2025 Retail Media Predictions

The latest figures from eMarketer project global Retail Media revenue in 2025 to surpass $165 billion, with $72 billion in the U.S. alone (sheesh!). This explosive growth will significantly impact the broader digital media category as much of this revenue comes from reallocating existing budgets rather than net new dollars. But that’s a topic for another day.

Focusing on the Retail Media Network (RMN) ecosystem, I have a few predictions for next year. These predictions are grounded in what I believe is the overriding priority for both the sell-side and buy-side: revenue growth. While striving for excellence in technology, services, and marketing is essential and makes for great soundbites, these efforts typically take a back seat to revenue-driving initiatives.

With that in mind, here are my Retail Media predictions for 2025.

Retail Media Networks: Sell-Side

As RMNs evolve into more mature media businesses, they will focus on strategies that drive revenue and profits. Here are the trends to watch from the sell-side in 2025:

1. Inventory Expansion

RMNs will look for ways to expand their ad inventory, focusing on channels and formats that offer higher margins and significant volume. “Owned” inventory remains the gold standard, so new onsite and in-store formats will garner significant attention. Programmatic channels will also grow, given their low inventory acquisition costs and massive scale. Walmart is poised to capitalize on CTV now that its acquisition of Vizio is finalized. However, for other RMNs, OTT may remain cost-prohibitive in 2025—especially for trade and shopper dollars, except for Amazon, which already owns video inventory.

2. New Products for Brand Dollars

Expanding into brand advertising budgets is an obvious growth area for RMNs, as these budgets are significantly larger than trade or shopper marketing. Introducing OTT inventory makes more sense in this context, as the format appeals to brand marketers who are comfortable with higher CPM thresholds. Target is an early mover here. 

3. New Products and Services for Non-Endemic Dollars

The non-endemic market holds vast potential for RMNs, but only a few—such as Walmart Connect with its scale or Orange Apron with its vertical appeal—are well-positioned to capitalize. However, penetrating this market will require investment. First, RMNs will need to develop new expertise and skill sets - specifically in sales and campaign management where RMN campaigns will be measured and optimized against a whole new set of KPIs (welcome to the world of last-touch attribution). Second, sizable non-endemic advertisers will likely have agency intermediaries that RMNs with have to work through - particularly holding co. agencies. RMNs will have to meet specific tech, and financial requirements before agencies open IOs to them. 

‍4. Incrementality Measurement

As brands increase their investments in RMNs, retailers will need to prove incrementality to maintain and grow these budgets. This is especially critical for mid-to-long-tail RMNs, which may view incrementality as a key differentiator to increase their market share.

5. Improving Cost Structures

Running a media business at scale requires continuous cost optimization. It’s not sexy, but part of running a media business at scale is improving your cost structure. RMNs will explore a number of strategies, but the obvious ones are: pushing more self-service, putting pricing pressure on tech providers, and transitioning external sales teams to in-house.

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Retail Media Networks: Buy-Side

Brands will focus on driving top-line sales and category share, while agencies prioritize new business and revenue growth. Here’s what to expect:

1. Incrementality Measurement Becomes Standard

Emerging studies show no clear correlation between ROAS and iROAS, akin to when Comscore demonstrated that CTR and conversions were unrelated—prompting a shift to CPA measurement. With brands expected to add approximately $25 billion to RMNs globally (and $12 billion in the U.S.) in 2025, they will increasingly demand robust incrementality measurement.

2. RMNs will be to emerging brands what Meta is to DTCs. 

Similar to how Meta and Google provided DTC brands with reliable ad channels for efficient customer acquisition, RMNs’ ability to target specific customers and measure sales impact at the UPC level will appeal to emerging brands with modest budgets. Many of these brands may shift the majority—if not all—of their marketing spend to RMNs.

3. Agencies Lean Into RMN Profit Centers

Holding company agencies will continue investing in RMN capabilities to drive new business and revenue. However, their traditional arbitrage models will be trickier to implement due to retailers’ unique leverage and revenue goals. Agencies will seek new revenue streams, including: encouraging brands to allocate beyond Amazon and Walmart, bringing brand and non-endemic budgets to RMNs, where agencies may have more influence, and offering additional services such as digital shelf management, clean room integrations, and JBP planning tools.

Conclusion

Looking back at my past ad tech/mar tech predictions throughout my career, I’ve learned 3 things: 1) I need to stay humble because sometimes I don’t know squat 2) my predictions are predictably self-serving (i.e. related to my current professional situation), 3) big trends are driven by revenue. #3 is best compass for looking ahead. When companies lay out their priorities for the next year, 3 years, 5 years, etc. - they usually ask one question about each item on their roadmap - Will this make us more money? Retail Media is no different.

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