The Hidden Costs of Retail Media Networks (and How to Maximize ROI)

Jul 25

Retail media networks (RMNs) have quickly become a cornerstone of digital advertising for consumer brands. In fact, eMarketer projects U.S. retail media ad spending to surpass $60 billion in 2025, with retailers like Amazon, Walmart, and Target all monetizing their owned digital real estate through sponsored listings, display ads, and video placements. These are media offerings provided by retail media networks.

On the surface, retail media offers a powerful promise: reach high-intent shoppers at the point of purchase. The rise of online shopping has made retail media networks a crucial channel for brands to reach consumers on the digital shelf. By leveraging the digital shelf, retail media networks allow brands to increase product visibility and engagement in online shopping environments.

Let’s break down the hidden costs of retail media networks and explore how brands can maximize return on investment without wasting budget.

Introduction to Retail Media

Retail media refers to the practice of using advertising platforms operated by retailers to connect brands with shoppers in highly targeted ways. These platforms, known as retail media networks, leverage rich first-party data collected from shoppers’ interactions, purchase history, and browsing behavior to deliver relevant ads at the right moment. Retail media networks offer a variety of ad formats, including sponsored product placements and display ads, all designed to capture attention within the retail environment, whether online or in-store.

As the advertising industry shifts toward privacy-first solutions, the value of first-party data has skyrocketed. Retail media networks are uniquely positioned to provide brands with access to this data, enabling more precise targeting and measurement than traditional third-party channels. With the rise of digital retail channels, retail media has become an essential part of the modern marketing mix, allowing brands to reach consumers at the point of purchase or consideration and drive measurable results.

The Retail Media Boom: Why Everyone’s Jumping In

Retail media advertising is attractive for three main reasons:

Shoppers are already in buy mode – They’re visiting PDPs and search results inside retailer ecosystems.
Retailers have first-party data – They can target and retarget users more effectively than third-party platforms.
Brands can “own” their shelf – Sponsored product listings and video placements increase visibility and help maintain category dominance.

The benefits of retail media include highly targeted advertising opportunities, improved return on investment, and new revenue streams for retailers by leveraging first-party data and engaging customers at the point of purchase.

But as the category matures, many brands are learning that what worked at a small test budget doesn’t scale easily. Retail media networks enable brands to access valuable ad inventory across both owned and third-party digital channels, increasing their ability to reach targeted audiences. And the trade-offs can eat into margins, fast.

The Hidden Costs of Retail Media Networks

1. Pay-to-Play Saturation

As more brands jump into RMNs, competition and cost-per-clicks (CPCs) rise dramatically. Retailers like Amazon, Walmart, and Target sell ad space to brands, which increases competition and drives up costs. On platforms like Amazon Ads or Walmart Connect, even niche categories can experience keyword bidding wars, inflating the cost of visibility.

What used to cost $0.25 per click may now cost $1.75 or more, especially during peak seasons. And because many RMNs favor incumbents or vendors with high spend histories, new brands struggle to compete without overpaying.

What this costs you: Escalating CPCs with no guaranteed increase in return. You may be paying more just to hold your ground.

2. Limited Control Over Targeting

Unlike Meta or Google, many RMNs restrict how granular you can be with targeting. Audiences are often predefined or lack transparency. Limited access to audience data makes it difficult for brands to optimize targeting and reach the most relevant shoppers. You might be buying placements under the assumption of high-intent targeting, but in reality, your ads may show up in irrelevant placements or across low-converting segments.

For example, “search partners” or “expanded networks” can include mobile games, third-party sites, or low-quality impressions.

What this costs you: Poor ad placement quality that inflates impressions and burns budget without generating clicks or conversions.

3. Measurement Gaps and Walled Gardens

One of the most frustrating parts of retail media is that most networks operate as closed ecosystems. Attribution reporting is often limited, delayed, or difficult to match with your own sales data. While platforms may report on the number of ads displayed, this metric alone does not provide a complete picture of campaign effectiveness. Multi-touch attribution becomes guesswork.

You might see strong ROAS (Return on Ad Spend) in the platform dashboard, but no measurable lift in sell-through or profit margins.

What this costs you: Inability to track true ROI, over-reliance on platform-reported metrics, and potential double attribution with other channels.

4. Cost of Content Production

To compete in RMNs, brands need high-quality creative assets, and a lot of them. Most networks require product images, videos, banners, and sponsored content, such as banner ads, that meet their unique specs.

Creating content for Amazon, Walmart, and Target often requires separate teams or agencies. The burden multiplies when localizing for international markets.

What this costs you: High creative production budgets with limited reusability, plus missed opportunities if assets aren’t optimized for conversion.

5. Execution and Ops Overhead

Many retail media campaigns are time-consuming to manage. Teams must juggle dozens of SKUs, promotions, and platform nuances. And unlike traditional paid media, many RMNs require manual adjustments or direct coordination with the retailer’s ad ops team.

Internal team strain or the need for specialized agencies adds to the operational cost.

What this costs you: Hidden labor and coordination costs, plus performance loss from slow iteration.

Evaluating Retail Media Networks

Choosing the right retail media network is a critical step in maximizing your ad spend and achieving your marketing goals. Start by assessing the size and relevance of the network’s audience. Does it align with your target shoppers and product categories? Next, evaluate the range of ad formats available, from sponsored products to display ads, to ensure you can deliver your message in the most effective way.

