Retail Media Networks Explained: Amazon, Walmart & Target Ads

Retail media networks have quietly become the third great wave of digital advertising — after search and social — and they are now reshaping how e-commerce brands allocate every marginal dollar. What began as sponsored product listings on Amazon has evolved into a full-funnel ecosystem where Walmart Connect, Roundel (Target), Instacart Ads, Kroger Precision Marketing, and dozens of other retailer-owned networks compete directly with Meta and Google for share of budget.

The scale is staggering. Retail media ad spend in the U.S. is projected to reach roughly $62 billion in 2024, up from $45 billion in 2023, and is forecast to exceed $100 billion globally by 2026 [eMarketer, 2024]. That growth rate — more than 20% year over year — makes retail media the fastest-growing major ad channel, outpacing both connected TV and traditional social [eMarketer, 2024]. If you sell physical products, ignoring retail media in 2025 is no longer a defensible strategy; the only real question is how much of your budget belongs there and how to structure it.

This guide breaks down what retail media networks (RMNs) actually are, how Amazon, Walmart, and Target compare, and — most importantly — how modern DTC and omnichannel brands should slot RMN spend into a coherent budget alongside Google, Meta, TikTok, email, and organic channels.

Key Takeaways

• Retail media is the fastest-growing ad channel, projected at $62B in U.S. spend in 2024 and $100B+ globally by 2026.
• Amazon, Walmart Connect, and Roundel dominate the U.S. landscape, each with distinct shopper bases, CPCs, and ad units.
• Closed-loop attribution is a double-edged sword — reported ROAS often overstates true incrementality by 40–70% on branded campaigns.
• Budget allocation depends on channel mix: Amazon-native sellers may put 55–65% into Amazon Ads, while omnichannel DTC brands allocate 15–20%.
• Incrementality testing and MMM should drive quarterly reallocation, not platform ROAS dashboards.
• Creative investment (8–12% of RMN media spend) is critical — Sponsored Brand video can drive 2x higher CTR than static units.

What Is a Retail Media Network, Really?

A retail media network is an advertising platform owned and operated by a retailer that lets brands buy ads placed against the retailer’s own first-party shopper data — both on and off the retailer’s properties. Unlike Google or Meta, RMNs offer deterministic, closed-loop attribution tied to actual purchases, making them uniquely valuable in a post-cookie world.

What are the three main ad formats in retail media?

• On-site ads: sponsored product listings, sponsored brand banners, and display units inside the retailer’s app and website.
• Off-site ads: programmatic display, video, and CTV ads served across the open web, YouTube, or streaming platforms — but targeted using the retailer’s logged-in shopper data.
• In-store media: digital screens, self-checkout ads, receipts, and audio placements inside physical stores (increasingly important at Walmart and Target).

What makes retail media structurally different from Google or Meta is closed-loop attribution. When Amazon shows an ad and a shopper buys the product 45 minutes later on Amazon, the platform can measure that with near-perfect fidelity — no cookies, no probabilistic modeling. That deterministic measurement is a major reason Boston Consulting Group estimates retail media margins for retailers run between 70% and 90%, compared to 20–30% for their core e-commerce operations [BCG via Digital Commerce 360, 2023].

Why did RMNs explode after iOS 14.5?

The 2021 App Tracking Transparency rollout created a measurement vacuum for Meta and other social platforms. Advertisers who had leaned heavily on Facebook prospecting suddenly needed channels with reliable attribution. Retail media — powered by logged-in purchase data — solved that problem overnight. According to Forrester, 74% of brands now say retail media is “critical” or “very important” to their overall marketing strategy, up from 47% in 2022 [Forrester Research, 2024].

How is retail media different from traditional trade marketing?

Trade marketing historically funded shelf placement, end-caps, and co-op advertising through the sales organization. Retail media is working media — measurable, biddable, and tied to auction dynamics — that increasingly draws from marketing budgets rather than trade. The blurring of these two funding pools is one of the biggest governance challenges facing CPG brands in 2025.

The Big Three: Amazon Ads, Walmart Connect, and Roundel

Amazon, Walmart Connect, and Roundel are the three largest U.S. retail media networks and collectively capture more than 80% of RMN ad spend. Each has a distinct shopper profile, cost structure, and set of ad units, so choosing where to invest depends on your category, price point, and distribution footprint.

What makes Amazon Ads the 800-pound gorilla?

