Survival of the Smartest: Retail Media’s Race Toward Programmatic Profitability

Part 2 of 4 in the “Retail Media’s Programmatic Future” Series
(read part 1)

Explain this: Retail media will surge past $175 billion this year, accounting for around 18% of total digital ad spend worldwide, but many networks still can’t turn a profit.

That’s right. According to an internal Skai survey of retail media network executives, in what feels like an advertising gold rush, only 51% of retail media networks (RMN) hit their revenue goals last year, while just 12% feel extremely confident about reaching 2025 targets². Unless you are one of the two biggest at the top—Amazon and Walmart—your RMN might be struggling.

As we explored in the first article of this series, retail media is now the fastest-growing programmatic channel. It aligns to what both programmatic marketers and retail media advertisers want: scalable, targetable, high-quality inventory driven by valuable retailer first-party commerce data.

So, if programmatic is the future of retail media, why don’t more retail media networks offer it?

The issue isn’t demand, as advertisers are eager to spend on retail media, and budgets continue to grow rapidly. The problem is infrastructure. Most networks operate with manual processes, fragmented systems, and measurement capabilities that can’t prove incremental value at scale.

This profitability challenge is no longer about whether retail media can attract demand. It clearly does. The real dividing line is operational. Networks that modernize their infrastructure with programmatic systems are creating scalable and efficient businesses capable of meeting advertiser expectations. Those that don’t remain trapped in manual workflows that limit growth and erode confidence.

Retail media’s uncomfortable truth

Despite the hype, most retail media networks today are still early in their evolution. They offer limited media supply, rely heavily on manual processes, and struggle to integrate with the buying workflows advertisers expect.

Meanwhile, the big two are setting a very different pace:

Amazon: Building a programmatic powerhouse

Amazon’s DSP is fast becoming the first-choice buying platform for commerce advertisers, as Digiday reports. It enables brands to programmatically buy ads across Amazon’s owned-and-operated properties (like Amazon.com, Twitch, Fire TV) as well as third-party sites, all while leveraging Amazon’s proprietary audience and shopping behavior data.

And the company isn’t slowing down. Its recent partnership with Roku created the largest authenticated connected TV (CTV) footprint in the U.S., giving advertisers programmatic access to Roku inventory layered with Amazon consumer signals. This integration collapses the line between awareness and conversion, bringing CTV into the commerce fold. Brands can now target, engage, and measure performance in a loop just like they would on Amazon’s native channels.

Walmart: Scaling with Vizio and The Trade Desk

Walmart, too, has made aggressive moves to build a full-funnel, programmatic ecosystem. Through Walmart Connect, the company is using its Vizio acquisition as a catalyst for enabling advertisers to buy Walmart audience-powered ads across millions of smart TVs. This extends Walmart’s data and reach into the upper funnel with real-time addressability.

Walmart has also continued its deep partnership with The Trade Desk, allowing advertisers to activate Walmart’s first-party data through a leading open-web DSP. That means brands can extend their targeting beyond Walmart’s website into video, display, and audio placements, using commerce intent as the targeting engine.

These aren’t just ad products. They’re scaled, programmatic retail media ecosystems.

The programmatic divide is growing

For everyone outside the Amazon/Walmart orbit, keeping up without a programmatic engine is becoming unsustainable. Without automation, integrated data, and scalable inventory, most retail media networks are:

• Too fragmented to justify significant brand investment
• Too manual to scale profitably
• Too isolated to compete with open-web targeting options

And brands are noticing. According to Skai’s State of Retail Media 2025 report, nearly 60% of retail marketers surveyed said they want to consolidate retail programs into a single platform. That’s because managing dozens of disconnected platforms, each with its own measurement, audience rules, and buying processes, is inefficient and nearly impossible to optimize.

Beyond just ad dollars: retail media’s profitability problem can be solved through programmatic

Of course, the number one reason for RMNs to embrace their programmatic future is to attract marketing budgets. As presented in the previous article of this series, programmatic retail media is highly attractive to both programmatic buyers and retail media marketers: 

• For programmatic buyers: Programmatic retail media allows them to bring retailer first-party data and commerce audiences directly into their existing programmatic workflows. They can extend their current audience strategies, run retail media alongside other programmatic buys, and apply familiar bidding, targeting, and measurement approaches powered by verified purchase signals that tie spend directly to sales.
• For retail media marketers: Programmatic retail media extends retail audiences off-site and unlocks the scale needed to complement finite on-site inventory, powering true full-funnel campaigns that influence shoppers well before they search and convert.

However, it’s even more valuable to retailers.

By building programmatic infrastructure, RMNs will both attract ad dollars and fix the cost and complexity issues that erode profitability. 

