With every company entering the ad business, here’s what to expect from retail media networks in 2025

Now, retail media networks — whose leaders include Amazon, Walmart and Target — are expected to make up one-fifth of worldwide digital ad spend in 2024, raking in $140 billion, up from $115 billion in 2023, according to eMarketer. Specialty retailers like Home Depot and Wawa, as well as companies beyond traditional retailers, like Chase Bank, United Airlines and now Re/Max, have recently unveiled their own ad offerings. “The basic decision to run sponsored ads on your website and your app and so on is a fairly straightforward one, and it’s very profitable,” Bryan said. 

This rapid growth rate is expected to continue to about $166 billion in digital retail ad spending in 2025, eMarketer forecasts. Retail media executives expect companies to continue to address the technology behind the scenes to power these businesses as well as expand their in-store capabilities.

Advertising now accounts for almost a third of Walmart’s $6.7 billion operating income. Walmart Connect saw 28% year-over-year growth in the third quarter. Kroger does not share ad revenue but has projected 20% growth for its media business, Kroger Precision Marketing, for the full year. While these retail leaders have reported strong growth, Bryan said not all retailers are seeing the same results, and companies don’t always disclose advertising figures in earnings reports.

Retail media intelligence platform Mimbi estimates there are more than 200 retail media networks at this point. This year, Saks launched the Saks Media Network, promoting access to its luxury shoppers through sponsored product ads and on-site display banners. Convenience store retailer Wawa launched Goose Media Network to help advertisers target customers and sell banner ads on its website and app. Goose Media Network’s website says videos at the pump as well as ads at kiosks and social media are coming soon.

Room for improvement

Bryan said that while many have entered the space, not all are seeing such rapid growth, and it hasn’t been easy for them to maintain high growth rates. To keep revenue up, he expects retailers to invest in new types of content experiences and ad technology next year and make organizational changes.

Lowe’s rebranded its ad business this year as Lowe’s Media Network and launched four new channels — email, in-store audio, paid search and direct mail for install services — as well as additional placements on the Lowe’s app.

“In 2025, we’re increasing our service levels on our existing full funnel offering to accelerate programming speed-to-market and deliver faster campaign results and insights,” Lowe’s Media Network general manager John Storms said in a statement. “We are also expanding program buy-in opportunities that connect brands to priority Lowe’s customers through loyalty, and an expanded customer base through our relationship with the NFL.”

Drew Cashmore, a former Walmart Connect executive who now works with tech provider Vantage, said retailers are looking for ways to make it easier for advertisers to buy. But because they can’t all match the spending power Walmart had when it built its media business, they are often turning to outside companies to streamline all the spreadsheets, email chains and various fragmented software systems they’ve used to manage their retail media businesses in the past.

“The smaller guys are trying to figure out how do they play against a well-funded tech architecture of the Walmarts and Amazons of this world,” Cashmore said. “Historically, they’ve gone through this build scenario where they’re all trying to create their own toolset. What’s changed in the last year is this recognition that they need to better partner.”

New types of inventory

In-store retail media is another area in which companies are rapidly investing in their advertising capabilities, adding digital screens around stores and building out the data platforms that power them. EMarketer forecasted earlier in 2024 that in-store retail media ad spending will grow about 47% in 2025.

“Expanding our portfolio to in-store media is an important development in our journey to
be a best-in-class retail media network and solidifies our continued promise of offering full
funnel omni-channel solutions for our brand partners,” Storms at Lowe’s said.

In another example, Iowa-based Hy-Vee, which operates 570 grocery stores in the Midwest, announced in December it would partner with retail media tech provider Grocery TV to power 10,000 screens at entrances, checkouts, service departments, aisles and end caps. Grocery TV provides an online tool for retailers and their advertisers to manage in-store campaigns.

Marlow Nickell, Grocery TV founder and CEO, told Modern Retail he expects about half of grocery retailers to have in-store retail media networks by the end of 2025. Because of the required tech investment of buying the digital screens, he said it will be easier for smaller retailers with a few hundred stores.

“Their stores are where the vast majority of their audience is at and where they’re transacting, and so it’s kind of a natural thing to grow into,” Nickell said.

Grocery TV’s in-store media platform powered about 4,000 stores. Nickell said the company’s network of stores has grown about 30% each year since its inception in 2016.

“I think there’s a chance that will actually accelerate next year, just because it feels like we’re at this sort of inflection point where pretty much every retailer feels like they need to be doing this,” Nickell said, adding that more retailers have been coming to them to help launch their in-store media networks instead of having to be sold on it. “That had never been the case in the past.”