Amazon Advertising generated approximately $47 billion in revenue in 2023 and is on pace to exceed $55 billion in 2024, making it the third-largest digital ad platform in the world behind Google and Meta [Statista, 2024]. Roughly 75% of that spend is concentrated in Sponsored Products, Sponsored Brands, and Sponsored Display — the on-site ad units that appear in search results and on product detail pages.

Key characteristics of Amazon Ads:

• Intent depth: 63% of U.S. product searches now begin on Amazon rather than Google [Jungle Scout via Digital Commerce 360, 2024]. That intent quality is unmatched.
• Auction dynamics: Sponsored Product CPCs have risen 15–25% year over year in most competitive categories, with average CPCs now between $1.20 and $2.50 depending on vertical [Semrush Blog, 2024].
• Full-funnel expansion: Amazon DSP, Prime Video ads, and Twitch inventory now let brands run upper-funnel campaigns using Amazon’s shopper graph even if they don’t sell on Amazon.

How does Walmart Connect compete with Amazon?

Walmart Connect grew ad revenue 28% year over year in 2023 to $3.4 billion, and posted 26% growth again in Q2 2024 [Walmart Investor Relations via Digital Commerce 360, 2024]. Walmart’s advantage is its combination of 240 million weekly shoppers across stores and Walmart.com plus the 2023 acquisition of Vizio, which unlocks a proprietary smart-TV inventory layer for CTV advertising.

Walmart Connect fits brands that:

• Sell physical retail SKUs and want to defend or grow shelf share.
• Want to reach lower- and middle-income households — Walmart over-indexes on households earning under $80K.
• Have grocery, household essentials, or family-oriented products.

CPCs on Walmart Sponsored Search tend to run 30–50% lower than Amazon for equivalent keywords, though search volume is a fraction of Amazon’s [Search Engine Journal, 2024]. That gap creates real efficiency opportunities for advertisers who diversify.

What is Roundel and who should use it?

Roundel, Target’s in-house media company, generates over $1.5 billion in annual ad revenue and emphasizes creative-rich, brand-safe placements aligned with Target’s design-forward positioning [Target Corporation via eMarketer, 2024]. Roundel’s Target Circle loyalty program provides deterministic identity across 100+ million members, which powers its off-site programmatic targeting.

Target shoppers skew higher income than Walmart shoppers (median household income ~$80K vs. ~$65K) and are 68% female, making Roundel especially valuable for beauty, apparel, home goods, and premium CPG brands [Numerator via eMarketer, 2024].

How RMNs Fit Into a Modern E-Commerce Budget

The most common mistake is treating retail media as a bolt-on to an existing budget rather than restructuring around it. Successful brands define the role each channel plays across the funnel, then set allocation percentages based on where revenue is actually generated and where incremental demand can be created.

What is the channel role matrix?

Before assigning percentages, define what job each channel does:

• Demand capture (bottom funnel): Google Shopping, Amazon Sponsored Products, Walmart Sponsored Search, branded search.
• Demand creation (top/mid funnel): Meta, TikTok, YouTube, Amazon DSP, Roundel display, CTV.
• Retention: Email, SMS, loyalty, subscription flows.
• Category defense: Sponsored Brand ads and share-of-voice plays on retailer .coms.

Retail media plays in both demand capture (on-site sponsored search) and demand creation (DSP, CTV, off-site). Failing to distinguish those roles is why many brands over-invest in Sponsored Products while starving upper-funnel work.

How should I benchmark budget allocations by brand type?

Based on aggregated data from agency reports and platform earnings, here are directional 2025 budget splits:

Amazon-native seller (70%+ of revenue from Amazon):

• Amazon Ads (Sponsored Products/Brands/Display): 55–65%
• Amazon DSP: 10–15%
• Google (branded + non-branded): 10–15%
• Meta/TikTok (brand + remarketing): 10–15%
• Email/SMS tooling: 3–5%

Omnichannel DTC brand also selling on Amazon, Walmart, and Target:

• Meta + TikTok: 25–30%
• Google (Search, Shopping, PMax): 20–25%
• Amazon Ads: 15–20%
• Walmart Connect: 5–10%
• Roundel / other RMNs: 3–7%
• CTV / YouTube: 5–8%
• Email, SMS, affiliate: 8–12%

Pure DTC brand (no marketplace presence):

• Meta + TikTok: 35–45%
• Google: 25–30%
• Retail media DSP (Amazon, Instacart, Kroger without needing to sell on platform): 5–10%
• Influencer/UGC: 8–12%
• Email/SMS: 8–10%

These are starting points, not gospel. According to Gartner’s 2024 CMO Spend Survey, marketing budgets sit at 7.7% of company revenue on average, with digital channels absorbing 56% of that total [Gartner, 2024]. Within digital, retail media’s share is climbing 3–5 percentage points per year at consumer brands. For a broader view of how channels shift across company stages, see our guide to e-commerce KPIs by business stage.

