What is retail media?

What is retail media?

Retail media is a category of digital advertising focused on the first-party consumer data owned by retailers (such as shopping habits and purchase history) rather than third-party cookies.

It covers both the on-site formats built directly into a retailer's own search results and pages, off-site campaigns that carry that same first-party data onto other publishers, CTV, and social, and in-store digital advertising enhancements. What ties the category together is the data source: the retailer, not the platform. Retail Media in Commerce Media Tech is focused on off-site.

The term gets used loosely across the industry, sometimes to mean just sponsored search ads, sometimes to mean a retailer's entire ad business. For clarity, we define retail media as the umbrella term for the category, and a retail media network (RMN) is the specific commercial vehicle a retailer builds to sell it.

How does retail media work?

A retailer collects first-party data (purchase history, on-site search behavior, loyalty activity) as shoppers browse and buy through its own site or app. It packages that data, together with its own ad inventory (search results, product pages, category pages, homepage placements), into a retail media platform.

Brands and agencies then buy that inventory, usually through a self-serve interface and sometimes through a managed service, to reach shoppers using targeting grounded in real transaction data rather than inferred interest.

What is a Retail Media Network (RMN)?

A Retail Media Network is the ad infrastructure a retailer builds (or licenses from a retail media platform provider) to sell its own inventory and data to advertisers.

Amazon's advertising business was the model most other retailers ended up copying; since then, most large retailers across grocery, home improvement, beauty, and electronics have stood up their own retail media network, either operating it in-house or through a specialist retail media technology partner.

Worth keeping distinct: retail media is the category, a retail media network is the specific commercial vehicle. The terms get used interchangeably in casual conversation, but "which RMN to choose" and "what is retail media" are different questions.

Retail media vs commerce media: what's the difference?

Retail media and commerce media get used interchangeably, but retail media is the narrower of the two. It refers specifically to advertising sold against a retailer's own first-party data — an e-commerce site, a marketplace, a grocery chain's app.

Commerce media is the broader category: any advertising built on transaction or intent data from a business that isn't primarily a media company. IAB draw this line by vertical — retail media networks span grocery, beauty, fashion, DIY, and home retail, while commerce media networks extend the same model to travel, mobility, payments, and food delivery.

On-site vs off-site retail media: where is the growth?

On-site retail media covers everything that happens inside a retailer's own environment: sponsored products in search results, sponsored display on category and product pages, and native placements built into the shopping experience itself. It's the model most people picture when they hear "retail media," and it's also the most mature.

Most retailers with meaningful traffic have already built the fundamentals — first-party targeting, self-serve buying tools, sales-linked measurement — which is a big part of why on-site inventory in categories like grocery and marketplaces is increasingly saturated.

Off-site retail media (also called audience extension) is where a retailer takes the same first-party data it built on-site and activates it somewhere else entirely. The retailer isn't selling its own page views anymore; it's selling the targeting precision of its purchase data, wherever the ad actually runs.

That's also where most of the category's growth is now concentrated: on-site formats are close to fully built out across major retailers, but off-site gives a retailer a way to keep growing its media business without needing more of its own inventory to sell.

Who owns the data in retail media?

The retailer does — and that's the whole point. Retail media works because a retailer sees the entire path from ad exposure to purchase inside its own environment: what a shopper searched for, what they clicked, what they actually bought, and whether they came back. That's a fundamentally different data position from the open web, where advertisers rely on third-party cookies, device signals, or modeled audiences that are getting less reliable every year.

A brand buying retail media isn't just buying placements, but the access to a retailer's closed loop of purchase-level data. That's also why retailers, rather than ad tech vendors, hold most of the leverage in how retail digital media gets packaged, priced, and governed.

What are the key retail media formats?

IAB retail media definitions group formats into three environments (on-site, off-site, and in-store), each tied to a different data reach and a different pricing model.

How do you measure retail media performance?

Retail media measurement leans on three pillars that a retailer's closed-loop data makes possible in a way open-web advertising generally can't:

Retail media networks: examples and landscape

Retail media networks now span most retail verticals, not just marketplaces. A non-exhaustive look at how the landscape breaks down:

Beyond the biggest and most frequently cited names, most mid-size and regional retailers extend their first-party data off-site rather than building a full on-site network from scratch — working with a specialist off-site retail media partner, like CMT, to activate that data on the open web, CTV, and social.

What's next for retail media?

Three shifts are shaping where retail media goes from here. First, on-site growth is flattening in mature categories, pushing retailers to look at off-site and in-store as the next source of incremental ad revenue. Second, measurement standards are consolidating: incrementality testing and closed-loop attribution are becoming baseline expectations rather than differentiators. Third, the retail media technology layer itself is maturing, as more retailers are choosing to license a retail media platform rather than build one, which is compressing the time it takes a mid-size retailer to launch a credible network.

None of that changes the underlying logic: retail media works because retailers own data that ad tech vendors and open-web publishers don't. Where that data gets activated — on-site, off-site, or in-store — is simply the next variable retailers are still working out.