Nearly two-thirds of marketers increased their investments in retail media in 2024, even with lackluster performance and measurement concerns, according to a report from Forrester. With the vast majority of retail media networks launching in the past five years, the space has become crowded with competition. Additionally, the retail media ecosystem has largely failed to deliver on promises surrounding data usability, leaving many marketers frustrated. 

“There's a divergence between retail media, sponsored content and its reality,” said Nikhil Lai, senior analyst at Forrester. “There's a gap, and to close the gap retail networks have to act more like media publishers than retailers.”

“The State of Retail Media, 2025” evaluates previous reports and incorporates supplemental information from numerous organizations to predict how the retail media industry will look in 2025. Additionally, Forrester looked at Google trends, SEC filings and other data to update the report for 2025. 

It’s Amazon’s ocean

Amazon Ads’ business is so large that the actual size and growth of the retail media market has been misconstrued. The e-commerce giant’s media network is estimated to be larger than all other U.S.-based networks combined, and removing it from the equation dramatically reduces the size of the overall retail media market, according to Forrester. 

In 2023, Amazon Ads saw a 24% year-over-year growth in business, hitting $47 billion. Walmart was a distant second, only capturing $3.4 billion. This reflects 28% YoY growth for the big box retailer, and includes trade funding, which often shrinks as retail media network spend grows. 

Not only is Amazon the largest retail media network in the U.S., it also has significant technological and data advantages. The e-commerce giant holds the rights to many popular entertainment franchises, such as James Bond and the television rights to Lord of The Rings, allowing for premium advertising placement. It’s a value proposition not many organizations can compete with. Additionally, Amazon Marketplace allows third-parties to sell products, allowing for a vast array of products and demographics and a built-in ad revenue segment. 

“They have a huge marketplace of third party sellers who dedicate all their ad spend to the marketplace that they sell on. So Amazon is unique in so many ways, and it's misleading for other retailers to think that they can unlock the kind of high market income Amazon does,” said Lai. “That's where the distortion comes from.”

While the problems facing the broader retail media network segment run far deeper than Amazon, the e-commerce giant is certainly exacerbating them. For example, Amazon offers marketers an easy-to-use platform with tools similar to Google Ads, which many in the industry are already familiar with. However, the majority of other retail media networks remain manual. This, combined with the lower impressions delivered by these other networks, often doesn’t make the effort worth it for advertisers. Additionally, in-store measurements are treated like an afterthought for many retail media networks, according to the report. Some retailers who have invested in smart-shopping tools such as digital displays haven’t rolled them out nationally due to concerns surrounding return-on-investment. 

Changing perspectives

If retail media networks want to be successful, they need to stop thinking like retailers and more like publishers, according to the report. Granting marketers more flexibility, increasing automation and industry standardization are crucial if networks want to continue on a growth trajectory. 

While access to first-party data is one of the things which has made retail media networks appealing, as the space continues to grow, data alone isn’t going to be enough for marketers. If retailers want their networks to remain appealing, they need to do more to set themselves apart from the crowd. Ease of use, increased on-site advertisements and automation are the keys to capturing industry attention, according to the report.

“There's a couple hundred retail marketing networks out there. And you may have good data, but your data may be duplicative to what someone else has…so data is insufficient,” said Lai.