Retail media networks explained & the top networks you should know

What are retail media networks? These digital advertising networks are all about utilizing existing platforms to reach new audiences. Think about it: if you want to meet new people, you probably go hang out with your most popular friends, right? Or, if you want to make connections with a particular crowd, maybe you’ll talk to your buddies who know certain people. Dave can get you into the D&D game next week, but only Sophia knows the rock-climbing crowd.

It's the same in advertising. If you always stick with the same advertising channels, you can only reach new customers if those people happen to start using that channel. But if you proactively seek out advertising space on platforms your target audience loves, you can make marketing magic happen.

And guess what 2.71 billion people worldwide are doing every day: shopping with online retailers. Many of these retailers make their channels available to brands, helping them reach audiences they’d struggle to engage using their existing online presence.

Introduction to retail media networks

Retail media networks have existed since 2012. It will come as no surprise to anyone that the first successful network was run by Amazon. To this day, Amazon continues to dominate the market, with 37% of retail media network ad spend allocated to Amazon ads in 2023.

Today, there are more retail media networks available for brands to leverage, including some fairly niche ones that help businesses reach ever-finer segments of their target audience.

What is a retail media network?

When you shop online, you’ll notice that some listings are sponsored. These may even refer you to an off-site page or show you a video about connected products. For example, if you’re really serious about that rock-climbing trip, you might be searching for ropes and crampons. But at the top of your search, you might see an ad for climbing safety helmets and similar gear.

That’s because the climbing helmet brand will have paid the retailer to advertise on their network. The term “retail media network” refers to advertising space provided by an online retailer. Brands pay retailers to use this space, or they may go through a third-party advertising agent that has an agreement in place with the retailer.

This is how you get to see “sponsored” ads on Amazon, Walmart and other retail sites. But also, those short videos that pop up and banners for other brands? That’s right — they’re also using space on the retailer's media network. These ads are sometimes called commerce media simply because they use the commerce space to reach new people.

Evolution and growth of retail media networks

Retail media networks are a type of advertising technology or AdTech. The retailer creates a platform that brands and advertisers can leverage to show their products or services to the retailer's customers. It’s a little like taking a walk down to a farmer’s market or arts and crafts fair. Hardly any of the stalls you’ll browse actually own the space you’re wandering around. Yet they’ve all got compelling goods to look at, so as long as they pay the market space owner, everyone’s happy.

A retail media ad works the same way: the retailer gets paid, companies get advertising space and consumers get more variety.

Over recent years, the retail media ads market has exploded. These advertising channels reached a value of $30 billion between 2016 and 2021, which is faster growth than both video and social media advertising. Experts predict ad spend in this arena to more than double by 2027 to a value of over $106 billion.

One driver behind this was the planned phasing out of third-party cookies. While its plans have recently been canceled until further notice, Google was going to start blocking cookies that track consumer behavior and save personal information starting in October 2024. This would have prevented many brands from understanding how consumers behave on their sites. Whereas previously, they would have had a wealth of data on browsing history to help personalize marketing efforts, now brands will have to rely on first-party data that comes directly from the individual themselves.

Partnering with retailers to utilize their spaces is an excellent way to utilize the retailer’s customer data to boost sales and reach new audiences.

Retail media networks don’t just include digital spaces. If a retailer has a brick-and-mortar store, brands can also pay to advertise here. Those in-store ads are also using space in the media network, only this time, it’s physical media rather than digital.

Key players in retail media networks

So, who are the big players in the retail media network scene? As interest in this method of advertising continues to grow, more and more retailers are likely to create their own platforms for other companies to leverage as advertising space. The following online giants are the heavyweights to look out for right now.

Amazon Advertising

If you want to improve your retail media strategy, who better to look at for inspiration than Amazon? Amazon sells everything from marbles to motherboards, either via its own warehouses or through third-party sellers that use its online marketplace.

Because of this, they have incredible volumes of first-party consumer data for other companies to leverage. Amazon offers sponsored ads, image-based display ads and even video advertising.

Walmart Connect

Walmart is the largest physical retailer in the United States and now has its own advertising platform Connect. In 2023, the media network earned $3.4 billion for the retail giant. As well as Amazon-style on-site ads, Walmart Connect users can opt to have their products or services promoted in-store, including on the self-checkout screens.

