Marketers are still facing challenges in retail media networks (RMNs), but more than 90% say it’s the single most important channel for their campaigns, a new report found.
The report from Skai, The State of Retail Media 2025 (registration required), done in collaboration with The Path to Purchase Institute, is based on a survey of marketers at U.S. consumer product brands, manufacturers and agencies.
Ninety-two percent said retail media was the most important major retail channel, a double-digit increase from the previous year. The increase came despite one-fourth of marketers citing difficulties integrating retail media with other digital channels and 32% having concerns about ROI.
Other findings from the Skai report include:
- Only 24% report fully integrating retail media with other channels, with budget constraints and operational silos hindering progress.
- Measuring incrementality continues to be a priority, with 56% of those surveyed now reporting proficiency, a 26% increase from last year.
- Consumer goods marketers are increasingly prioritizing platform consolidation, with 57% emphasizing its importance.
- AI usage within retail media is rising as well, with 42% reporting high maturity.
- 94% identified significant opportunities in using connected TV (CTV) as part of their retail media mix.
Dig deeper: 2025 is the year for B2B brands to embrace CTV
Retail media spending expected to increase
A separate study from TransUnion, also in collaboration with The Path Purchase Institute, found 70% of companies plan to increase retail media budgets in 2025.
The 2025 Annual Trends Study found similar retail media challenges, such as scale, targeting and measurement, which remain key obstacles to broader use of RMNs.
In the TransUnion study, 80% said retail media is as effective or more effective than other digital channels. Whereas annual trade budgets have traditionally formed the basis for retail media budgets, the survey found 70% of retail media spending was incremental to those annual budgets.
The study found significant differences in retail media networks across the industry. On average, brands were 3.4x more likely to rate the largest national retailer platforms as excellent or very good in capabilities related to scale, targeting and measurement.
Brands currently work with an average of eight retail media networks, the report found, with 49% engaging with no more than five networks. National retailer platforms lead in adoption, reflecting their competitive advantage in targeting, traffic-driving, and measurement capabilities.
Dig deeper: Retail media networks: What you need to know
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# **Marketers Prioritize Retail Media as the Preferred Channel Despite Challenges**
In the ever-evolving digital marketing landscape, **retail media** has emerged as a dominant force, attracting significant investment from brands and advertisers. As traditional advertising channels face increasing challenges—such as data privacy regulations, the decline of third-party cookies, and shifting consumer behaviors—retail media networks (RMNs) have become a preferred choice for marketers. Despite some hurdles, businesses are prioritizing retail media due to its ability to deliver **highly targeted, data-driven advertising** with measurable results.
## **The Rise of Retail Media**
Retail media refers to advertising within a retailer’s ecosystem, including sponsored product listings, display ads, and video ads on retailer websites, apps, and in-store digital displays. This model allows brands to reach consumers **at the point of purchase**, leveraging first-party data from retailers to enhance targeting and personalization.
The retail media boom is driven by several key factors:
1. **The Decline of Third-Party Cookies**
With Google phasing out third-party cookies and increasing restrictions on data tracking, advertisers are seeking alternative ways to reach consumers. Retailers, who own vast amounts of first-party shopper data, provide a **privacy-compliant** solution for targeted advertising.
2. **Strong ROI and Measurable Performance**
Retail media networks offer **closed-loop measurement**, allowing brands to track ad performance directly to sales. This level of attribution is more precise than traditional digital advertising, making retail media an attractive investment.
3. **Growing E-Commerce and Omnichannel Shopping**
The rapid growth of e-commerce and hybrid shopping behaviors (such as buy-online-pick-up-in-store) has increased the importance of retail media. Consumers are spending more time on retailer websites and apps, creating valuable advertising opportunities.
4. **Retailers Monetizing Their Platforms**
Major retailers like **Amazon, Walmart, Target, and Kroger** have built sophisticated retail media networks, offering brands premium ad placements and rich consumer insights. This trend is expanding beyond e-commerce giants, with grocery chains, pharmacies, and specialty retailers also launching RMNs.
## **Challenges in Retail Media Adoption**
Despite its advantages, retail media comes with challenges that marketers must navigate:
1. **Fragmentation Across Retailers**
Unlike traditional digital advertising, where brands can run campaigns across multiple platforms seamlessly, retail media is highly **fragmented**. Each retailer has its own network, ad formats, and measurement tools, making it difficult for brands to scale campaigns efficiently.
2. **Limited Standardization and Transparency**
There is no universal standard for retail media measurement, making it challenging for marketers to compare performance across different RMNs. Some retailers provide **limited visibility** into ad performance, creating concerns about transparency and return on investment.
3. **Rising Costs and Competition**
As more brands invest in retail media, **ad costs are increasing**, particularly on platforms like Amazon. Smaller brands may struggle to compete with larger advertisers who have bigger budgets for premium placements.
4. **Balancing Retailer and Brand Objectives**
Retailers control the ad inventory and prioritize their own business goals, which may not always align with a brand’s marketing strategy. This can lead to **conflicts in ad placements, pricing, and access to consumer data**.
## **How Marketers Are Overcoming These Challenges**
Despite these obstacles, marketers are finding ways to maximize the effectiveness of retail media:
– **Investing in Data and Analytics**: Brands are leveraging **AI-driven insights** and advanced analytics to optimize their retail media spend and improve targeting.
– **Diversifying Across Multiple RMNs**: To reduce dependency on a single retailer, brands are spreading their budgets across multiple retail media networks.
– **Advocating for Standardization**: Industry groups and advertisers are pushing for **greater transparency and standardized measurement** to improve comparability across RMNs.
– **Integrating Retail Media with Broader Marketing Strategies**: Rather than treating retail media as a siloed channel, brands are incorporating it into their **omnichannel marketing approach**, aligning it with social media, search, and traditional advertising.
## **The Future of Retail Media**
Retail media is expected to continue its rapid growth, with **global retail media ad spend projected to surpass $100 billion by 2025**. As retailers refine their advertising platforms and improve measurement capabilities, retail media will become even more attractive to marketers.
To stay competitive, brands must **adapt to the evolving retail media landscape**, leveraging data-driven strategies and cross-channel integration to maximize their impact. While challenges remain, the benefits of retail media—such as **precise targeting, strong ROI, and access to valuable first-party data**—make it a critical component of modern marketing strategies.
### **Conclusion**
Retail media has cement
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