Retail media networks are accelerating digital ad spend growth with $130B projection by 2028, leveraging first-party data and AI personalization to outpace social platforms.
Retail media advertising is poised to eclipse social media marketing budgets by 2028, according to eMarketer’s Q2 2025 forecast released April 28. The projection comes as CPG brands now allocate 40% of digital budgets to commerce platforms with closed-loop measurement systems, per analyst Andrew Lipsman’s Retail Media Outlook analysis.
Commerce Platforms Become Ad Powerhouses
Amazon Ads reported $10.7B in Q2 2023 revenue during its July 27 earnings call, doubling its 2021 performance through sponsored product ads. Walmart Connect expanded its reach through July partnerships with The Trade Desk and social platforms, while TikTok introduced shoppable ads for SMBs on July 24.
Data Wars Reshape Advertising Ecosystems
Google’s July 19 integration of Walmart product feeds into Performance Max campaigns highlights the blurring lines between search and retail media. GroupM data shows retail media’s global digital ad share jumped from 12% to 18% between 2022-2023, with P&G reportedly shifting half its digital budget to retail networks.
Regulatory Pressures Accelerate Shift
Compliance costs from the EU Digital Markets Act are pushing brands toward retailer-owned platforms, according to a July 25 Digiday report. This exodus coincides with Walmart Connect’s programmatic inventory expansion through The Trade Desk partnership announced July 20.
The current retail media surge mirrors the 2010s transformation when Alipay and WeChat Pay revolutionized Chinese mobile payments. Like those systems, today’s commerce platforms combine transaction data with AI optimization – Alibaba’s Tmall reported 35% conversion rate improvements using similar technology in 2022.
Historical patterns suggest consolidation phases follow rapid sector growth. When social commerce emerged in 2018-2020, Meta’s Shops feature gained 1M business users within 18 months before plateauing. Whether retail media networks can sustain their 20%+ annual growth beyond 2026 remains uncertain, given potential market saturation and regulatory scrutiny.