How do I run an incrementality test on retail media?

Amazon’s closed-loop attribution is a double-edged sword: it makes RMN campaigns look extraordinary because they capture demand that would have converted anyway. Branded Sponsored Product ads on your own listings frequently show 8–15x ROAS — but if you paused them, most of that revenue would still come through organic rank.

Run quarterly incrementality tests:

1. Pause branded Sponsored Products in a controlled set of ASINs for 2–3 weeks.
2. Measure the delta in organic sales versus a matched control group.
3. Recalculate true incremental ROAS. Expect it to be 40–70% lower than reported ROAS for defensive branded campaigns [McKinsey Digital, 2023].

This same discipline applies to Walmart and Target. Without incrementality testing, you will over-invest in bottom-funnel RMN and starve the top-funnel work that actually grows the brand.

Advanced Tactics for Each Platform

Each of the big three RMNs rewards different tactical approaches. Amazon rewards DSP layering on top of Sponsored Ads, Walmart favors item-page conquest and in-store velocity signals, and Target’s Roundel shines for creative-heavy launches tied to physical retail moments.

How do I layer Amazon DSP on top of Sponsored Ads?

Once you’ve saturated Sponsored Product placements (typically at 10–15% ACOS on hero SKUs), the next dollar goes to Amazon DSP. Use DSP audiences like:

• Shoppers who viewed your product but didn’t buy in the last 30 days.
• Competitive conquest — shoppers who bought a competitor’s product in the last 90 days.
• Category browsers who haven’t purchased in your subcategory in 6+ months.

Brands running DSP alongside Sponsored Ads see 30–40% higher new-to-brand purchase rates on Amazon than those running Sponsored Ads alone [Amazon Ads via Digital Commerce 360, 2024].

What Walmart Connect placements deliver the best ROI?

Walmart’s algorithm rewards products with strong in-store velocity and 3P seller ratings. Focus Sponsored Search budget on:

• Category head terms where you have Buy Box ownership.
• Competitor-targeted item page placements (they carry higher CTR than search on Walmart).
• Walmart Connect DSP for reaching lapsed omnichannel buyers via Vizio CTV inventory.

When does Roundel deliver the strongest returns?

Roundel’s minimum campaign spends are higher ($25K+ is common for DSP), so it’s typically a mid-market and enterprise channel. Where it shines:

• New product launches into Target stores — Roundel campaigns tied to a physical launch drive 3–5x higher trial rates than digital-only launches [Kantar via eMarketer, 2023].
• Beauty and home categories where Target Circle members show high repeat purchase rates.
• Seasonal tentpole moments (back-to-school, holiday) where premium display and CTV inventory drives incremental basket size.

For brands operating brick-and-mortar footprints alongside these networks, our omnichannel roadmap for physical retailers shows how in-store data can feed RMN targeting.

Measurement: Reconciling RMN Metrics With MMM

Because every RMN reports its own ROAS using its own attribution window, comparing them apples-to-apples is nearly impossible without a unifying framework. Best practice for 2025 is to combine Marketing Mix Modeling, geo experiments, and a portfolio-level efficiency ceiling rather than trusting any single platform dashboard.

What is MMM and why does it matter for RMN?

1. Marketing Mix Modeling (MMM): Even sub-$50M brands can now run MMM using open-source tools like Meta’s Robyn or Google’s Meridian. MMM reveals the true contribution of each RMN net of baseline and cross-channel halo.
2. Geo experiments: Because RMN campaigns can be geo-targeted, they are ideal for holdout testing. Pause Walmart Connect in 10 randomized DMAs for 4 weeks and measure the sales delta.
3. Blended ROAS ceiling: Set a portfolio-level MER (marketing efficiency ratio) target rather than platform-specific ROAS targets. This forces prioritization based on incremental contribution, not vanity metrics.

Forrester found that brands using MMM alongside RMN platform reports reallocated an average of 18% of spend within six months, driving 12–20% improvement in blended efficiency [Forrester Research, 2024].

Common Budget Mistakes to Avoid

The four most damaging RMN budget mistakes are over-funding branded defense, ignoring cross-channel halo, treating retail media as “free money” from trade budgets, and underinvesting in creative. Each quietly erodes portfolio efficiency even when platform dashboards look green.

