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  • Writer's pictureChris Moore

Retail Media Networks (RMN) 101!

person in grocery aisle with mobile phone looking at retail media advertising

What exactly is a Retail Media Networks? RMNs are the retailers’ collective internal advertising channels to sell advertising. Similar to any media outlet with the added benefits of first party data and built in consumer intent, the ability to market to a consumer exactly when they are shopping.

  • A form of RMNs have been around as long as in-store signs, newspaper ads and featured locations, i.e. Endcaps, have existed but Amazon is credited with the first digital RMN, launched in 2012.

  • Since then, dozens of other retailers have launched their own RMN.

  • According to a Forbes article, in 2022 Amazon walked with 76.9% of the total retail digital media spend. By comparison, Walmart came in as the second largest with 6.1% share.

-If you look at the numbers Amazon Has Over 310 MM active users Globally. With more than 80% of the users from the United States, that’s approximately 248 MM users, with all their first-party data – tough numbers for a brick-and-mortar retailer to compete with, but an anomaly does exist.

-From a pure revenue perspective Amazon annual revenue for 2022 was $513.98B, while Walmart reported $605.9 billion in net sales throughout fiscal year 2022. Something, or some group of things collectively should explain the disparity in the total share of RMN dollars vs. revenue.

  • Insider Intelligence tracks the five biggest retail media networks in the US in 2023 by ad revenue they are Amazon, Walmart, Instacart, eBay, and Etsy.

  • Statista estimates that $52 billion will have been spent on RMNs in 2023. McKinsey predicts that spending will roughly double to $100B by 2026.

  • In 2022, roughly 25% of U.S. advertisers used digital retail media to promote their products, with another 36% considering utilizing RMN.

So, what does all this mean? Are RMNs the be-all, end-all of the future of CPG advertising? Not yet, barriers do exist.

  • Poor return on investment (ROI)

  • The inability to prove incrementality (survey from Skai and BWG Strategy)

  • To prevent brands from abandoning their retail media investments, retail media networks must stop thinking like retailers and start thinking like media companies, according to analyst Andrew Lipsman.

This means embracing media standardization, providing multi-retailer third-party measurement, and operating less like a walled garden and adopting a more open approach.

  • Advertisers see retail media as a lower-funnel tactic.

  • Advertisers want more access and control. 63% of respondents say that “a centralized self-service platform that includes integrated planning and buying tools” would be a motivating factor when activating retail audiences or measurement on a demand-side platform.

  • Advertisers are feeling overwhelmed by the number of potential RMN partners. 57% of US advertisers say they’re willing to work with a maximum of four retail data partners, according to The Trade Desk Intelligence. The same percentage say they prioritize working with the biggest and/or most relevant RMNs.

  • Lack of campaign performance visibility/transparency, lack of interoperability, and increasing costs were also cited as some of marketers’ top challenges.

A Trade Desk survey of 201 marketers showed:

  • 53% of advertisers plan to increase their level of investment in retail data.

  • 38% of advertisers plan to maintain their level of investment in retail data.

  • Among those who aren’t currently using retail data, two-thirds (68%) expect to do so in the future.

  • Retail data and RMN pricing is a concern for about half (51%) of advertisers.

  • Among those using a DSP to activate retail data, close to three-quarters (73%) said that retail measurement is too expensive.

  • 66% agreed they do not have budget or resources available to allocate to activating retail data on DSPs.”

Clearly there are hurdles for RMN to overcome.

So, what does all this mean? Only time will tell, but money still talks. Statista projects worldwide digital ad revenue should exceed $1 trillion by 2027 with approximately 27% of the total being spent on RMN. That’s a whopping $270B. If RMNs can’t shore up all these concerns while simultaneously continuing to develop and perfect their opportunities brands are going to turn their attention to competing channels that can.


About A3 Media

A3 transforms media from an expense into a smart investment. Since 1997, we have successfully helped regional businesses launch new products, expand into new markets and increase sales through media plans that make every dollar spent do more. Our clients include brands such as Yuengling and Ashley Furniture. For more information about how A3 Media can help your digital marketing efforts, please call A3 Media at (610) 631-5500.

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