As 2024 comes to a close, the retail media landscape has solidified its position as a critical pillar in modern advertising. Retail Media Networks (RMNs) have experienced rapid growth, technological advancement, and increased competition. This year-end review examines the state of the industry, highlighting successes, challenges, and what lies ahead in 2025.
Market Growth Analysis
2024 has been a landmark year for RMNs; In the United States, digital retail media advertising spending surged from $46.4 billion in 2023 to $59.6 billion in 2024. This growth underscores the continued confidence brands place in retail media to deliver targeted, high-performing campaigns. This exponential increase highlights the shift in advertising priorities, with brands focusing more on customer data and personalized strategies.
The market has become increasingly crowded, with over 80 RMNs now operational in the U.S. alone. Emerging networks from mid-size retailers have begun carving out niches by offering specialized features tailored to specific audiences. This influx of new players has driven competition and innovation, with companies offering unique features and platforms to differentiate themselves in the market.
Technology Advancements
Retail giants like Walmart have made significant strides in improving their retail media platforms. Walmart reported a 30% growth in U.S. advertising revenue, reflecting enhancements in targeting precision, analytics, and ad placement capabilities. Amazon also expanded its Sponsored Display ads, allowing advertisers to access off-site inventory, further bridging the gap between retail and digital marketing.
New tools and features were rolled out across retail media platforms in 2024, including advanced measurement systems and features like Poshmark’s “Promoted Closet,” which increased seller sales by 43% during testing. The rise of AI-driven solutions has been another key trend, with machine learning tools enabling brands to optimize campaigns in real-time, reducing inefficiencies and improving ROI.
Integration between retail media platforms and other marketing ecosystems saw substantial improvements in 2024. Cross-channel campaigns have become more seamless, enabling advertisers to leverage broader data sets for targeting and performance analysis. This technological evolution has been described as a "Cambrian Explosion" in retail media by industry experts. Additionally, platforms have invested in APIs that allow smoother integrations with CRM systems and data warehouses, making data activation more practical.
Challenges Faced By The Industry
Compliance with evolving privacy laws like GDPR and California’s CCPA has been a significant challenge. RMNs were forced to innovate while ensuring that their advertising practices remained transparent and consumer-focused. The introduction of stricter third-party cookie restrictions in browsers further complicated targeting efforts, pushing networks to double down on first-party data solutions.
Despite advancements, challenges persist. Scaling in-store retail media remains difficult, with in-store retail media accounting for only 0.7% of U.S. omnichannel retail media spending. Addressing these limitations will be crucial for future growth. Another ongoing hurdle is the lack of standardized performance metrics across platforms, which complicates ROI measurement for advertisers.
Success Stories
Several standout campaigns have demonstrated the potential of retail media in 2024. For example, Unilever’s innovative use of data-driven targeting on retail platforms delivered exceptional engagement rates, setting new benchmarks for the industry. Similarly, Procter & Gamble leveraged real-time audience insights to boost conversion rates on Walmart’s platform by 25%.
Walmart’s expansion into physical in-store advertising alongside digital media showcased how combining offline and online strategies can amplify results. Kroger integrated its loyalty data with advertising solutions, enabling hyper-localized campaigns that drove double-digit sales growth for participating brands.
RMNs consistently reported profit margins between 40% and 70%, far outpacing traditional retail margins of 3% to 4%. This underscores the value retail media delivers to advertisers and retailers alike. Brands that adopted dynamic bidding strategies saw even higher returns, highlighting the importance of adopting advanced tools and tactics.
Lessons Learned
Key practices that emerged in 2024 include:
- Leveraging first-party data to improve targeting.
- Investing in advanced analytics for campaign optimization.
- Prioritizing omnichannel strategies to enhance customer engagement.
- Integrating offline and online advertising to create cohesive brand experiences.
Some frequent missteps in 2024 included over-reliance on single retail media platforms and insufficient measurement of campaign effectiveness. Another common issue was poor alignment between creative assets and platform-specific requirements, which often led to underperformance. Addressing these issues can help advertisers avoid costly mistakes.
Brands have adapted by forming cross-functional teams and adopting agile methodologies to respond quickly to market changes. Predictive analytics has also become a cornerstone of forward-thinking strategies. Companies that invested in cross-training marketing and analytics teams saw improved campaign performance, as these teams were better equipped to work collaboratively.
Preparing for 2025
To prepare for the evolving retail media landscape, brands should:
- Invest in AI-driven tools to enhance targeting precision and campaign scalability.
- Stay ahead of privacy regulation changes by implementing robust compliance frameworks.
- Explore emerging advertising formats, such as shoppable video and voice-activated commerce.
Allocating resources to train teams on emerging tools and technologies will be crucial. Building cross-functional teams that bridge marketing, data science, and technology will ensure campaigns remain competitive. Additionally, brands should allocate budgets to test and iterate on emerging platforms to stay ahead of the curve.
Developing flexible marketing strategies that adapt to consumer behavior and technological advancements will set brands apart in 2025. Brands must also prioritize sustainability in their advertising strategies, as consumers increasingly favor companies that demonstrate environmental and social responsibility.
2024 was a transformative year for RMNs, defined by growth, innovation, and challenges. As we look toward 2025, brands must stay agile, invest in technology, and prioritize consumer trust to thrive in an increasingly competitive landscape. By embracing lessons from 2024, the retail media industry is poised for even greater success in the years to come.
Interested in learning more about how to optimize your retail media strategy for 2025? Visit trycarter.com to schedule a chat with one of our industry experts.
