Editorial
The Gist
-
Retail media growth. Retail media has grown into a $128 billion industry, expected to surpass TV advertising.
-
Customer experience impact. Irrelevant ads clutter ecommerce pages, which decreases customer trust and increases cart abandonment. Personalization and less intrusive ad placements are key to improving the shopper experience.
-
Long-term strategy. Retailers should treat sponsored placements as experiments and align organic and paid results to enhance both revenue and customer loyalty.
There is no mistaking the growth of retail media’s popularity with advertisers, which has ballooned into a more than $128 billion global category. It’s projected to surpass TV spending within a few years.
Yet, despite the growth, consumers are not quite as enamored with retail media. A recent Rokt and Harris Poll study found that nearly 30% of customers abandoned their carts when bombarded with irrelevant offers and ads that filled the retail media space without any connection to the individual or their purchase intent.
While a tactic of simply stuffing their inventory may bring retailers some short-term gains, it’s not a long-term solution. How can retailers create a win-win situation and maximize their retail media inventory while also creating a better shopper experience and greater brand trust?
Let’s explore.
Table of Contents
- Challenges With Retail Media Networks
- Optimizing Your Retail Media Network
- Navigating the Evolving Retail Media Landscape
Challenges With Retail Media Networks
Retail media is growing quickly, which could be a benefit to both retailers and customers. But there are still several challenges to overcome.
| Challenge | Description |
|---|---|
| Inventory-Stuffing at Customers’ Expense | With every slot on an ecommerce category page viewed as billable real estate, sponsored tiles with products and offers that may not be relevant can push organic content further down on the page. This degrades the customer experience and ultimately causes consumers to feel that the retailer doesn’t “get” them, which reduces brand trust. It also increases the likelihood that they abandon their cart altogether and make their purchase somewhere else. |
| Lack of Personalization | First-party insight is often a selling point of retail media, yet many programs don’t truly benefit from an ability to personalize results. This is often structural, with ad-serving stacks that don’t share signals with search, recommendation or loyalty engines. Yet, regardless of the reasons why, consumers are still being inundated with ads that aren’t personalized to their interests or search behavior. Every mismatch trains users to scroll faster, click less and trust that retailer a little less next time. |
| Short‑Term Improvements With Long‑Term Costs | Retail media networks can provide retailers with a lucrative revenue stream, yet optimizing click-through rates and cost-per-click can provide short term financial gains with long-term costs like reduced customer satisfaction and loss of brand trust. Retailers have generally not been in the media space until recently, so it stands to reason that creating a retail media network takes some time and testing to understand what will provide the best mix of revenue and customer experience and loyalty. |
| Fragmentation & Measurement Chaos | With over 220 retail media networks worldwide and growing, fragmentation is increasing, which harms an advertiser’s ability to measure or benchmark their results. This fragmentation means that each network has their own taxonomy, attribution model and reporting cadence, which leaves brands to stitch together dashboards that struggle to tell the true story. This is time-consuming, and it dampens investment, as greater fragmentation makes it more difficult to truly understand performance. |
Related Article: Master Data Management Helps You Fight Data Fragmentation & Tap Into Data's Value
Optimizing Your Retail Media Network
Retailers that treat every sponsored placement as an experiment rather than a foregone conclusion tend to win on both revenue and reputation. The first step is a forensic audit of your own site that consists of cataloguing each page template and physically counting the paid tiles. In doing this, most teams discover that ad density has crept upward release by release. Once you know the baseline, impose hard caps that cannot be waived without a business‑case memo. Paradoxically, many retailers see conversion rise when the worst 20% of impressions are removed, because shoppers stop fleeing the clutter and start engaging with what remains.
Relevance and Measurement Matter More Than Raw Impressions
The second recommendation is technical. Insist that organic and sponsored results flow through the same relevance engine where possible. That may require re‑platforming, but a unified ranking layer, such as one in a platform like Constructor’s retail media offering, provides a way to understand whether a bid actually adds incremental margin or merely displaces an organic click. When merchandisers and media managers stare at the same decision score, the shouting matches stop and the revenue math speaks for itself.
With technology aligned, the methods of measurement can now be improved to better align with numbers that give a better view of long-term benefits. This means replacing campaign‑level return on ad spend (ROAS) with session‑level gross profit, repeat‑purchase rate and lifetime value. This keeps finance partners happy, and putting the right measurement controls in place can also reduce cannibalization.
None of this holds if teams remain siloed and only judge success by their own teams’ metrics. Forming a working group that includes media sales, customer experience design, merchandising and data science both prevents turf wars and puts both the brand and the customer first.
Related Article: Retail to the Rescue: The Customer Experience You Wish You Had
Navigating the Evolving Retail Media Landscape
With the continued growth of retail media networks, there’s even more on the horizon. Let’s look at a few trends to keep on your radar.
For one, secure data cleanrooms are moving from a buzzword to a baseline expectation. As privacy rules tighten, retailers and their brand partners are pooling purchase logs and media exposure in neutral, hashed environments that keep raw identities off‑limits. S
o far, these have offered a twofold benefit: richer cross-retailer audience insights for brands and higher-margin “premium” data products for the networks that host them.
AI, Data Cleanrooms and Industry Standards Reshape the Field
Second, AI‑assisted creative optimization is the next step towards a better consumer experience. Both generative and predictive AI are changing the way shoppers find products, with static banners for copy and imagery being rewritten in real time by AI to match intent. This ultimately improves click-to-cart rates and overall ROI, while also better matching customer expectations.
Finally, the industry is finally addressing its measurement headache, with the IAB/MRC Retail Media Measurement Guidelines available since 2023. This provides marketers a common yardstick for impressions, clicks and incremental sales. While standardization won’t solve every problem, it lets brands compare performance across 200‑plus retail media networks now in the market.
Webinar
Nov
6
Fix the Content Bottleneck: Build a Better WebOps Strategy
Content stalled? Dev overloaded? You’re not the only one. Learn how streamlined WebOps bridges the publishing gap.
Register
Webinar
Nov
13
Know Your Caller Reputation: How to Protect Your Brand and Get More Calls Answered
80% of unidentified calls go unanswered. See why your calls aren’t getting through.
Register
Webinar
Nov
20
How to Build a Solid Knowledge Foundation for AI Success
See how leading brands keep their AI honest, compliant and actually helpful.
Register
Webinar
On demand
Beyond Storage: Smarter Content, Bigger Impact with DAM + AI
Discover how the DAM + AI duo makes content smarter, stronger and more accessible.
Watch Now
Webinar
On demand
Agentic AI Playbook: Real-World Customer Service Use Cases You Can Deploy Now
Boost self-service by 30% and slash call volume by 63% with agentic AI.
Watch Now
Webinar
On demand
Call Spoofing Trends Financial Institutions Can't Afford to Ignore
Don't let robocalls sabotage your customer relationships. Learn how to secure your voice channel.
Watch Now
These developments point towards a future where retail media is less of a sideline and instead part of an integrated, full-funnel system. Preparing now will set retailers up for long-term success.
Retail media can be both a profit engine and a brand builder, but only if every impression respects the shopper. By treating sponsored placements as part of the customer experience, not merely paid inventory, marketers position themselves to capture today’s revenue while safeguarding tomorrow’s loyalty.
Learn how you can join our contributor community.