Target Roundel

Target has been selling ad space for years but, like other retailers, has seen a recent boom in brands wanting to utilize that space. Roundel, the brand’s media network, earned Target $1.5 billion in 2023 and experienced the same growth in Q1 2024 as the whole of last year combined. This places Target in the top five retail media networks in the United States, with further growth expected this year.

Niche networks like Home Depot and Wayfair

Not all retailers sell every category of goods. In fact, it could benefit brands to work with retailers who have a more niche audience. Home Depot, for example, focuses on home improvement products, from paint to plants to pizza ovens. They’ve seen continuous growth by offering advertising space to brands both online and in-store. Home Depot recently rebranded its retail media network from “Home Depot Retail Media+” to Orange Apron Media, leaning on the strong association the brand has with the color orange.

Wayfair is another homewares brand dipping a toe into the retail advertising waters. Wayfair Advertising allows brands to promote individual products or whole categories on their website, app or print media.

If you’re a company trying to make inroads into the homeware space, utilizing niche networks like these is a great way of reaching a well-established audience.

Benefits of retail media networks

Like all marketing and advertising tools, retail media networks must benefit both the space provider and the buyer. However, it’s also important that consumers or B2B buyers gain an advantage. Let’s take a look at a few of the key benefits for all parties.

For retailers

Retailers who offer advertising space create an additional revenue stream. It’s that simple. They can continuously sell their online channels as amazing places to reach new leads, backing those claims up with data from previous successes.

However, that’s not the only benefit for retailers. They also gain additional customer insights, seeing which advertisements attract what audience. This data helps them hone their own marketing campaigns and improve the platform algorithms to target buyers better.

For advertisers

Brands and advertisers who choose retailers’ channels gain access to their enormous swathes of first-party data. Experienced retailers can use this data to ensure ads get seen by the people most likely to purchase those products or services.

This improved targeting is easier to achieve by leveraging retailers’ experience, data and existing audience. In most cases, brands should see improved ROI (return on investment) for their advertising spend.

For consumers

Consumers and B2B buyers get the benefit of a more personalized shopping experience. Rather than trawling through reams of irrelevant products at unrealistic prices, they should see goods that solve their problems and are affordable.

With multiple brands vying for consumers’ attention, buyers are more likely to see fair prices and less likely to see over-inflated costs. Advertisers know they will get ignored if they price themselves out of the market, so they tend to focus on prices that reflect the value of the product and the associated brand.

How retail media networks work

As you’ve already seen, there are several ways advertisers can use a retailer’s space. Along with sponsored ads, you may get the option to use some of the features of a retail media network.

Advertising on search result pages

Like many types of online advertising, retailers utilize search engines to place their products and those of their affiliated brands at key spots in search engine results pages (SERPs). Advertisers who use the network may be able to opt to be included in these ads.

Promotions on home and product detail pages

A common retail ad technique is for brands to pay to appear prominently on the home page or product search/category page. Advertisers usually bid for these spots in much the same way as they do for pay-per-click (PPC) ads on Google and other providers.

Use of first-party data for targeting

Retailers also offer algorithmic targeting, utilizing their own data to show the ads where they will have the most impact.

Choosing the right retail media network

So, it’s clear that with the right retail media network, you can reach a new audience that is potentially enthusiastic about your products and services. But how do you know which one to pick?

Budget considerations

Always look at the costs of a network before committing. Consider:

• Do they cap their charges, and if not, how can you avoid going over budget?
• Is the pricing clear?
• Do you have the budget to cover these ads?

While advertising is an essential aspect of reaching new customers, if it gouges your bottom line too significantly, it can be the opposite of a good investment.

Size and reach of the network

It’s also worth considering who the network targets and how many people you could potentially reach. Again, weigh up your costs. If you decide to go with a big network because of its reach, but the price of this takes you way over your advertising budget, you could end up severely out of pocket. See if the retailer provides statistics for potential ROI for businesses in your niche.

Niche relevance

Speaking of niches, why not opt for a retailer that already specifically targets your audience? Knowing that your goods will be placed in front of people likely to have an existing interest makes niche retail networks very attractive to some brands.

Performance measurement tools

Finally, it’s critical that you understand how your ads are performing. Make sure any retail media network you go with can give you that data to help you understand the success (or otherwise) of campaigns.

