Retail Media has quickly evolved from a niche marketing channel into one of the fastest-growing segments in digital advertising. According to Business Insider, global retail media ad spend is projected to reach $62 billion by 2025, with forecasts indicating that the market will approach $100 billion by 2027. This growth is fueled by the rapid shift to e-commerce and the unique value of retailers’ first-party data.
While traditional retail media began with sponsored product ads and managed placements on retailer websites, the next frontier is programmatic retail media. This model combines the precision of programmatic advertising with the rich datasets owned by retailers, creating a more automated, scalable, and measurable way for brands to connect with shoppers.
In my Retail Media Strategy Guide I explored the foundations of retail media planning. This article takes a deeper dive into how retail media programmatic works, why it matters, and how advertisers can integrate it into their marketing mix.
This guide provides a clear overview of:
- What retail media programmatic is and how it differs from traditional buying models
- The main players and technologies shaping the ecosystem
- Benefits and challenges for brands and agencies
- Best practices to design a winning programmatic retail strategy
- The future outlook for this rapidly evolving space
What is Retail Media Programmatic?
At its core, retail media refers to the advertising opportunities offered by retailers, usually leveraging their digital platforms (websites, apps, marketplaces) and their customer data. Sponsored Products on Amazon or Carrefour’s display banners are typical examples.
Programmatic advertising is the automated buying and selling of digital ad inventory through platforms, algorithms, and real-time auctions. Instead of relying on manual negotiations for placements, programmatic enables data-driven transactions at scale and in real time.
Retail media programmatic is the intersection of these two models. It is the application of programmatic technology to retail media inventory – both on-site (ads appearing directly on a retailer’s digital properties) and off-site (ads on third-party sites and apps powered by retailer data).
In practice, this involves:
- Advertisers accessing retailer audiences via a Demand-Side Platform (DSP).
- Retailers or partners making inventory available through a Supply-Side Platform (SSP) or private marketplace deals.
- Buying decisions executed in milliseconds, based on algorithms that match audience segments with campaign objectives.
This model represents a shift from managed service models, where placements are manually booked with a retailer’s sales team, toward an automated and data-driven ecosystem.
The implications are significant: brands gain greater control, transparency, and scalability, while retailers can monetize data and inventory more efficiently.
How Retail Media Programmatic Works
Understanding retail media programmatic requires a look at the supply-and-demand dynamics that make the system function.
1. The Demand Side (Advertisers and Agencies)
On the demand side, brands and media agencies seek to reach relevant audiences with high precision. Instead of purchasing fixed placements on a retailer’s website, advertisers leverage DSPs (Demand-Side Platforms) to programmatically access inventory and audiences.
DSPs enable advertisers to:
- Select targeting criteria (e.g., shoppers who purchased vacuum cleaners in the last six months).
- Define bidding strategies and campaign objectives (e.g., maximize ROAS, increase awareness).
- Optimize campaigns in real time, automatically adjusting budgets and bids.
2. The Supply Side (Retailers and Publishers)
On the supply side, retailers such as Amazon, Walmart, Carrefour, Tesco, and Zalando provide access to their digital inventory and first-party data. These assets can be distributed through SSPs (Supply-Side Platforms) or made available via Private Marketplace (PMP) deals.
For retailers, benefits include:
- Monetizing website traffic and shopper data.
- Offering closed-loop attribution by linking ad exposure to sales.
- Maintaining control over data usage in programmatic auctions.
3. The Technology Layer
Between demand and supply sits the technology layer, which ensures automated, secure, and efficient transactions. The backbone of this layer is real-time bidding (RTB), which enables auctions to occur in milliseconds whenever a shopper loads a page or app.
Alternative models include:
- Programmatic Guaranteed: fixed inventory secured through programmatic channels.
- Private Marketplaces (PMPs): invite-only auctions for premium inventory between retailers and select advertisers.
4. Inventory Types Available in Programmatic Retail Media
Programmatic retail media spans multiple touchpoints along the shopper journey:
- On-site: Sponsored products, sponsored display, and banners within the retailer’s ecosystem.
- Off-site: Ads on external websites, mobile apps, or social platforms, targeted using retailer data.
- In-store digital: Programmatic-enabled digital out-of-home (DOOH) screens inside physical retail stores.
- Emerging formats: Connected TV (CTV) and audio advertising enriched by retail audience insights.
5. The Role of Retailer First-Party Data
A defining feature of retail media programmatic is the use of first-party retailer data. Unlike third-party cookies, which are being phased out, retailer datasets offer reliable signals on purchase intent and behavior.
This data can include:
- Purchase history (e.g., buyers of pet food in the last three months).
- Basket size and purchase frequency.
- Demographic or loyalty program data (depending on retailer consent policies).
The outcome is highly relevant targeting with reduced media waste, while retailers strengthen monetization strategies in a privacy-safe environment.
The Main Players in the Retail Media Programmatic Ecosystem
The growth of retail media programmatic is driven by a wide range of stakeholders, each contributing to the ecosystem with specific roles, technologies, and strategic objectives.
1. Retailers and Retail Media Networks
Retailers sit at the center of the ecosystem. By leveraging first-party shopper data and digital inventory, they have established Retail Media Networks (RMNs) that allow advertisers to engage with highly qualified audiences.