Why is over-funding branded defense a trap?

Bidding aggressively on your own brand terms across Amazon, Walmart, and Google can consume 20–30% of budget while adding minimal incrementality. Cap branded spend at the level required to defend against competitor conquest, not maximize reported ROAS.

How does the halo between channels distort reporting?

Google searches for a product often follow Amazon exposure, and vice versa. A brand that shifts 30% of its Meta budget to Amazon Sponsored Products may see Meta ROAS drop — because Meta was seeding the demand Amazon now captures. Always evaluate channel changes at the portfolio level.

Why shouldn’t RMN be funded entirely from trade budgets?

Many CPG brands fund retail media from trade marketing budgets rather than working media. This creates governance confusion: sales teams optimize for volume commitments; marketing optimizes for brand equity. Establish a joint commerce media committee with shared KPIs.

How much should I spend on RMN creative?

RMN placements are still creative-driven. Sponsored Brand videos on Amazon can drive 2x higher CTR than static Sponsored Brand headers [Amazon Ads, 2024]. Roundel display responds strongly to lifestyle imagery tied to Target’s aesthetic. Budget 8–12% of RMN media spend on dedicated creative production.

The Emerging Retail Media Landscape Beyond the Big Three

The number of active retail media networks in the U.S. has grown from around 20 in 2021 to more than 200 in 2024 [Path to Purchase Institute via eMarketer, 2024]. Beyond Amazon, Walmart, and Target, brands should evaluate category-specific networks like Instacart, Kroger, Chewy, Home Depot, and Uber against three criteria: shopper fit, SKU distribution, and minimum-spend economics.

Which emerging RMNs deserve evaluation in 2025?

• Instacart Ads: Essential for grocery and CPG brands; Sponsored Product ads deliver reported ROAS of 15x+ for many categories.
• Kroger Precision Marketing: Best-in-class first-party data via 84.51°, strong for premium grocery and health brands.
• Chewy Advertising: Pure-play for pet brands with exceptional intent signal.
• Home Depot Retail Media+: Growing quickly for home improvement, tools, and outdoor brands.
• Uber Advertising: Ride and Eats surfaces offer novel contextual and location-based targeting.

Rather than joining every network, evaluate each against three criteria: (1) does the retailer’s shopper base match your ICP, (2) do you have SKUs distributed there or intent to expand, and (3) is minimum spend justified by expected incremental volume? For a broader view of how these fit into emerging channel dynamics, our digital marketing & e-commerce trends 2026 analysis covers where retail media, AI, and zero-click search intersect.

A 2025 Playbook: Building Your RMN Budget in 5 Steps

A disciplined RMN budget starts with mapping revenue to channel, setting a working-media ratio, establishing incrementality baselines, building a quarterly reallocation cadence, and investing in retailer-specific creative pipelines. These five steps convert retail media from a reactive line item into a compounding competitive advantage.

1. Map revenue by channel of purchase. If 25% of your revenue comes from Amazon, your Amazon Ads spend should not be capped below 25% of paid media as a starting hypothesis.
2. Set a working-to-non-working media ratio. Aim for 85/15 — no more than 15% of RMN budget on fees, agency, and creative. Watch that RMN agency fees can quietly reach 12–18% of spend.
3. Establish incrementality baselines. Before scaling any RMN, run a two-week pause test and document the true incremental ROAS floor.
4. Build a quarterly reallocation cadence. Use MMM output plus experiment results to shift 5–10% of budget across channels every quarter.
5. Invest in creative pipelines specific to RMN. Retailer-specific creative — including Sponsored Brand video, A+ Content, and Roundel display — should be produced quarterly, not annually.

Final Thoughts: Retail Media Is Table Stakes, Not a Silver Bullet

Retail media networks have earned their place in every serious e-commerce budget. Amazon, Walmart, and Target each offer distinct shopper bases, ad units, and measurement advantages that no cookie-based platform can currently match. But the closed-loop attribution that makes RMNs so seductive is also the trap: reported ROAS overstates incrementality, and over-allocating to bottom-funnel sponsored ads will slowly starve the brand-building activity that fuels long-term growth.

The brands winning in 2025 treat RMN as one instrument in a portfolio, not a slot machine. They set portfolio-level efficiency targets, run incrementality tests every quarter, invest in creative that respects each retailer’s aesthetic, and reallocate budget based on MMM — not last-click dashboards. Do that, and retail media becomes a compounding advantage rather than an expense line that only ever grows.

