Retail media advertising in the United States grew by 17.9 percent in 2025, nearly double the growth rate of the broader digital advertising market. This acceleration reflects a fundamental change in how brands allocate marketing budgets, with retail media networks now commanding an outsized share of new advertising dollars flowing into the digital ecosystem.
The rapid expansion of retail media has caught the attention of chief marketing officers across every consumer-facing industry. Brands that once distributed advertising spend across search, social and display channels are now redirecting significant portions of their budgets toward retail media platforms operated by Amazon, Walmart, Target and other major retailers. The logic is straightforward: advertising closer to the point of purchase delivers stronger conversion rates and more measurable return on investment than most other digital channels.
eMarketer estimates that US retail media spending reached approximately 69 billion dollars in 2025, up from 58.5 billion dollars the previous year. This figure includes both on-site advertising within retailer platforms and off-site advertising powered by retailer first-party data. The combined total represents roughly 19 percent of all digital advertising expenditure in the country, a share that has grown steadily from just 12 percent three years earlier.
The economics driving retail media’s outperformance
Several structural factors explain why retail media consistently grows faster than the broader advertising market. First-party data advantages give retail media networks a significant edge in an era of increasing privacy regulation and cookie deprecation. Retailers possess direct purchase data from hundreds of millions of consumers, enabling precise targeting that does not rely on third-party tracking technologies.
The closed-loop measurement capability of retail media is another powerful draw for advertisers. When a brand runs a campaign on Amazon Advertising or Walmart Connect, it can directly attribute sales to specific ad impressions without the attribution gaps that plague open-web advertising. This transparency makes it easier for marketing teams to justify retail media budgets to finance departments that demand clear evidence of advertising effectiveness.
Margin dynamics also favor continued retail media expansion. For retailers, advertising revenue flows almost entirely to the bottom line as high-margin income. Amazon’s advertising division generated an estimated 56 billion dollars in revenue during 2025, with operating margins that far exceed its retail operations. Walmart Connect, Instacart Ads and Kroger Precision Marketing have all reported similar margin profiles, creating powerful incentives for retailers to invest in expanding their advertising capabilities.
The self-reinforcing nature of retail media ecosystems accelerates growth further. As more advertisers participate, platforms generate more data, which improves targeting, which attracts more advertisers. This flywheel effect means that established retail media networks tend to grow faster than newer entrants, concentrating spending among the largest platforms while still leaving room for mid-tier retailers to build meaningful advertising businesses.
Market data and growth trajectories
Retail media’s 17.9 percent growth rate in 2025 compared favorably against the broader digital advertising market’s 10.2 percent expansion during the same period. Looking at historical trends, retail media has outpaced overall digital advertising growth every year since 2019, with the gap widening in recent years as privacy changes diminished the effectiveness of cookie-based targeting on the open web.
Forecasts from eMarketer, GroupM and WARC project that retail media will maintain growth rates between 15 and 20 percent annually through 2028. eMarketer estimates that US retail media spending will reach 106 billion dollars by 2028, representing approximately 24 percent of total digital advertising expenditure. GroupM‘s projections are slightly more conservative but still anticipate retail media surpassing traditional television advertising revenue by 2027.
The category breakdown of retail media spending reveals interesting patterns. Consumer packaged goods brands account for the largest share at roughly 35 percent, followed by electronics and technology at 18 percent, apparel and fashion at 14 percent, and health and beauty at 12 percent. However, categories like financial services, automotive and travel are growing their retail media investments at even faster rates, suggesting that the advertiser base is broadening beyond traditional retail-adjacent industries.
Geographic distribution of retail media spending within the United States shows concentration in markets with high e-commerce penetration. Metropolitan areas along the coasts account for disproportionate shares of retail media impressions, though suburban and rural markets are growing faster as delivery infrastructure expands and more consumers adopt online shopping for everyday purchases.
Who is winning the retail media race
Amazon maintains a dominant position in US retail media, capturing an estimated 73 percent of all retail media spending in 2025. The company’s advertising business has become its fastest-growing major revenue segment, with quarterly advertising revenue exceeding 14 billion dollars. Amazon’s advantage stems from its massive first-party dataset covering purchasing behavior across virtually every consumer category, combined with sophisticated machine learning systems that optimize ad placement in real time.
Walmart Connect has emerged as the clear second-place platform, with an estimated 4.5 billion dollars in annual advertising revenue. Walmart’s advantage lies in its unmatched physical store footprint, which enables omnichannel advertising campaigns that connect digital impressions to in-store purchases. The company has invested heavily in building self-service advertising tools that allow smaller brands to participate without requiring dedicated agency support.
Instacart, Kroger, Target and other retailers have collectively built advertising businesses generating billions in annual revenue. Instacart’s advantage in grocery advertising has proven particularly durable, as the platform captures purchase intent data at the category level with remarkable precision. Kroger Precision Marketing leverages loyalty card data from over 60 million households to offer targeting capabilities that rival those of much larger platforms.
The emergence of retail media networks operated by non-traditional retailers represents a notable trend. Companies like Uber, Lyft, Marriott and Chase have launched advertising platforms that leverage their first-party data assets. While these networks remain small relative to Amazon and Walmart, their rapid growth suggests that the definition of retail media is expanding beyond traditional e-commerce and brick-and-mortar retail environments.
What this means for the digital advertising ecosystem
Retail media’s sustained outperformance is reshaping the competitive dynamics of the entire digital advertising industry. Traditional digital advertising platforms, including Google and Meta, face increasing competition for brand advertising budgets that might previously have been allocated to search and social campaigns. While these platforms remain dominant in overall digital advertising, their share of incremental spending growth has declined as retail media captures a larger portion of new budget allocations.
For advertising agencies, the rise of retail media has created both challenges and opportunities. Agencies that have built specialized retail media practices are experiencing rapid growth, while those slow to develop retail media capabilities are losing client mandates. The technical complexity of managing campaigns across dozens of retail media platforms simultaneously has created demand for retail media management platforms and specialized analytics tools.
The implications for publishers and content-driven media companies are less favorable. Every advertising dollar redirected to retail media represents potential revenue lost from open-web display advertising, sponsored content and other publisher-dependent formats. Some publishers have responded by developing their own commerce-enabled advertising products, but few possess the first-party purchase data that makes retail media so attractive to advertisers.
Looking ahead, the continued growth of retail media will likely drive further consolidation in the digital advertising industry. Smaller ad tech companies that cannot offer the closed-loop measurement capabilities of retail media networks may struggle to compete for advertiser budgets. Conversely, technology companies that help brands manage retail media campaigns at scale across multiple platforms are positioned for significant growth as the market continues its rapid expansion through the end of the decade.
