How a retail media network works
An RMN turns a retailer's store traffic and sales data into sellable ad inventory. The mechanism starts with first-party shopper data: purchases, loyalty activity, and browsing behavior the retailer collects directly. Because shoppers share this data inside a logged-in, transactional environment, it is accurate and durable in a post-cookie world.
The retailer activates that data across two kinds of inventory. Onsite placements run on the retailer's own site and app: sponsored search results, homepage banners, and ads on product detail pages. Offsite placements extend the same audience onto the open web, social, and connected TV through media partnerships.
Brands buy through a self-serve ad console or a managed agency relationship, setting targets, budgets, and bids. The network serves ads at or near the moment of purchase, the closest position to a transaction in all of digital advertising. Because the retailer monetizes assets it already owns, RMNs carry strong margins.
The main types of retail media ads
Most retail media networks sell three core ad formats, each mapped to a different stage of the buying journey:
- Sponsored products: native, cost-per-click ads that appear inline with search results, marked "Sponsored". They are lower-funnel, built to drive conversions where shoppers are already searching to buy.
- Onsite display: banner and rich-media placements on the retailer's homepage and product detail pages. These sit mid-funnel, building consideration while a shopper browses.
- Offsite display and CTV: display, video, and connected-TV ads served across the open web, social, and streaming using the retailer's audience data. These run upper-funnel for reach and retargeting.
Larger networks add sponsored brands, audio, and in-store screens, but these three formats anchor nearly every RMN media plan.
Onsite vs offsite retail media
Onsite inventory captures high-intent shoppers already inside the retailer's environment, where purchase signals are strongest. Offsite inventory takes that same first-party audience data and extends it across publisher sites, social, and CTV for reach and retargeting. Most full-funnel campaigns combine both. The sibling page onsite vs offsite advertising carries the full comparison.
Example: Walmart Connect vs Amazon Ads
The two largest US retail media networks show how different a retailer's media business can look.
Amazon Ads is a marketplace-led RMN. It pioneered sponsored products and ranks #1 by US retail-media ad revenue, with roughly 75% share as of 2024. Its scale comes from shopping searches that happen directly on Amazon, where a sponsored result sits one click from checkout. See Amazon RMN.
Walmart Connect is a big-box, omnichannel RMN and the #2 player. It blends onsite search and display with offsite placements on partners like TikTok, Snap, and Roku, plus in-store screens. That mix reaches the same Walmart shopper online, on social, and in the aisle. See Walmart RMN products.
Both run on the same logic (first-party data plus owned inventory), but one is built around a search-driven marketplace and the other around an omnichannel retail footprint.
How RMNs are measured
RMNs are measured through closed-loop attribution: the network matches ad exposure to actual purchases using the retailer's own first-party sales data, often down to the SKU. The headline metric is ROAS (return on ad spend), alongside conversion rate and cost per click. Because each retailer measures inside its own walls, cross-retailer attribution stays fragmented without a unifying layer. The sibling page closed-loop attribution covers the mechanism in depth.
Why it matters for brands and sellers
Retail media networks sit closest to the transaction, so they produce the cleanest signal connecting ad spend to sales. Their first-party data also holds its value as third-party cookies disappear, making RMN budgets more defensible than open-web display. The value lands differently by role: for brands an RMN is a lower-funnel channel built on closed-loop ROAS, while for sellers it is a defensive cost to protect shelf visibility against rivals. The retailer margin that funds these networks is covered in retail media monetization.
The hard part is fragmentation. Every retailer is a separate walled garden, so running Amazon, Walmart, Instacart, and Kroger spend means juggling four consoles, four data models, and four attribution methods. Sellers that compare networks before committing budget get more from their spend. Use the networks hub, the retail media database, and resources for sellers to plan across platforms.
Related terms
Frequently asked questions
What is a retail media network in simple terms?
A retail media network is the ad business a retailer builds on top of its store. The retailer sells ad space across its site, app, and partner channels, using what it knows about its shoppers to target those ads. Brands pay to reach buyers right where they shop.
What's the difference between a retail media network and a DSP?
A retail media network is owned by a retailer and sells access to that retailer's shoppers and inventory using first-party purchase data. A demand-side platform (DSP) is buyer-side software for purchasing ads across many publishers programmatically. RMNs sometimes use DSPs to deliver their offsite inventory.
Which retailers have the biggest retail media networks?
In the US, Amazon Ads is the largest retail media network, holding roughly 75% of retail-media ad revenue in 2024, followed by Walmart Connect. Other major networks include Target's Roundel, Kroger Precision Marketing, and Instacart Ads. Each runs on its own first-party shopper data.
How do brands buy on a retail media network?
Brands buy through the retailer's self-serve ad console or a managed agency relationship. They choose formats such as sponsored products or display, set targeting, budgets, and bids, then launch. The network serves the ads to its shoppers and reports performance through closed-loop sales data.
