The state of retail media | RMNs expand marketers’ reach via off-site advertising

However, while retail media remains one of the fastest-growing areas of advertising, maintaining that growth is becoming harder to achieve. According to a January report from the Interactive Advertising Bureau, commerce ad spend is expected to grow 15.6% in 2025, compared to 25.1% growth in 2024. EMarketer, meanwhile, is projecting that retail media will grow by 17.5% this year, but by just 10.4% by 2029.

Although RMNs have historically limited ad placements to their own digital properties, many RMNs have begun extending their ad offerings to off-site channels like social media, CTV and email in an effort to improve growth opportunities and to expand reach.

Partnerships with these types of platforms have allowed RMNs to open up ad inventory across the internet, essentially repositioning themselves from performance marketing channels to one-stop ad shops that can deliver full-funnel marketing opportunities for advertisers.

For this State of the Industry report, Digiday and Instacart surveyed 141 brand and agency respondents in September of this year to learn how they are expanding their audience reach through off-site retail media advertising. This report also covers how respondents are activating across off-site retail media, which off-site channels they’re spending on and the challenges they face within retail media.

“The way consumers engage with media has shifted significantly, with more time spent across various digital platforms like CTV and social media,” said Adam Silverblatt, head of off-platform sales and strategy at Instacart. “Media strategies have evolved in response to this behavior, focusing on reaching audiences where their attention is, whether they’re watching streaming, scrolling on their phones or navigating social platforms. This evolution allows RMNs to move up the marketing funnel, positioning themselves as comprehensive media partners for brands.”

Over the past two years, marketers have increased their ad spend on RMNs’ off-site media channels like social media, streaming platforms and email — a clear indication of their interest in broadening audience reach through these channels.

According to the Digiday and Instacart survey, nearly two-thirds of brand and agency respondents (62%) said that their off-site media spend on RMNs has increased since 2023. Less than one-quarter of respondents (22%) said their off-site RMN media spend has remained the same, and only 8% of respondents said their off-site RMN media spend has decreased over the past two years.

When it comes to how marketers are dividing their larger retail media budgets among today’s more than 200 RMNs, nearly three-quarters of brand and agency respondents (70%) said that they use four or more unique RMNs.

This disbursement of budgets and ads underscores the overcrowded nature of the current retail media marketplace, with hundreds of RMNs — including the growing number owned by major department stores and big-box stores — competing for marketers’ and consumers’ attention.

“As consumer shopping behavior continues to become more fragmented — with audiences no longer confined to a single retailer or platform, moving seamlessly between physical stores, e-commerce sites, apps and social commerce — the majority of marketers feel the need to meet consumers where they shop to ensure their products are top-of-mind regardless of shopping channel,” Silverblatt said.

“This also creates the marketers’ challenge of navigating a complex advertising ecosystem and puts growing pressure on marketers to figure out budget allocations and how to best optimize campaigns across a fragmented digital landscape,” he added.

Within off-site retail media, social media and programmatic media tied for the No. 1 channel in which survey respondents said they spend the majority of their budgets — 85% percent of survey respondents selected social media and programmatic media respectively.

CTV was marketers’ second-most used off-site retail media channel, with 68% of survey respondents selecting it as the off-site channel that receives the majority of their budget. Just one-fifth of marketers (20%) said that they allocate the majority of their budget to off-site email.

RMNs’ partnerships with tech platforms like Meta, Roku and Pinterest appeal to advertisers because of the ability to access robust first-party data that can be used to target relevant shoppers across platforms.

Likewise, RMNs have continued to expand their self-service capabilities and automate the advertising process when possible to enhance their programmatic capabilities. In addition to leveraging a retailer’s valuable first-party data to deliver highly targeted and personalized ads, brands benefit from the efficiency and scale of programmatic technology.

What began as experimentation with tapping into first-party retail media data across off-site platforms has shifted to a more strategic approach, according to Silverblatt. “As marketers have gained a clearer understanding of the available capabilities, they are increasingly focused on developing full-funnel strategies that extend beyond the point of sale to influence consumers earlier in their purchase journey,” he said. “With advancements in retail media data and CTV shoppable formats, brands are better positioned to engage consumers during the discovery and browsing phases, ultimately shortening the path to purchase and driving greater impact across channels.”

“Retail media networks are no longer just a point-of-sale tactic — they’ve become a bridge between commerce and media,” Lauren Lavin, executive director of NA Commerce at WPP Media, added. “By combining retailer first-party data with programmatic scale and emerging shoppable formats, brands can now influence consumers much earlier in the journey and carry that relevance through to conversion. The opportunity lies in connecting these data sets to deliver more intelligent, measurable outcomes for brands.”