Examples include:
- Amazon Advertising: the global leader with its extensive on-site, off-site, and DSP ecosystem.
- Walmart Connect: expanding rapidly in the United States with strong in-store and omnichannel integration.
- Carrefour Links: a European network that combines loyalty data with digital activation.
- Tesco Media & Insight (powered by dunnhumby).
- Zalando Marketing Services: blending fashion e-commerce with programmatic advertising.
2. Demand-Side Platforms (DSPs)
DSPs are the platforms advertisers and agencies use to buy programmatic inventory.
Key players include:
- Amazon DSP: reaches both on-site and off-site audiences.
- The Trade Desk: collaborates with RMNs to extend reach across channels.
- Criteo Commerce Media Platform: specializes in commerce-driven targeting and retail partnerships.
3. Supply-Side Platforms (SSPs) and Ad Exchanges
SSPs enable retailers to sell inventory in programmatic environments, often through PMPs or guaranteed deals.
- PubMatic and Magnite increasingly integrate retail datasets.
- Criteo SSP focuses on commerce-specific supply.
4. Agencies and Trading Desks
Agencies orchestrate campaigns across multiple platforms and retailers, with specialized commerce divisions such as:
Trading desks provide operational expertise in DSP management, bidding, and cross-retailer reporting.
5. Brands and Advertisers
Brands are the ultimate buyers of retail media inventory. Their objectives vary from driving incremental sales to boosting visibility or capturing digital share of shelf. Increasingly, retail media programmatic is integrated into omnichannel media strategies, extending its role beyond conversion into awareness and consideration.
Ad Formats in Retail Media Programmatic
1. On-Site Advertising
- Sponsored Products: native ads tied to purchase intent.
- Sponsored Brands: enhance visibility at the top of search results.
- Display Banners: useful for awareness and category dominance.
2. Off-Site Advertising
- Display Ads on publisher sites targeted with retailer data.
- Video Ads enriched with shopper segments.
- Social Extensions integrating retailer data into platforms like Meta or TikTok.
3. In-Store Digital (DOOH)
Programmatic digital screens in-store deliver contextually relevant promotions, loyalty-based targeting, and geolocated activations.
4. Emerging Formats
- Connected TV (CTV) using retail data for precise audience activation.
- Programmatic Audio, including podcasts and streaming services, linked to commerce signals.
The Benefits of Retail Media Programmatic
- Access to first-party data: highly reliable targeting based on actual purchase behavior.
- Precision and relevance: campaigns can be built on granular audience segments.
- Automation: real-time bidding ensures efficiency and optimization.
- Transparency: detailed reporting on impressions, clicks, and sales outcomes.
- Full-funnel impact: supports awareness, consideration, and conversion stages.
- Scalability: cross-retailer and cross-channel reach through programmatic pipes.
Challenges and Limitations
- Privacy regulations (GDPR, CCPA) and cookie deprecation create complexity.
- Fragmentation: each retailer operates a separate network, requiring cross-platform expertise.
- Lack of standardization: limited common metrics across retailers.
- Complexity and cost: programmatic buying requires advanced tools and skills.
- Attribution challenges: linking online exposure with offline sales remains a work in progress.
Strategies for Success
- Define clear objectives: from ROAS to market share or awareness.
- Combine managed service and programmatic buying for flexibility.
- Leverage CRM/CDP data alongside retailer datasets.
- Experiment with deal types (open auction, PMP, programmatic guaranteed).
- Collaborate closely with retailers and agencies to maximize insights.
- Invest in measurement and dashboards to track performance holistically.
Measurement and Attribution
Key metrics include:
- CTR (Click-Through Rate)
- CVR (Conversion Rate)
- ROAS (Return on Ad Spend)
- Incremental Sales
- New-to-Brand Metrics
- Digital Share of Shelf
Attribution models are shifting from last-click to multi-touch attribution, enabling better visibility across the funnel. Retailers are also investing in closed-loop reporting to link ad exposure to transactions.
Case Studies and Examples
- Amazon DSP: a global leader offering comprehensive retail data-driven activation.
- Walmart Connect: integrating in-store and digital to deliver omnichannel solutions.
- Carrefour Links: demonstrating the potential of European retailer networks.
- McKinsey research highlights that brands using retail media strategically can achieve incremental ROAS uplift of 10–20%.
The Future of Retail Media Programmatic
- Market expansion: expected double-digit growth across all major markets.
- Standardization: IAB and other organizations working on common frameworks.
- AI and machine learning: deeper optimization of targeting and creative delivery.
- Integration with CTV, audio, AR/VR: extending retail media beyond commerce websites.
- Omnichannel convergence: tighter integration of in-store and online signals.
Conclusion
Retail media programmatic is reshaping the future of digital advertising. By merging the precision of programmatic technology with the power of retailer first-party data, it enables more efficient, measurable, and scalable campaigns.
Despite challenges such as fragmentation and measurement complexity, retail media programmatic provides clear advantages for brands and retailers alike. As the ecosystem matures, investment in this channel will become not only a competitive advantage but a necessity.
For a broader strategic view on retail media planning, see the Retail Media Strategy Guide.
Senior E-commerce & Retail Media Leader with 8+ years across Amazon and leading marketplaces. Focus on full-funnel strategy, programmatic retail media, and international media governance. Sharing frameworks and operating models for growth.
