Here's a number that should make every brand marketer nervous: retail media networks are projected to capture over $50 billion in US ad spend this year. That's not a typo. Fifty billion dollars flowing from brands to retailers for the privilege of advertising on the same platforms where they sell their products.
Here's a number that should make every brand marketer nervous: retail media networks are projected to capture over $50 billion in US ad spend this year.
Target's Roundel. Walmart Connect. Amazon Ads. Kroger Precision Marketing. Instacart Ads. Every retailer with a website and a pulse has launched a media network, and they're all growing double digits.
From the retailer's perspective, this is genius. Pure margin. Near-zero inventory risk. First-party data that doesn't rely on cookies. I get it. I respect it.
From the brand's perspective, this is a protection racket wearing a media plan costume.
Let me be specific about what's happening. Brands are now paying retailers to be visible on the retailer's own shelf. That's the equivalent of paying the grocery store to not put you on the bottom shelf in the back corner. It's not advertising in any traditional sense. It's a visibility tax.
The insidious part is that it works. If you're a CPG brand and your competitor is buying sponsored product placements on Amazon, and you're not, you will lose share. Not because your product is worse, but because you're invisible in the moment of purchase. So you buy in. And then your competitor increases their spend. And you increase yours. And the retailer profits from the escalation.
This is an arms race, and the only winner is the arms dealer.
Here's what concerns me strategically: retail media spend is cannibalizing brand-building budgets. Every dollar that goes to Amazon Sponsored Products is a dollar that doesn't go to building distinctive brand assets, creating emotional connections, or generating long-term demand. It's performance marketing at its most extractive: you're buying sales you would have gotten anyway if your brand were stronger.
I've talked to CPG marketers who are now spending 30-40% of their digital budget on retail media. That's not a media mix. That's a hostage situation.
The solution isn't to stop spending on retail media. If you're in CPG, you don't have that option. The prisoners' dilemma is already in motion. The solution is to be honest about what retail media is and what it isn't.
It is: A cost of doing business. A distribution fee. A necessary evil for purchase-point visibility.
It is not: Brand building. Demand creation. A substitute for the upper-funnel work that creates customers who search for you by name instead of by category.
The brands that will survive the retail media era are the ones that maintain their brand-building investment in parallel. The ones that ensure customers walk into the digital shelf already knowing what they want, so the sponsored placement is just a convenience rather than a discovery.
Brands with strong mental availability don't need to buy their way onto the shelf. They've already bought their way into the shopper's mind. And that space doesn't charge CPMs.
Yet.