Top retail media networks to watch in 2024

We’ve already looked at the impact mega-retailers like Amazon and Walmart have in the retail media space. However, there are other networks brands can leverage to get their products and services in front of the right buyers. Here are just a few top retail media networks to look out for over the coming months.

eBay Ads

In 2023, eBay posted ad revenue of $367 million — a 35% increase on the previous year. The auction site uses a range of techniques to ensure ads are targeted at the right people, but also to attract sellers who may not have used their advertising services before.

Similar to some social media advertising, the platform will suggest an ad budget to sellers and indicate how much traction they should expect to see from that spend. The online marketplace’s expertise with C2C (consumer-to-consumer) sales helps them provide highly targeted advertising that helps sellers reach more people with their listings. eBay also leverages other advertising spaces such as Bing and Google to draw more traffic to the site.

Instacart

Instacart is, technically, a retail technology company rather than a retailer. They provide online ordering and delivery services for well over a thousand retailers, from major brands to local grocery stores. Like many of the retailers they serve, though, they’ve opened up their online space for advertising.

Grocery stores have a unique opportunity to leverage data from a company that works with more grocers and similar retailers than just about any other firm in the United States. Instacart recently announced a suite of new tools including ways to allow emerging brands to showcase their goods to retailers.

These discovery tools will allow stores and online retailers to stock their shelves directly from Instacart — and provide new brands and wholesalers with much-needed exposure and marketing space.

Connected retail media platforms: Criteo, CitrusAd and others

Of course, not all retailers are arranging these networks themselves. Building an advertising platform and arranging all the financial complexities and technical algorithms behind it is challenging.

It’s like trying to get all your friends to come to that one big bash you want to throw for your bestie. Sure, you could have a hundred individual message chains going — but that’s exhausting, and you’ll lose track of who’s said what and when. You’re more likely to delegate some of the work, set up a few WhatsApp groups, then sit back and let your buddies (and technology) do that legwork for you.

That’s what third-party platforms do for retailers. They take the hassle out of setting up a media network by providing a pre-built solution retailers can leverage to connect to brands who want to advertise using their space.

CitrusAd is one example. It offers white-label media network solutions, meaning retailers get to completely brand the platform as their own. CitrusAd also offers plenty of monitoring and analytics solutions so retailers can report to their clients on how their ads are performing.

Criteo offers similar services combined with programmatic advertising and customer retargeting tools. Criteo focuses on highly personalized advertising across multiple channels. Other alternatives within this space include AdRoll, PromoteIQ and Inhabitad.

Challenges and considerations of retail media advertising

While you may be excited to up your retail media game and launch ads across multiple channels, it’s important to understand that it’s not always plain sailing. Setting up ad campaigns is one thing — seeing success is another.

Let’s take a look at a few things you should consider before deciding to advertise on e-commerce platforms.

Unequal playing field for smaller brands

Like all advertising arenas, the biggest space goes to the brands with the biggest money. Although some networks, like Instacart, are putting initiatives in place to help support newer brands, for most small firms, affording space with major retailers is prohibitively expensive.

Always ensure you understand exactly what the costs are before you commit to utilizing any advertising space. If there’s the option to set a capped budget, utilize that — ideally with the option to raise that cap if you start to see success.

Data silos and fragmentation

Businesses that use more than one retail network may discover that combining the data from those campaigns is more difficult than they realize. Retailers don’t tend to share data with each other, so businesses must implement their own data integration solutions to combine and understand their campaign performance across multiple channels.

Fragmentation — the lack of standardization across networks — is another challenge. Each network has its own way of working which can become confusing and cumbersome to their clients.

Measuring success across platforms

Some networks proactively offer analytics and reporting. Others provide minimal data. Again, it can be down to the advertiser or brand to find their own reporting solutions to understand how these retail ads are performing for them. Investing in marketing and advertising dashboards that can connect to multiple streams of data is an essential aspect of working with multiple advertising providers.

What is a retail media network? With the right research, it could be the key to unlocking exponential business growth for many firms. Expect to see more brands utilize retail media advertising in the coming months and years — especially as online spaces move away from reliance on third-party data.

Despite the challenges, retail media companies and retailers themselves are one of the fastest-growing spaces for advertising. Any brand looking to utilize a retailer’s first-party data for growth and expansion should look into the possibilities provided by banner ads, sponsored listings and even in-store advertising with retailers who can help them reach new audiences.