Ten areas where programmatic can be highly beneficial to RMN profitability

A programmatic infrastructure addresses the operational, data, and scalability problems that limit margins today. Marketers prefer programmatic because it’s automated, measurable, and unified. For RMNs, those same capabilities remove inefficiencies, reduce waste, and create room to focus on growth-driving initiatives.

Unlocks the value of commerce data with programmatic activation

Retail media’s commerce data is its most powerful asset, but many RMNs confine it to on-site formats that limit its impact. Marketers are already paying premiums for less accurate third-party data, yet global retail media spend is expected to reach $175+ billion in 2025 precisely because commerce data connects ads directly to purchase intent.

Programmatic extends these signals into premium off-site environments while preserving closed-loop measurement. This not only drives new demand from marketers but also automates activation, eliminating manual segmentation and reducing operational drag. As Adtelligent observed, “Retail media offers lucrative additional business for retailers on the one hand, and enables brands to target consumers precisely on the other.”

Key takeaway: Programmatic turns commerce data into a scalable targeting product, attracting premium advertiser budgets while reducing manual processes.

Keeps retail media aligned with marketers’ unified buying approach

Marketers increasingly expect all channels to transact within the same DSP environment. Proprietary RMN dashboards force them to manage retail media separately, which slows spend and limits budget allocation.

According to research by Koddi:

• 96% of brands and agencies are open to buying on-site retail media through a DSP
• 80% said it would be easier to shift more budget to retailers if DSP buying were enabled
• 49% said DSP access would trigger a significant shift in budget

Programmatic solves this by embedding retail media into the buying platforms marketers already use. Aligning with existing workflows not only attracts incremental dollars but also reduces friction for internal RMN teams fielding platform-specific support requests.

Key takeaway: Programmatic integration plugs retail media directly into marketers’ unified buying and audience strategies, opening access to larger, consolidated budgets.

Reduces operational complexity and risk through automation

Manual campaign setup, audience management, and reporting create bottlenecks and errors that pull teams away from revenue-driving priorities. 66 percent of decision-makers cite cost efficiency as a core benefit of programmatic buying, because automation replaces the most labor-intensive steps in campaign execution.

Operational efficiency is the top buyer priority, and it benefits RMNs just as much. Automating routine workflows frees teams to focus on strategy and partnerships rather than troubleshooting errors, improving service for advertisers, and cutting waste.

Key takeaway: Automation reduces errors and labor-intensive workflows, increasing advertiser satisfaction and improving RMN margins.

Builds advertiser trust by standardizing measurement

Measurement remains a key driver of advertiser confidence, yet many RMNs still rely on inconsistent attribution. 47% of marketers rank attribution and measurement as their top investment priority.

Programmatic integrates transaction-level data into lift modeling and real-time dashboards, producing standardized incrementality reporting. As eMarketer noted, “the goal is adopting measurement tools that clarify total ROI and channel effectiveness.” Networks that deliver this proof move out of test budgets and into core, repeatable spend.

Key takeaway: Programmatic gives advertisers transparent, standardized proof of impact that secures larger and more predictable investments.

Removes buying friction with standardized execution

Retail media often forces advertisers into separate workflows that feel disconnected from how they buy other media. This friction slows activation and complicates budget management.

By enabling programmatic execution, RMNs reduce duplicative work for advertisers and simplify their own operations. As Koddi stressed, “buyers don’t just want scale, they want simplification.” Programmatic creates a familiar experience that accelerates spend velocity and improves efficiency for both sides.

Key takeaway: Programmatic standardizes retail media buying, removing barriers that slow campaigns and limit advertiser investment.

Consolidates platforms to control costs and scale faster

Many RMNs run multiple tools for ad serving, targeting, and reporting, inflating costs and slowing workflows. 57% of retail media leaders view platform consolidation as critical to improving efficiency and scalability.

“Platform consolidation is needed to address inefficiencies and streamline advertiser experiences,” says Nich Weinheimer, Skai’s Chief Strategy Officer.

Programmatic unifies fragmented systems into one infrastructure, lowering costs tied to licenses and training while creating a single source of truth for performance.

Key takeaway: Consolidation through programmatic reduces overhead while improving performance visibility, creating a scalable foundation for profitability.

Automation keeps costs low as volumes rise

Retail media growth outpaces manual workflows, leading to rising costs and bottlenecks. Nearly 75% of retailers say automated campaigns and AI-driven optimization are highly valuable because they reduce the burden on teams.

Automation enables scalable growth with low manual effort. By automating builds, pacing, and optimizations programmatically, RMNs scale advertiser support without expanding headcount linearly, preserving profitability as spend increases.

Key takeaway: Automation embedded in programmatic keeps cost structures flat while volumes and revenue grow.

Activates first-party data to deliver premium targeting

Retail media’s first-party data is unmatched, yet activation often lags due to siloed systems. First-party data will become the backbone of competitive strategies, according to eMarketer, especially as DSPs integrate directly with authenticated audiences.

