What Is a Retail Media Network?
A retail media network (RMN) is an advertising platform owned and operated by a retailer that allows brands to purchase ad placements across the retailer’s digital properties, including its website, app, and increasingly off-site channels such as connected TV and social media. Retailers sell targeted ad inventory directly to the brands in their stores, using first-party shopper data to build a closed-loop system where ad exposure and purchase behavior are measured in the same environment.
Amazon Advertising is the most prominent example, generating approximately $56 billion in ad revenue in 2024. Walmart Connect, Kroger Precision Marketing, Target’s Roundel, and Instacart Ads follow as major players. By 2028, retail media ad spend in the United States is projected to exceed $100 billion, according to eMarketer estimates.
Why Retail Media Networks Exist
Retailers hold something advertisers have struggled to obtain elsewhere: deterministic purchase data tied to real identities. A loyalty card program or logged-in e-commerce account tells a retailer exactly what a shopper bought, how often, at what price, and in which category. Retailers use that data to build audience segments and, critically, to close the attribution loop between an ad impression and an in-store or online sale.
The decline of third-party cookies accelerated RMN growth considerably. As programmatic advertising became less effective at targeting and measuring across open web environments, brands shifted budget toward walled gardens with reliable first-party data. Retail media networks became the natural beneficiary, sitting at the intersection of purchase intent and transaction data.
For retailers, ad revenue carries margins far higher than product sales. Grocery chains typically operate on 1-3% net margins on merchandise. Advertising margins can reach 70-90%, making RMNs a significant profit lever even at modest scale.
How a Retail Media Network Works
An RMN operates across three distinct inventory tiers.
On-Site Inventory
Sponsored product placements appear in search results and category pages on the retailer’s own digital properties. These are closest to the point of purchase and carry the highest intent signals. A brand bidding on “dish soap” within Walmart Connect is reaching a shopper who has already entered a buying context. Pricing is typically cost-per-click (CPC) for sponsored listings, with rates varying by category competitiveness.
Off-Site Inventory
Retailers extend their audience data beyond their own properties by activating segments through programmatic channels, social platforms, and streaming services. Kroger Precision Marketing, for instance, enables CPG brands to reach Kroger loyalty cardholders on third-party sites and measure whether those impressions drove in-store purchases. This tier typically uses CPM pricing and targets broader awareness objectives.
In-Store and Omnichannel Inventory
Digital screens, end-cap displays, and audio placements inside physical stores constitute a growing third tier. Walmart’s in-store TV network reaches more than 170 million shoppers per week across approximately 4,500 locations. This inventory bridges the gap between digital targeting and physical retail, enabling brands to influence purchase decisions at the shelf.
Key Metrics and Formulas
Marketers evaluate retail media campaigns on metrics that differ meaningfully from standard digital advertising benchmarks.
Return on Ad Spend (ROAS)
The primary performance metric for most RMN campaigns:
ROAS = Revenue Attributed to Ads / Ad Spend
A ROAS of 4.0 means the campaign generated $4 in attributed sales for every $1 spent. Amazon Advertising reports that sponsored product campaigns in competitive categories often achieve ROAS between 3.0 and 8.0, though this varies significantly by category, brand size, and bid strategy.
New-to-Brand Rate
Many RMNs report the percentage of sales generated from shoppers who had not purchased the brand in the prior 12 months. This metric separates campaigns that grow the customer base from those that simply convert existing buyers who would have purchased regardless.
New-to-Brand Rate = New-to-Brand Sales / Total Attributed Sales
Amazon’s benchmark for a healthy sponsored display campaign typically targets a new-to-brand rate above 40%.
Share of Voice
Within a category, brands track what percentage of available impressions or clicks they capture relative to competitors. A brand holding 35% share of voice in the laundry detergent category on a given retail platform has a significant visibility advantage over competitors.
