Why Programmatic Marketers Should Bet Big on Retail Media

Part 1 of 4 in the “Retail Media’s Programmatic Future” Series

Read the entire series

• Survival of the Smartest: Retail Media’s Race Toward Programmatic Profitability
• From Funnel to Tunnel: GenAI Is Collapsing the Path to Purchase
• Align or Fall Behind: Choosing the Right Programmatic Partner for Retail Media

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Nearly 90% of global digital display ad dollars will be traded programmatically by the end of the year—a staggering figure on its own. 

What’s powering that growth? Retail media. 

Yes, retail media is now the fastest-growing segment within programmatic advertising, and its rise signals more than a shift in budget lines. 

Amazon DSP illustrates this momentum. Rebranded as recently as 2018, it became the second-most used demand-side platform by 2021, an unusually fast climb in a programmatic ecosystem that has been evolving for two decades. That growth hasn’t slowed. During the most recent Prime Day, Amazon DSP’s share of Amazon ad spend rose from 8.7% in 2023 to 13.6% in 2024, and again to 15.6% in 2025. It’s a clear sign that budgets are flowing toward programmatic inventory in the retail media space.

This evolution marks a pivotal shift for both programmatic and retail media. The convergence of these two worlds is setting a new standard for how performance advertising works, and the brands and retailers that adapt fastest will define what comes next.

• 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.

This is the first installment of our four-part series, The Future of Retail Media Is Programmatic—or Bust, where we’ll break down why this shift is happening, what it means for marketers on both sides, and how to get ahead of it.

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“Retailers’ first-party data advantages will attract over a quarter of new programmatic display ad dollars between now and 2026.”

 (eMarketer, Programmatic Advertising Forecast and Ad Tech Trends H1 2025)

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Why programmatic buyers are flocking to programmatic retail media

Programmatic retail media is becoming an increasingly core channel for both programmatic marketers and retail media advertisers. 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

The forces driving this shift are changing how budgets are allocated, how campaigns scale, and how results are proven in ways that traditional programmatic approaches could never deliver.

Key differentiators of programmatic retail media:

• Targeting uses verified commerce signals instead of inferred interest 
• Automation streamlines previously siloed workflows and unlocks scalability
• Budget consolidation flows toward high-quality, brand-safe inventory closer to the point of sale than traditional programmatic inventory
• Cross-channel activation offers retail media as a bottom-funnel driver, complementing the mid- and upper-funnel open web inventory
• Measurement moves from modeled estimates to transaction-backed proof of impact

Here’s how each of these factors is reshaping programmatic retail media and why they matter for marketers on both sides.

Targeting: intent data replaces assumptions

Traditional programmatic targeting has relied heavily on demographics or interest-based segments, which often fail to capture genuine purchase intent. Retail media changes this dynamic by offering powerful retailer first-party commerce data—actual purchases, browsing patterns, and cart activity—to reach audiences based on verified behavior. This data reflects who people are as shoppers, not just who they are demographically or what they casually read online.

Consider how programmatic advertising traditionally handles apparel: buyers are targeted with third-party data for browsing fashion blogs or clicking on style inspiration posts, but that pool includes casual window-shoppers, trend-followers with no intention to buy, and even students researching looks for a project. Retail media removes that guesswork. A shopper adding sneakers or denim to their online cart demonstrates immediate intent to purchase. The same logic applies across categories: someone subscribing to a recurring grocery order is far more valuable to a food brand than a general “cooking enthusiast” flagged through browsing history

This shift is why commerce media is taking center stage. By leveraging these commerce signals programmatically across off-site environments, marketers maintain precision while extending their reach well beyond retailer-owned inventory. It allows brands to serve messages that are both timely and relevant, while still tying exposure back to measurable sales outcomes. Retail media’s use of this intent-rich data is why it continues to capture attention and budgets¹.

And unlike expensive third-party data, targeting with commerce signals is free when using them to target programmatic retail media.

