TL;DR: Retail media networks are now the fastest-growing digital advertising channel, expanding at roughly twice the rate of traditional search ads as brands chase shopper data and closed-loop measurement. This shift is forcing marketers to rebalance budgets toward retailer-owned platforms, with growth expected to continue through the decade.
A New King of Digital Advertising
For two decades, search advertising has been the reliable engine of digital marketing. That dominance is now being challenged by retail media networks (RMNs)—ad platforms owned by retailers like Amazon, Walmart, and Target that let brands reach shoppers at the point of purchase. According to eMarketer, global retail media ad spending surpassed $140 billion in 2024 and is projected to exceed $230 billion by 2028, growing at a compound annual growth rate of nearly 20%. By contrast, search advertising is expanding at a far more modest 8–10% annually. In several major markets, retail media’s year-over-year growth has been more than double that of search.
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Why Advertisers Are Shifting Budgets
The appeal is straightforward: retail media offers something search often cannot—closed-loop attribution. Advertisers can see not just who clicked, but who actually bought, because the ad runs on the same platform where the transaction occurs. “Retail media has collapsed the distance between impression and purchase,” says Sarah Marchetti, a retail analyst at Forrester. “That measurability is why CMOs are moving dollars from upper-funnel search and display into RMNs, even at higher CPMs.”
Another driver is first-party data. As third-party cookies depreciate, retailers’ logged-in shopper audiences become premium inventory. Amazon remains the dominant player, capturing roughly 75% of U.S. retail media spend, but Walmart Connect, Instacart, and Kroger Precision Marketing are growing faster as they open their networks to more advertisers and expand off-site placements.
What Comes Next
Analysts expect three developments. First, consolidation: smaller RMNs will struggle to scale, pushing partnerships or acquisitions. Second, standardization: the IAB and other bodies are pushing common measurement frameworks to reduce fragmentation. Third, convergence with connected TV and streaming, as retailers bundle on-site, off-site, and video inventory into unified offerings.
“We’re moving toward a world where every retailer is a media company,” says Marchetti. “The winners will be those that can prove incrementality, not just impressions.”
For marketers, the implication is clear: retail media is no longer a test budget. It is becoming the core of performance strategy—and search’s long reign as the default may finally be ending.
FAQ
Q: What exactly is a retail media network?
A: A retail media network is an advertising platform operated by a retailer that lets brands place ads on the retailer’s website, app, or off-site channels, using the retailer’s shopper data to target and measure campaigns.
Q: Why is retail media growing faster than search ads?
A: Retail media offers closed-loop attribution and access to first-party shopper data, which lets advertisers connect ad spend directly to sales—an advantage search advertising cannot always match, especially as privacy rules limit third-party tracking.
Q: Will retail media eventually replace search advertising?
A: Not entirely, but it will likely absorb a growing share of performance budgets. Search remains essential for demand capture, while retail media excels at influencing purchase decisions closer to the point of sale, making the two increasingly complementary rather than strictly competitive.
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