Programmatic clean rooms and automated segmentation allow RMNs to monetize data at scale safely, improving performance while commanding premium rates.

Key takeaway: Programmatic unlocks safe, scalable use of commerce data that improves results and drives pricing power.

Increases transparency to strengthen advertiser confidence

Advertisers still see measurement gaps across retail media. 41 percent say RMNs lag in measurement compared to other channels.

As Forbes noted in Retail Media’s Next Challenge:

Standardization remains a significant challenge. “Each retailer defines incrementality differently,’ explains Alex Arnott, Director of Retail Media Strategy at New Stream Media (part of Dentsu). “The base concept is the same, but there are different attributes and measurement approaches creating inconsistent reporting.” Programmatic standardizes these views with unified dashboards tied directly to transaction data, giving advertisers the clarity they need to scale budgets confidently.

Key takeaway: Transparent reporting through programmatic builds trust and unlocks repeatable, higher-value advertiser commitments.

Levels the field for smaller networks with programmatic efficiency

Retail media spend is concentrated, with Amazon and Walmart projected to control 84% of the market. Smaller RMNs can compete only if they operate efficiently.

As ExchangeWire reported, “more than 250 RMNs exist globally, yet over 50 percent of advertisers partner with just 5–10.” Programmatic levels the field, letting smaller RMNs automate execution and deliver enterprise-grade performance without enterprise-sized teams.

Key takeaway: Programmatic efficiency enables smaller RMNs to compete profitably by delivering scale and quality in leaner operations.

But the window for manual operations is closing…

The retail media landscape is bifurcating rapidly. Networks with programmatic infrastructure are scaling exponentially while those relying on manual processes are getting left behind in ways that become harder to reverse each quarter.

Manual networks are becoming unviable faster than most realize

Networks with automated infrastructure can respond to market opportunities faster, optimize campaigns more sophisticatedly, and scale operations more efficiently than those relying on manual processes. This advantage compounds over time. Automated networks accumulate more campaign data, which improves their machine learning models. Better optimization drives superior performance, which attracts larger budgets. Larger budgets justify further infrastructure investment, widening the performance gap.

Networks that delay programmatic infrastructure investment risk falling into the “long tail” of media networks that attract testing budgets but never earn strategic partnership status. Once advertisers experience automated execution and sophisticated measurement, returning to manual processes becomes unacceptable.

Advertisers are consolidating to fewer, more sophisticated platforms

The move toward platform consolidation reflects advertiser sophistication rather than just operational convenience.

When marketers want to consolidate retail programs into single platforms, they signal that retail media has moved beyond experimental tactics into strategic media planning. This shift creates opportunities for networks that can integrate with advertiser workflows while creating risks for those that require separate processes and systems. Programmatic infrastructure enables the standardization and automation that sophisticated advertisers expect.

Networks that provide programmatic access through industry-standard interfaces can integrate into existing media planning and buying workflows. Those that require manual processes remain isolated from strategic budget allocation decisions. The networks achieving profitability at scale are those that have invested in programmatic infrastructure. Automation reduces operational costs while improving campaign performance. Advanced measurement capabilities justify premium pricing. Integrated data activation creates competitive advantages that drive advertiser loyalty.

Because in retail media, operational excellence determines strategic success. And operational excellence at scale requires programmatic infrastructure.

Conclusion: Programmatic is the roadmap to retail media profitability

Retail media is growing faster than any other channel, yet profitability remains out of reach for many networks. The gap is not on the demand side. Marketers are ready to spend, with retail media already projected to hit $177+ billion globally in 2025. The barrier is operational: fragmented systems, manual workflows, and underleveraged data slow growth and inflate costs. Programmatic infrastructure solves these problems by creating a foundation that attracts more advertiser dollars and eliminates the inefficiencies that drain margins.

For RMNs, programmatic is both a revenue and cost play. It gives marketers what they want—automation, unified workflows, and measurable outcomes—which draws more budget into the channel. At the same time, it reduces waste from redundant tools, error-prone processes, and manual labor. The result is a more efficient operating model that supports scale, improves advertiser trust, and turns growing demand into profitable growth. Networks that embrace this shift will be positioned to capture not just more spend, but also a larger share of it as marketers consolidate budgets toward partners who can deliver scale and proof with less friction.

The path forward is clear. Retail media networks that invest in programmatic infrastructure will be the ones that bridge the profitability gap, while those that delay risk being left behind as advertisers prioritize scalable, automated platforms. In a future article in this series, we will break down how RMNs can operationalize this shift, including the tools, partnerships, and internal changes needed to build the programmatic foundation that drives sustainable growth.

¹ Skai’s 2024 State of Retail Media report ² An internal survey of retail media networks