Efficiency and automation: scaling without strain

Programmatic retail media also simplifies the operational burden that has long been a challenge for retail media advertisers. Instead of managing multiple retailer dashboards with separate workflows, automation consolidates campaign setup, bidding, optimization, and reporting into one programmatic system. This reduces manual tasks, accelerates decision-making, and enables teams to manage larger, more complex programs with fewer resources.

In Skai’s 2025 State of Retail Media survey, nearly 60% of leaders ranked platform consolidation as a top priority, underscoring the operational pain created by fragmentation and the demand for streamlined systems.

This isn’t just about speed for speed’s sake; it’s about strategic flexibility. Automated workflows mean marketers can shift budgets quickly based on performance trends, deploy creative refreshes without platform-by-platform delays, and scale successful tactics across multiple retailers in real time.

But, even further, programmatic retail media opens up the long tail of retail media inventory. Many marketers skip some RMNs because the operational costs of campaign setup/management/optimization don’t justify the smaller investments. However, as we know from other digital channels, there’s tremendous opportunity for low-hanging fruit via lower CPCs and higher engagement with long-tail publishers. 

The networks and partners offering this automation are setting a new baseline for retail media maturity. As budgets grow, marketers are gravitating toward environments that let them scale without adding operational strain, freeing teams to focus on strategy rather than manual upkeep.

Budget consolidation: capturing larger allocations

Marketers are concentrating their spending on platforms that deliver automation, scale, and provable outcomes. Retail media programs that operate programmatically fit this need perfectly, offering a unified way to reach high-intent audiences with clear measurement built in. This trend is about efficiency as much as it is about performance—fewer platforms mean cleaner reporting, easier governance, and less time spent reconciling data across systems.

Deloitte found that nearly 80% of retailers are restructuring their retail media networks to better compete for consolidated budgets. The result is a reshaping of how brands allocate dollars: larger, more strategic commitments flow to partners that offer cross-network orchestration and full-funnel visibility.

Retail media networks that lack programmatic access risk being squeezed out of this consolidation trend. As advertisers gravitate toward partners that can unify planning and execution, those unable to meet this demand are more likely to be relegated to small test budgets rather than core investment strategies.

Cross-channel integration: fueling full-funnel programs

Retail media is becoming increasingly part of a wider, full-funnel industry approach, as well as a full-funnel channel in its own right. Programmatic integration allows retail audiences to extend into CTV, premium display, social, and even digital out-of-home, all while maintaining commerce-based measurement. This breaks down silos and gives marketers continuity across discovery, consideration, and conversion within a single data spine.

61% of marketers see full-funnel retail media as critical for influencing consumers throughout their journey¹. This is particularly powerful in high-consideration categories like electronics or beauty, where early-stage brand impressions can be retargeted with purchase-driven calls-to-action down the line. Off-site activations also introduce scale that pure on-site retail ads can’t match, putting retail audiences in premium environments while retaining transaction-backed attribution.

Somewhat ironically, for both audiences—programmatic buyers & retail media advertisers—the cross-channel potential works in tandem with their existing programs. 

• For programmatic buyers, programmatic retail media gives them access to the bottom-funnel on retailer websites where they’ve never been able to reach before
• For retail media buyers, programmatic retail media works the opposite way; they can use it to complement their bottom-funnel programs with mid- and upper-funnel inventory

This evolution positions programmatic retail media as a direct competitor to traditional programmatic display and video budgets. But again, unlike those channels, every step is linked to purchase data, enabling a closed loop that covers awareness through to conversion.

Measurement: from guesswork to clarity

Measurement has long been one of digital advertising’s biggest hurdles. Traditional programmatic often depends on modeled conversions or attribution methods that leave performance open to debate. Retail media removes that ambiguity by tying ad exposure directly to confirmed transactions. Incrementality testing becomes more reliable, and ROI proof becomes standard rather than aspirational.

Over half of marketers now say they are proficient in measuring incrementality, up significantly from the year before¹. Forty percent also cited better measurement insights as the single biggest accelerator for future investment¹. With this level of clarity, finance teams see it as a channel with the same business impact rigor as search.

But that measurement proficiency isn’t necessarily because retail media is so technically superior to other channels, its endpoint is closer to the point-of-sale, making it a bit easier to track impact and influence to conversion. 

