Retail Media vs. Social & Search: The Shift That’s Changing Digital Ads

Now retail media represents the next major evolution, capturing ad spend at the point of purchase. Retail media is rapidly becoming the dominant force in digital advertising, reshaping how brands allocate their ad budgets.

This shift is driven by the ability of retailers to leverage first-party data, offering brands precise targeting and measurable returns. The retail media market has expanded from a handful of networks (Amazon, Walmart Connect, Target Roundel) to over 200 globally, with a total market size of $60B in 2024 and anticipated to reach about $72 billion in 2025 and to exceed $100 billion by 2027.

Retail media’s projected growth outpaces all other digital ad formats. U.S. retail media spending is expected to reach $60 billion in 2025, and globally, the market could surpass $140 billion. McKinsey predicts that by 2027, retail media will exceed $160 billion, making it one of the largest ad channels.

Several factors contribute to this dominance:

• Retailers as Media Owners: Retailers such as Walmart, Target, and Kroger are building their own media networks, transforming into media powerhouses that directly compete with traditional digital ad platforms.
• Privacy-First Advertising: With stricter privacy regulations limiting third-party data, brands are shifting toward first-party data solutions like RMNs, which provide a compliant way to target audiences.
• Integration with e-commerce: Unlike social media ads, which require users to leave the platform to make a purchase, retail media integrates ads directly within the shopping experience, minimizing friction and increasing conversion rates.

Brands are rapidly shifting ad budgets to retail media, drawn by its superior targeting, measurement, and ability to reach high-intent shoppers across multiple channels. Here are three key reasons why retail media is reshaping digital advertising and outpacing traditional channels.

1. A Shift in Budget Allocation: Retail media networks (RMNs) are attracting budget reallocations from both traditional media and digital channels. Up to 70% of retail media spend is being diverted from other advertising budgets, including social media and search. In the U.S., brands now allocate 25% of their paid social and search budgets to retail media.Retail media’s ability to deliver closed-loop attribution (tracking from ad exposure to purchase) is a major reason why brands are moving ad dollars away from search and social platforms that struggle with precise measurement.
2. Targeting and Attribution Advantage: Unlike traditional digital ads, which rely on third-party cookies, retail media networks operate within a retailer’s ecosystem. This allows brands to target high-intent shoppers using first-party transactional data. For example, Walmart Connect and Target Roundel enable brands to reach consumers who have previously engaged with similar products, increasing conversion rates. Social media platforms primarily rely on behavioral data, whereas retail media leverages purchase intent, making it a more effective channel for direct-response advertising.
3. The Expansion of Off-Site Retail Media: Initially focused on on-site placements (e.g., Amazon Sponsored Products), retail media is now expanding into off-site advertising, where retailers use their first-party data to serve ads on third-party sites. This trend enables brands to extend their campaigns beyond retail platforms while maintaining the benefits of precision targeting. Brands are increasingly using RMNs to advertise across various channels, including in-store digital screens, connected TV (CTV), and digital out-of-home (DOOH) advertising.

The rise of retail media is fundamentally altering the digital advertising landscape, taking ad dollars away from social media and paid search platforms. While platforms like Meta, Google, and TikTok have traditionally dominated digital advertising budgets, the limitations of these platforms are pushing brands to explore alternative channels. Retail media provides a solution by offering:

• Hyper-targeted advertising based on first-party data, ensuring ads are served to high-intent consumers.
• Closed-loop measurement, allowing brands to directly correlate ad spend with conversions.
• Lower reliance on traditional social media algorithms, reducing unpredictability in ad performance.

As a result, a growing number of brands are reallocating budgets from Meta and Google to RMNs. GroupM predicts that retail media will surpass TV advertising in global ad spend by 2028, underscoring its disruptive potential.

As retail media continues to evolve, myAthena is pioneering the next phase of this transformation. It is an AI-powered retail media studio that enables brands and retailers to create engaging, shoppable video ads. This innovation addresses a key industry shift: the move from static banner ads to interactive, video-driven content. The key features include: 

• AI-Generated Shoppable Videos: MyAthena leverages AI to create dynamic, TikTok-style shoppable ads that seamlessly integrate with retailer websites.
• Retailer & Brand Alignment: Ensures ad content aligns with both retailer requirements and brand storytelling, optimizing engagement and conversion.
• Scalable Content Creation: Unlike traditional ad formats, which require extensive production timelines, MyAthena allows for rapid, high-quality content generation.

By bringing the engagement level of a TikTok or Instagram Reels feed to retail media, myAthena empowers brands to monetize their retail channels while reducing dependence on volatile social media platforms. In an era where digital advertising is rapidly evolving, retail media is no longer an alternative – it’s the future.