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In our 2024 predictions report, we highlighted the shift in advertiser budgets toward digital platforms—particularly streaming services (from live and catch-up TV to pure streaming platforms) and retail media—at the expense of traditional channels. Today, we observe the convergence of the streaming services and retail media trends, accelerating disruption within the media industry.
The definition of retail media is evolving fast— and so is the revenue
Retail media, as defined by the Interactive Advertising Bureau (IAB), “encompasses the digital advertising space, retail data, and in-store opportunities that retailers or marketplaces own and make available for brands to run powerful ad campaigns.” Retailers’ first-party data—collected directly from their customers—enables hyper-targeted campaigns that don’t just sell but resonate, boosting brand loyalty. But retailers are no longer confined to their own assets; they’re reaching further, and the impact is huge. What started as basic ad placements on retailers’ sites and in stores has transformed into a dynamic ecosystem where online, in-store, and third-party channels are interconnected, creating a holistic advertising powerhouse fueled by rich first-party data.
Retail media is one of the fastest growing segments in digital advertising, projected to reach 18% of total digital ad revenue by 20281. The momentum is undeniable: Amazon Advertising has clocked an impressive 23% CAGR over the last three years, outpacing Google’s 13% and Meta’s 12%2. And it’s not just the digital giants—traditional retailers such as Walmart ($4 billion), Target ($1.2 billion), and Tesco ($0.7 billion)3 have made substantial investments and are poised to ride the wave. As a result, retail media is on track to surpass traditional TV advertising by 2026.
Retail media is at a pivotal moment. Between the e-commerce boom during the pandemic, the diminishing use of third-party cookies, and the quest for new revenue streams, retailers now stretch beyond their natural boundaries. Here’s what’s next:
Retail media and streaming services: The new frontier for advertising
In 2024, U.S. retail media spend is expected to soar to $55 billion, with CTV advertising following at $28 billion4. As both areas continue growing, we’re witnessing new partnerships form between retailers and streaming services to create a seamless, connected experience for consumers. Imagine an ad journey that blends online shopping behavior with streaming habits—retail media is turning that vision into reality.
By integrating the two, brands can leverage first-party retailer data for precise, personalized ad targeting and dynamic ad experiences This convergence offers brands a complete view of the customer journey, positioning retail media as a full-funnel solution.
As more alliances form between retailers and streaming giants, they will redefine the industry landscape. And retailers are not stopping there. In the past couple of years, they have also partnered with social media networks to capitalize on social shopping trends, even forging unlikely alliances such as Amazon with Pinterest and Meta5.
The global play: Retail media goes worldwide
The majority of the 2206 retail media networks today are located in North America (66) and Western Europe (95). Retail media networks first emerged in the U.S. 20 years ago and reached Western Europe within five years. This eastward expansion continues, and we believe will pick up pace in the near future, as e-commerce and digital transformation accelerate across the globe. More retailers will create retail media networks, leveraging their unique customer data pools to connect brands with audiences, offering new ways for advertisers to engage consumers.
2025 will be the year media agencies double down on retail media
As retail media disrupts the advertising landscape, agencies need to juggle fragmented platforms, varying ad formats, inconsistent data structures, and differing targeting capabilities—all while developing and mastering new metrics and KPIs. This requires specialized skills and advanced data management systems.
In the past 18 months, agencies have stepped up to tackle these challenges head-on and integrate retail media into broader ad ecosystems by:
- Building in-house expertise: Agencies are cultivating specialized teams dedicated to retail media, ensuring they stay agile and meet the fast-evolving market demands (i.e., Dentsu’s retail media practice). Some are even acquiring niche talent and companies to bolster their capabilities (i.e., Publicis Groupe and CitrusAd, Omnicom and Flywheel).
- Investing in technology: By developing proprietary tools, agencies are enhancing their targeting precision, streamlining integration processes, and improving measurement metrics, all to offer a more data-driven approach (i.e., IPG’s unified retail media solution).
- Partnering with platforms: Collaborating directly with retail media networks, agencies gain exclusive access and optimized operations, which creates seamless experiences for their clients and maximizes media impact (i.e., Tesco Media and GroupM, Amazon Ads and Omnicom).
In 2025, we expect the Big Six and regional media agencies to pursue more strategic acquisitions, partnerships, and capability development while they reevaluate their operating models and technology to fully leverage the potential of retail media across the globe.
Our predictions for retail media in 2025
The growth of retail media is transforming the advertising industry, offering significant opportunities but also introducing new challenges. As retail media expands to include streaming services and social media, media agencies and brands face increasing operational difficulty. Evolving operating models and capabilities will be essential to manage fragmented platforms, varied ad formats, and inconsistent data structures, alongside heightened data privacy requirements. Those that can adapt to navigate this complexity will gain a competitive edge, driving the future of digital advertising.
1. Statista, Dentsu, eMarketer data and AlixPartners analysis
2. Quartr Research
3. Company financials and IR reports
4. Statista, Dentsu, eMarketer data and AlixPartners analysis
5. Company press releases, AlixPartners research
6. Mimbi
