Amazon—the largest driver of spending in this channel—has recently seen modest retail media revenue growth relative to its past performance. As a result, we have revised our retail media forecast down from where it was in H1 2024. (The insights in this report are based on our H2 2024 forecasting data.) We now expect US retail media ad spending to have a compound annual growth rate (CAGR) of 17.2% from 2024 through 2028, down from the 24.1% we predicted earlier last year.

But even with this downward revision, we still expect retail media to remain one of the fastest-growing segments of the media ecosystem. Advertisers will spend more than $62 billion on retail media in 2025, an increase of more than $10 billion YoY.

The channel’s growth prospects will be somewhat tempered by issues like advertisers’ struggles with retail media’s lack of standardization and measurement challenges. But retail media still offers a way to fulfill two key, complementary needs that advertisers have. One is a scaled, efficient environment for driving measurable sales. The other is deterministic, privacy-compliant data that can be used to target consumers who sit at the top or middle of the purchase funnel.

Consequently, most retail media advertisers will continue to spend. A full three-quarters of advertisers said they will increase their retail media ad spending in 2025, per November 2024 Ebiquity data. And almost one-third said they were targeting a double-digit increase in their spending.

That extra spending could bring to a head several issues that have been simmering for some time, particularly for advertisers that have yet to come up with a coherent vision for how their retail and national media budgets work together.

"There’s going to continue to be this conversation between retailers and brands about ‘what is the right balance?’” said Jeff Daniel, general manager of retail data partnerships at The Trade Desk. “Now that there’s all this retail data-enabled off-site scale I can see and use, how do I reconcile it with my national media?”

Advertisers’ appetite for experimentation will be curbed but not eliminated

Used a certain way, retail media networks (RMNs) offer the prospect of unusually high ROI to advertisers. But the complexity of spending with too many of them—never mind comparing the results—seemed like it could limit the upside of long-tail RMNs.

But that hasn’t completely snuffed out brands’ willingness to try new ones. The percentage of CPG brands spending on four or more RMNs rose to 85% in 2024, up nearly 20 points YoY, according to the Path to Purchase Institute.

Challenger brands that might not be locked into multiple joint business partnerships—and that are still hungry to learn how their products resonate with different audience segments—are showing a particular openness to experimenting. “Clients are in more of an expansion, test-and-learn mindset with some of these RMNs,” said Sejal Sheth, vice president of digital commerce and media at Harvest Group.

Read the full report, Retail Media Forecast Report Update.