The Challenges of Retail Media’s Evolution

Retail media is now a full funnel, global channel. Spend reached about $175bn in 2025 and is set to pass $196bn in 2026, representing 16% of all advertising spend.

This is no longer a US story. European spend on retail media is growing at twice the rate of digital overall. And it’s growing for a reason. Retail media lets advertisers target real customers using the retailer’s own purchase data, close to the moment they buy, and then tie that exposure back to actual sales. Targeting, proximity to purchase and closed loop proof of return in one place. That’s a strong promise.

However, treat retail media spend as a bottom of funnel trade line and it stays unproven and underused: you can’t see what it returns, and the brand budget that could fund it never arrives. That’s money left on the table.

Ask 100 consumer brands “Who owns retail media?” and you’ll likely get several different answers: sales, brand, trade, media, e-commerce.

That confusion is expensive. When no one clearly owns retail media and the spend is filed as a trade discount, you can’t see what it returns, brand budget can’t reach it, and waste creeps. No one is accountable for proving it works.

The root of this problem is obvious: Retail media stopped being a trade line and turned into a critical media channel – or what our study with ISBA refers to as a “fusion of commercial and marketing.”

Key ways retail media has evolved

1. From trade line to media channel: Media used to be relatively simple to buy. A trade marketing manager might book a fixed number of impressions for a set period or secure a retailer homepage takeover for a flat fee. Success was often measured on delivery rather than business outcomes. Today, that same budget can be used to buy programmatic audiences, connected TV inventory, or digital screens in supermarket aisles, all optimised using shopper data and consumer preferences.
2. How spend is allocated matters more. Retail media started at the bottom of the funnel, close to the basket. Now around two in five agency buyers treat it as full funnel awareness, consideration as well as conversion through a handful of mature networks. It is still uneven by market with many brands leveraging it for different reasons; conversion and brand. Some don’t even have a choice with mandated spend through traditional trade partners.
3. Inventory has both proliferated and scaled: Retailers used to sell physical space, a spot on the shelf or a slot in a leaflet. The same retailer can now offer search and display on its own site and app, use its first-party data to reach audiences across social platforms and the open web through programmatic. Most retail media is bought programmatically, often through a DSP rather than direct, with the retailer’s own platform. Shelf, car park and on-site feed are all becoming media, connected by the same first-party data. Like all other media channels, this needs planning, audience segmentation, data activation and measurement.
4. The retailer is now a media owner: With retail and shopper combining, retailers have to navigate many more marketing stakeholders to enable omni-commerce activation. The retailer has become a media owner, and the advertiser has not always restructured around it.
5. The disconnect between brand and trade marketing is reinforced at the contracting stage. Trade and retail media are best contracted separately (a JBP for trade and a JMP for media to keep them commercially independent and stop media investment being tied to trade terms) but they should be planned and activated together. When they are not, expectations, deliverables and commitments split across two conversations and two sets of people, and things fall through the gap.
6. Advertisers are asking more of retailers: Investment in retail media is at a point where questions are rightfully being asked. Media teams want better data quality and data access, sharper audiences, real incrementality rather than last click, transparency on media quality and wastage, and agentic capability. They also want access via a self-serve platform rather than pay for managed service only.
7. The RMN partner ecosystem is growing: There are more than 250 retail media networks (RMNs) operating globally. No advertiser can work with all of them and consolidation looks inevitable. Most advertisers concentrate on a handful of RMNs and prioritize the few that matter most. Our retail media study with ISBA put it plainly: RMNs should be negotiated and valued like any premium media owner, on scale, value, services and maturity. Agencies matter here too. Most retail media advertisers are in the fast-moving consumer goods category. They rely on retailer first-party data and want to own the relationship through direct deals and JBPs. But with so many networks, aggregators and DSPs, and different tactics across the funnel, they cannot manage all that activation internally.

Retail media’s evolution is no longer just changing where brands invest. It’s forcing organisations to rethink ownership, budgeting and decision-making structures to keep pace. In Part 2, we’ll explore how leading advertisers are adapting their operating models to meet that challenge.

Read more about our study of Retail Media Networks here.

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By Leo Oliveira, Client Director, Strategy