The Advertiser’s Perspective
Consumer packaged goods brands were the earliest and most aggressive adopters of retail media, because RMNs allow them to reach shoppers inside the retailer where their products are already sold. A brand manager at Procter & Gamble allocating budget to Walmart Connect can directly correlate ad spend to sales lift within Walmart stores. That was previously impossible through broadcast or standard digital channels.
The challenge for brands is budget fragmentation. A CPG company selling through Amazon, Walmart, Target, Kroger, Instacart, and regional grocery chains faces the prospect of managing separate campaigns on a dozen or more incompatible platforms. Each uses proprietary measurement methodologies. Industry groups including the Interactive Advertising Bureau have worked toward standardizing RMN measurement, though significant inconsistency remains across networks.
Incrementality testing has become a standard practice for sophisticated RMN advertisers. Rather than accepting attributed sales at face value, brands run holdout experiments to isolate the actual causal effect of ad exposure from organic purchase behavior.
Incremental ROAS = Incremental Revenue / Ad Spend
Where incremental revenue equals total attributed revenue minus the estimated baseline revenue that would have occurred without advertising.
Retail Media vs. Traditional Trade Promotion
| Dimension | Traditional Trade Promotion | Retail Media Network |
|---|---|---|
| Primary format | Slotting fees, end-caps, circular ads | Sponsored listings, display, video |
| Targeting | Broad, store-wide | Audience-based, behavioral |
| Measurement | Sales lift estimates | Attributed transactions, ROAS |
| Budget control | Negotiated, fixed commitments | Self-serve, bid-based or managed |
| Reporting cadence | Periodic | Near real-time |
Emerging Trends
Retail media networks are expanding beyond traditional grocery and general merchandise into categories including financial services, travel, and healthcare. CVS Media Exchange and Walgreens Advertising Group apply pharmacy purchase data to pharmaceutical and health brand campaigns under strict compliance frameworks.
Retail media is also converging with programmatic advertising infrastructure. Retailers including Albertsons and Kroger have opened portions of their audience data to demand-side platforms, enabling brands to activate retail audiences within their existing programmatic workflows rather than through separate retail-specific interfaces.
The competitive pressure on mid-tier retailers to build network infrastructure has produced a category of RMN technology vendors. Companies including Criteo, CitrusAd, and Epsilon provide white-label platforms that allow regional retailers to launch sponsored product and display programs without building proprietary ad tech stacks.
Frequently Asked Questions
What is a retail media network?
A retail media network is an advertising platform built and operated by a retailer, allowing brands to buy ad placements using the retailer’s first-party shopper data. Amazon Advertising, Walmart Connect, Target’s Roundel, and Kroger Precision Marketing are among the largest examples in the United States.
How do retail media networks benefit retailers financially?
Retailers earn high-margin advertising revenue by monetizing their first-party shopper data. Advertising margins typically reach 70-90%, compared to the 1-3% net margins common in grocery merchandise, making retail media a significant profit driver even for mid-sized retailers.
What is a good ROAS for a retail media campaign?
A ROAS between 3.0 and 8.0 is typical for sponsored product campaigns on platforms like Amazon Advertising, though results vary by category, brand size, and bid strategy. Sophisticated advertisers also calculate incremental ROAS using holdout experiments to isolate true campaign impact from organic purchase behavior.
How does retail media differ from traditional trade promotion?
Traditional trade promotion involves negotiated fees for physical placements such as end-caps and circular ads, with limited measurement. Retail media networks offer audience-based digital targeting, near real-time reporting, and attributed transaction data including ROAS, giving brands far more control and visibility over campaign performance.
Which retailers have retail media networks?
The largest retail media networks include Amazon Advertising, Walmart Connect, Kroger Precision Marketing, Target’s Roundel, Instacart Ads, CVS Media Exchange, and Walgreens Advertising Group. Mid-tier retailers increasingly build RMN capabilities using white-label platforms from vendors including Criteo, CitrusAd, and Epsilon.