The quality of a network’s first-party data is another key consideration, as it directly impacts your ability to deliver targeted ads to relevant audiences. Look for retail media networks that offer transparent, consistent reporting metrics and support strategic business decisions with actionable insights. It’s also important to consider the network’s partnerships with third-party media companies, which can expand your reach and provide additional targeting options.

By carefully weighing these factors, you can select the right retail media network for your marketing strategy, optimize your ad spend, and drive better results across your campaigns.

How to Maximize ROI in Retail Media

Retail media doesn’t have to be a budget drain. Brands that approach it strategically can generate meaningful ROI and outperform competitors still stuck in “set it and forget it” mode. Leveraging personalized advertising through first-party data is a key strategy for maximizing ROI in retail media.

Here’s how:

1. Audit Your Media Efficiency

Start with a retail media audit. Analyze each platform for:

Spend vs. sales attributed
Impact on product sales
CPC trends over time
Ad placements and keyword quality
Conversion rates by ad type

Cut low-performing placements and shift budget toward high-converting SKUs or search terms. Identify spend that looks productive in-platform but shows no sales lift.

Pro tip: Use tools like Profitero, Flywheel, or Skai to unify reporting across RMNs and connect the dots between media spend and sell-through.

2. Use Conversion-Optimized Creative in Retail Media Advertising

Not all content converts equally. Product pages with high-performing video and education-based storytelling consistently outperform static images or text-heavy specs.

That’s where expert-led product videos come in. At The Desire Company, we’ve found that videos featuring real pros. Experts like chefs, athletes, makeup artists and more build trust faster and lift conversions by up to 12x on PDPs and 15% on paid placements.

Repurposing this content across your RMNs, PDPs, and paid social, as well as on-site display campaigns, allows you to increase returns without creating separate assets for each channel.

3. Standardize Content for Scale

Build content that’s modular, multi-platform, and evergreen. Instead of creating channel-specific one-offs, invest in assets that can be:

Resized for video ads and PDPs
Clipped into short-form for paid social
Reused across multiple retailers

This keeps your cost-per-asset low and maximizes impact. A single expert-led video can serve on Amazon, Walmart Connect, Meta, and your DTC site or be featured on a brand page within a retailer’s platform, saving weeks of production time.

4. Push for Better Attribution with First Party Data

Advocate for more transparent data-sharing with your RMN reps. Request access to conversion reports, category benchmarks, and even incrementality testing if available.

Better yet, use tools that let you map retail media spend to omnichannel sales lift, not just clicks. Third-party platforms or clean-room data integrations can help here.

5. Treat RMNs Like Any Other Paid Channel

Many brands put RMNs in a silo, but they should be part of your broader performance marketing mix. Treat each retail media dollar like any other ad dollar:

Hold it to performance KPIs
Compare it against Google, Meta, and programmatic
Optimize creative and targeting regularly

Don’t assume your retailer knows your brand goals. If you’re not getting transparency, performance reporting, or flexibility, push for it—or pause spend until you do.

Building Retailer Relationships

Success in retail media goes beyond just buying ad space, it’s about building strong, collaborative relationships with retailers. Retailers possess deep insights into their customers’ preferences and shopping behaviors, which can be invaluable for refining your marketing strategy and enhancing your brand messaging. By working closely with retail partners, advertisers can co-create compelling ad creative, optimize campaigns in real time, and share data to unlock new revenue streams.

This partnership approach allows brands to tailor their messaging to the retailer’s unique audience, ensuring that campaigns resonate and drive sales. Whether you’re launching a new product or scaling an existing one, investing in retailer relationships can help you stay ahead of the competition and maximize the impact of your retail media efforts.

Emerging Trends and Innovations in Retail Media

The retail media landscape is rapidly evolving, with new trends and innovations reshaping how brands connect with shoppers. One major development is the rise of commerce media, where retail media networks are used not only to drive sales within the retailer’s ecosystem but also to send traffic to third-party destinations like brand websites and social media platforms. This expands the reach and versatility of retail media advertising.

First-party data continues to be a game-changer, giving retailers and advertisers a competitive edge in targeting and personalization. Meanwhile, artificial intelligence and machine learning are increasingly being used to optimize campaigns, improve targeting accuracy, and boost return on ad spend.

Advertisers are also exploring new channels, such as mobile apps and in-store advertising, to engage shoppers wherever they are, whether browsing online or walking through a physical store. As digital ads and in-store experiences become more integrated, brands have more opportunities than ever to reach relevant audiences and drive growth.

To stay competitive, advertisers should keep a close eye on these emerging trends, invest in new technologies, and be ready to adapt their strategies as the retail media space continues to innovate.

What Winning Brands Do Differently

Brands that consistently succeed with RMNs:

✅ Use PDPs with conversion-first content (especially video)
✅ Repurpose creative across retailers, not just build bespoke
✅ Treat retail media spend as part of a holistic funnel strategy
✅ Connect retail and DTC insights to avoid blind spots
✅ Partner with content providers that deliver performance, not just production

Top-performing retail media networks are able to attract brands by leveraging high-quality data and advanced targeting solutions.

Final Thoughts: Invest Smarter, Not Just More

Retail media isn’t going anywhere. But pouring money into RMNs without a clear measurement plan, scalable content strategy, creative that actually converts, and the right retail media platform to support these goals is a recipe for wasted spend.

By identifying hidden costs, tightening your creative and measurement operations, and holding networks accountable for performance, not just impressions, you can turn retail media from a cost center into a growth engine.