising industry and in shaping consumer habits. Subsequently, it’s a space that publishers must pay attention to by continuing to revisit and check out. After all, just because you’ve seen one retail media network, it doesn’t mean seen the mall.

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