The Rise of Retail Media: How Programmatic is Powering the Next Big Ad Channel

In the ever-shifting landscape of digital advertising, a new titan is emerging: retail media networks (RMNs). What started as a niche opportunity for brands to advertise on retailer websites has exploded into a multi-billion-dollar ecosystem, with major players like Amazon Ads, Walmart Connect, and Target’s Roundel monetizing their platforms like never before. Retail media is no longer a side hustle for these giants – it’s a dominant force reshaping how brands connect with consumers. At the heart of this transformation? Programmatic advertising, the engine driving scale, precision, and efficiency in this fast-evolving ad channel.

Here’s why RMNs are taking center stage, how programmatic technology is fueling their rise, and what it all means for the future of digital ad buying.

The Retail Media Boom: Why Now?

Retail media networks are advertising platforms built by retailers to monetize their digital real estate – think product pages, search results, and checkout screens. What makes them so compelling is their access to something advertisers crave: first-party data. With privacy regulations tightening and third-party cookies crumbling, retailers’ troves of shopper insights – purchase history, browsing behavior, and loyalty program data – have become goldmines for targeting.

The numbers speak for themselves. Retail media ad spending is projected to surpass $60 billion globally in 2025, according to eMarketer. In the U.S. alone, Amazon Ads’ ad business, a pioneer in the space, raked in over $47 billion in 2023, proving that RMNs are no longer experimental – they’re essential. But it’s not just Amazon Ads. Walmart Connect, Target’s Roundel, and even niche players like Instacart are doubling down, turning their platforms into full-fledged ad ecosystems.

So, what’s driving this surge? Consumers are spending more time (and money) online, and retailers are capitalizing on their ability to reach shoppers at the point of purchase – a moment when intent is sky-high. Enter programmatic advertising, the glue that ties it all together.

Programmatic: The Backbone of Retail Media Scale

Programmatic advertising – automated, data-driven ad buying – has long been the workhorse of digital campaigns, but its role in retail media is a game-changer. RMNs rely on programmatic tech to deliver highly targeted, real-time ads across their platforms, connecting brands with the right consumers at the right moment.

Here’s how it’s evolving to power this channel:

Precision Targeting with First-Party Data

Retailers’ rich datasets allow programmatic platforms to serve hyper-relevant ads. A shopper searching for “running shoes” on Walmart.com might see a programmatically placed ad for Nike via Walmart Connect, tailored based on their past purchases or viewed items. This level of granularity beats traditional display ads hands down.

Dynamic Creative Optimization (DCO)

Programmatic isn’t just about placement – it’s about personalization. DCO lets brands tweak ad creative on the fly, swapping in product images, pricing, or promotions based on what’s in a shopper’s cart or what’s trending in-store. For RMNs like Target’s Roundel, this means ads feel native and seamless, boosting engagement.

Closed-Loop Attribution

Unlike traditional digital channels, RMNs offer a unique advantage: they can track a consumer from ad impression to purchase within the same ecosystem. Programmatic platforms are adapting to provide advertisers with detailed attribution metrics – think sales lift, ROAS (return on ad spend), and even in-store impact – making it easier to prove campaign value.

Scalability Across Networks

As more retailers launch RMNs, programmatic tech is stepping up to unify the fragmented landscape. Demand-side platforms (DSPs) are integrating with multiple RMNs, letting advertisers buy inventory across Amazon Ads, Target’s Roundel, and others from a single interface. This scale is critical as retail media grows beyond a handful of big names.

Why Advertisers Should Care

For brands and agencies, retail media isn’t just another channel – it’s a strategic imperative. Here’s why:

Proximity to Purchase: Ads on RMNs hit consumers when they’re ready to buy, driving higher conversion rates than social or search in many cases.

Privacy-Proof Targeting: With cookies on the way out, RMNs offer a compliant, future-ready alternative for reaching audiences.

Competitive Edge: Early adopters can lock in prime inventory and build relationships with retailers before costs skyrocket (and they will).

But it’s not all smooth sailing. The rise of RMNs has its challenges – walled gardens, inconsistent measurement standards, and rising CPMs as demand grows. Programmatic tech will need to keep pace, offering transparency and flexibility to keep advertisers in the driver’s seat.

Who’s Leading the Retail Media Revolution?

Several major players are shaping the future of retail media, leveraging programmatic to dominate this space:

Amazon Ads: The trailblazer, Amazon Ads offers an advanced DSP with inventory spanning Amazon-owned properties and third-party sites, fueled by its unparalleled shopper data.

Walmart Connect: Rapidly gaining ground, this network integrates retail media across Walmart’s massive online and in-store ecosystem, offering brands scale and precision.

Instacart Ads: A standout in grocery delivery, Instacart Ads brings programmatic to high-intent shoppers, delivering placements with impressive ROI potential.

Retailer-Owned DSPs: Beyond the big names, more retailers are launching their own demand-side platforms, enabling brands to buy programmatic ads directly within their ecosystems – think Kroger Precision Marketing or Home Depot’s Retail Media+.

As competition intensifies, these leaders are expanding beyond traditional digital placements. From in-store digital screens to off-site programmatic campaigns powered by first-party data, RMNs are redefining what’s possible in ad delivery.

The Future of Digital Ad Buying

Retail media is more than a trend – it’s a fundamental shift in how digital advertising works. As RMNs mature, expect programmatic to play an even bigger role, bridging the gap between online and offline, refining contextual targeting, and integrating emerging tech like AI-driven bidding. We’re already seeing retailers experiment with off-site extensions – think ads on publisher sites or CTV – powered by the same programmatic pipes. For instance, Walmart Connect’s recent moves into connected TV signal where the industry is headed.

For ad tech companies, the opportunity is clear: build tools that help advertisers navigate this complex, high-stakes ecosystem. For brands, the message is equally simple: get in now, or risk being left behind.

The rise of retail media isn’t just about retailers cashing in – it’s about redefining the ad landscape. Programmatic is the fuel; RMNs are the rocket. Together, they’re blasting digital advertising into its next frontier.

Want to ensure you’re on the wave of innovations in ad tech? Let’s talk.