Frequently Asked Questions

What is a retail media network in simple terms?

A retail media network is an ad platform owned by a retailer (like Amazon, Walmart, or Target) that lets brands buy ads targeted with the retailer’s first-party shopper data. Ads can appear on the retailer’s own site and app, on connected TV or the open web, and increasingly on in-store screens. The defining feature is closed-loop attribution: the platform sees the ad exposure and the purchase.

How much of my e-commerce budget should go to retail media?

It depends on where your revenue comes from. Amazon-native sellers often put 55–65% of paid media into Amazon Ads, omnichannel DTC brands typically allocate 20–30% across Amazon, Walmart, and Roundel combined, and pure DTC brands may use only 5–10% via off-site RMN DSP. Use revenue-by-channel as your starting hypothesis, then adjust based on incrementality tests.

Is Amazon Ads more expensive than Walmart Connect?

Yes. Amazon Sponsored Product CPCs generally run $1.20–$2.50 in competitive categories, while Walmart Connect CPCs are typically 30–50% lower for equivalent keywords. However, Walmart’s search volume is a fraction of Amazon’s, so lower CPCs don’t automatically translate to higher volume. Walmart is often a strong efficiency play layered on top of Amazon, not a replacement.

How do I measure the true ROI of retail media?

Combine platform-reported ROAS with incrementality tests (pausing campaigns in a matched control set for 2–3 weeks) and Marketing Mix Modeling using tools like Meta’s Robyn or Google’s Meridian. Expect true incremental ROAS on defensive branded campaigns to be 40–70% lower than reported figures. Set portfolio-level MER targets rather than platform-specific ROAS goals.

What is the difference between Amazon Sponsored Products and Amazon DSP?

Sponsored Products are keyword-targeted ads that appear in Amazon search results and product pages, priced on a cost-per-click basis. Amazon DSP is a programmatic platform that serves display, video, and audio ads across Amazon properties (like Prime Video and Twitch) and the open web, using Amazon’s shopper data for targeting. DSP is typically layered on top of Sponsored Ads to reach upper-funnel and lapsed audiences.

Can I use retail media if I don’t sell on Amazon or Walmart?

Yes. Amazon DSP, Walmart Connect DSP, Roundel, and Kroger Precision Marketing all offer off-site programmatic products that let brands target retailer shopper audiences on the open web and CTV without needing a product listing on the retailer’s site. This is particularly useful for DTC brands wanting to reach specific shopper segments with deterministic identity.

How often should I rebalance my RMN budget?

Quarterly is the sweet spot. Monthly reallocation is too reactive and creates noise; annual planning is too slow for a channel growing 20%+ per year. Use quarterly MMM refreshes plus experiment results to shift 5–10% of budget across channels, and reserve monthly reviews for tactical bid and creative optimization within each platform.

References

eMarketer (2024). Retail Media Ad Spend Forecast. https://www.emarketer.com/content/retail-media-advertising-forecast

Forrester Research (2024). The State of Retail Media 2024. https://www.forrester.com/report/the-state-of-retail-media-2024/

Gartner (2024). CMO Spend Survey 2024. https://www.gartner.com/en/marketing/research/annual-cmo-spend-survey-research

Statista (2024). Amazon Advertising Revenue Worldwide. https://www.statista.com/statistics/259814/amazons-worldwide-advertising-revenue/

Digital Commerce 360 (2024). Retail Media Networks: The New Marketing Frontier. https://www.digitalcommerce360.com/topic/retail-media-networks/

Semrush Blog (2024). Amazon PPC Benchmarks and CPC Trends. https://www.semrush.com/blog/amazon-ppc/

Search Engine Journal (2024). Walmart Connect vs Amazon Ads: A Comparison. https://www.searchenginejournal.com/walmart-connect-advertising/

McKinsey Digital (2023). Retail Media Networks: The Path to Profitable Growth. https://www.mckinsey.com/industries/retail/our-insights/retail-media-networks-the-path-to-profitable-growth

Boston Consulting Group via Digital Commerce 360 (2023). The Economics of Retail Media. https://www.bcg.com/publications/2023/why-retail-media-networks-are-thriving

Path to Purchase Institute via eMarketer (2024). U.S. Retail Media Network Landscape. https://www.pathtopurchaseiq.com/retail-media

Amazon Ads (2024). Sponsored Brands Video Benchmarks. https://advertising.amazon.com/library

Numerator via eMarketer (2024). Target Shopper Demographics Report. https://www.numerator.com/insights