• by Maarten Albarda , Featured Contributor, Yesterday

Retail media networks (RMNs) will continue to grow their share of ad spending at an impressive rate. In 2023, reported U.S. ad spend on RMNs was $46.4 billion. For 2025, the forecast is $72 billion. Next year, it will likely surpass $100 billion.

At the same time, RMNs, sadly, are walled gardens: They give advertisers access to their valuable first-party data and sales information, but keep that data locked within their own ecosystem. This creates several problems.

For example, because of their limited access to data on RMNs, brands can't export a retailer's first-party data to use for targeting campaigns on other platforms. This restricts their ability to create a consistent, multichannel strategy. The fact that each RMN has its own set of metrics and a unique dashboard for reporting makes it incredibly difficult for advertisers to compare campaign performance across different retailers (e.g., comparing the ROI of a campaign on Walmart Connect to one on Amazon Ads).

Luckily, services like DoubleVerify and IAS now offer at least some tracking on viewability and invalid traffic. However, both companies operate within the walled garden by using integrations to measure media quality, not audience data or sales. Their technology focuses on ad-level metrics, such as did the ad load, was it in a user's view for the required duration (viewability), and if the ad ran next to content that aligns with the brand's values (brand suitability).

These are important metrics for sure, and having them is better than not having them. But they don’t help that much when you’re deciding if your next $100,000 is better off on Target’s network or Instacart’s network.

There has also been a long-standing argument that advertising on these networks makes the most sense for marketers that want to influence a decision when the consumer is about to make an online purchase -- kind of like the digital alternative to media in the store aisle or on-shelf.

But now RMNs are actively expanding to a wide array of formats better suited for brand advertising. They offer on-site video ads, placed on homepages or category pages, or off-site video and display ads, using the retailer's data to target shoppers on platforms like connected TV and social media. They also now include interactive experiences and branded content, allowing for a richer, more engaging brand narrative.

Of course, the best approach is to use retail media to connect brand building to sales efforts. A brand could run a video ad on Amazon's Prime Video to build awareness, then retarget that same audience with a sponsored product ad on the Amazon marketplace to drive a sale. This creates an integrated and measurable journey from awareness to purchase -- all within the Amazon walled garden.

So yes, RMNs are evolving and expanding, and it’s starting to make more sense to include them in all types of messaging, not just direct-response. But as siloed entities, their metrics are seriously deficient, which severely limits any ROI analysis.