This standard of proof is setting a higher bar across digital advertising. As retail media demonstrates what verifiable ROI looks like, other programmatic channels will be judged against it, further accelerating its share of the budget.

Why programmatic retail media delivers exactly what both programmatic and retail marketers need

The rise of programmatic retail media isn’t just about what’s driving growth today. It’s about how it will reshape both disciplines moving forward. Beyond the five attractors fueling its current acceleration, this convergence is creating new possibilities that fundamentally change what programmatic marketers can buy and how retail media teams can run their programs.

We’ve highlighted specific benefits for both programmatic and retail media marketers throughout this post, but here’s a closer look at how this convergence uniquely supports each group:

The future for programmatic marketers: premium, safe, and closer to conversion

For programmatic marketers, retail media represents a chance to access premium, commerce-adjacent inventory that’s historically been out of reach. Retail media brings ad placements closer to the point of sale than standard programmatic display ever could. These environments are inherently brand-safe, tied to trusted retailer ecosystems, and avoid many of the quality and fraud concerns that have plagued the open web.

Non-retail [non-endemic] programmatic advertisers are also finding unique value here. For categories like travel, financial services, and entertainment, retail media provides a new way to target audiences based on shopping behavior that signals broader life stages and needs even if their products aren’t sold on those retailers’ sites. A streaming service can reach parents buying baby products, or an auto brand can target shoppers purchasing car accessories. This contextual relevance, paired with a commerce environment, allows non-endemics to tap into audiences they can’t reach as effectively through open-web programmatic.

Over time, more retail media inventory will be transacted through the same programmatic platforms marketers already use. This removes the barriers to testing and scaling. Campaigns targeting retail audiences can run side-by-side with broader display, CTV, and video buys, all within a single DSP interface. For programmatic teams accustomed to balancing scale with control, this means they can extend into high-intent retail environments without adopting entirely new workflows or tools.

The result is a blend of performance and accessibility: programmatic retail media offers the precision and accountability of commerce-driven advertising while staying aligned with the systems, bidding strategies, and measurement practices that programmatic marketers already know.

The future for retail media marketers: infinite reach and full-funnel maturity

For retail media marketers, programmatic integration solves a structural limitation. On-site retail ads, specifically search-triggered sponsored listings, are tied to shopper searches. While effective, the growth of search volume hasn’t kept pace with the rapid expansion of retail media budgets, creating a ceiling for available inventory.

Programmatic breaks through that ceiling. By extending retail audiences into off-site environments like connected TV, premium display, and social, retail media marketers can reach shoppers well before they enter a retailer’s site. This allows for true full-funnel planning: driving awareness and consideration upstream, then converting those same audiences downstream through on-site placements.

The virtually limitless inventory available programmatically also alleviates competition pressures on retailer-owned ad space. As budgets grow, retail media teams can supplement finite search and display slots with programmatic reach while maintaining commerce-backed targeting and measurement. This shift expands retail media beyond a demand-capture channel and positions it as a full driver of the customer journey, previously impossible without programmatic pipes.

Conclusion: Don’t wait to catch the programmatic retail media wave

Programmatic retail media has moved from an emerging concept to an essential strategy, reshaping how budgets flow and how performance is proven. Its ability to pair commerce-backed targeting with automated, scalable buying is bringing programmatic marketers closer to the point of sale than ever before while giving retail media teams the tools to run full-funnel campaigns that reach far beyond retailer sites.

For marketers, the message is clear: now is the time to lean in. Programmatic retail media offers premium inventory, safer environments, and transaction-level measurement that other programmatic channels can’t match. For retailers still operating without programmatic capabilities, the window is closing fast—advertisers are prioritizing partners who can deliver automated buying and off-site reach, and networks that can’t meet those needs risk being left behind.

Thank you for reading Part 1 of our series, The Future of Retail Media Is Programmatic—or Bust. In our next post, we’ll explore how programmatic solves the profitability challenges many retail media networks face and what that means for the next phase of retail media growth.

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¹ Skai’s 2024 State of Retail Media report