Overall, marketers who use retail media advertising find it most effective for engaging consumers at the middle of the funnel. More than half of survey respondents (51%) said retail media marketing is most effective for mid-funnel marketing, while less than one-quarter of respondents (24%) said it is most effective for driving conversions or lower-funnel marketing. Only 9% of respondents said they find retail media advertising most effective for generating brand awareness, or top-of-funnel marketing.

While on-site RMN ads are inherently lower-funnel because of their proximity to the point of checkout, off-site retail media activations allow advertisers to position ads further up the funnel and apply retailers’ first-party customer data holistically across the open web.

“Retail media is redefining how brands connect with consumers in the moments that shape their decisions,” WPP Media’s Lavin said. “It’s evolved into one of the most effective channels for engaging shoppers during the research and comparison phase, when intent is high and attention is focused. As it extends beyond retailer-owned environments, retail media is enabling brands to deliver messages that are timely, relevant and genuinely useful rather than intrusive.”

In particular, mid-funnel marketing is important for brands that face significant competition in their categories, like CPG companies and other food advertisers, because mid-funnel marketing reaches shoppers during the research and consideration portion of the consumer journey — an essential moment for engaging shoppers’ attention.

“Retail media can help capture and influence decisions from consumers who are actively browsing and comparing products, but haven’t committed to a specific brand or product yet,” Silverblatt at Instacart said. “First-party retail media audiences can help marketers reach these high-intent audiences and drive them further down the path to purchase.”

Although only 15% of respondents said that retail media advertising is most effective for full-funnel marketing, Silverblatt explained that marketers can build comprehensive retail media marketing strategies by taking advantage of RMNs’ diverse ad placements.

“For example, at the top of the funnel, retail media can drive brand awareness through high-impact placements at scale, such as using streaming video placements,” he said. “To engage consumers in the consideration phase, marketers can utilize social placements or ad formats like carousel and catalog ads, which work particularly well in reaching audiences in discovery mode. For lower-funnel conversions, retail media directly connects advertisers to consumers at the point of purchase, such as sponsored product ads on a retailer site to get consumers to add to cart and purchase. When you bring all of these placements together, you start to build a full-funnel strategy that reaches consumers where they are and aligns with consumer mindsets at every stage.”

When Digiday and Instacart asked survey respondents about the top audience targeting strategies they leverage in their RMN media mix, nearly two-thirds of respondents (65%) said they use purchase-based targeting.

Because RMNs have access to robust consumer purchase data, they make strong partners for marketers who rely on past purchasing behavior to identify the consumers most likely to buy their products and to target those shoppers with relevant ads.

A joint study from MAGNA and Instacart found that, on average, 67% of the purchase-based retail media audience tested would not have been reached using third-party demographic data alone. And, campaigns that leveraged purchase-based Instacart segments had a 71% average lift in attention and a 67% average lift in interest compared to campaigns that relied on third-party demographic data.

“First-party purchase-based audiences from RMNs are based on real purchases, allowing marketers to reach a more qualified audience that we know is likely to be interested in a brand’s products or messaging based on how they ‘behave’ with their wallet rather than relying on proxy signals for audience segments,” Silverblatt at Instacart said.

The survey from Digiday and Instacart found that less than one-fifth of respondents said that they leverage RMNs for contextual targeting (14% of respondents) and interest-based targeting (13% of respondents), respectively.

However, Silverblatt said that marketers should not only think of RMNs for specific purchaser audiences, but that RMNs can also provide valuable segments to reach relevant personas based on what they’re interested in, or even what they’re searching for.

“RMNs like Instacart enable advertisers to build contextual audiences based on high-intent signals, such as consumers searching for relevant keywords to help marketers connect with shoppers who may not yet be ready to purchase, but are actively exploring their options,” he said. “This approach helps foster brand awareness and consideration.”

When comparing off-site and on-site retail media ad placements, off-site retail media ads have a slightly higher ROI for marketers than on-site retail media ads — by 8 percentage points, according to survey results.

More than half of survey respondents (53%) said that off-site retail media buys have the highest ROI for their company, while 45% of respondents said that on-site media buys produce the greatest ROI.

In comparison to legacy media channels like linear TV and even newer channels like social media, retail media measurement is still in its infancy. Less than two years ago, in January 2024, the IAB and Media Rating Council finalized retail media measurement standards. Those standards set a framework for audience measurement and metrics, best practices when measuring incrementality, and reporting and transparency.

Established retail media players like Instacart and Criteo received MRC accreditation not long after the standards were put in place — pointing to a push to ensure the metrics’ accuracy.

An industry-wide emphasis on measurement is expected to continue into the coming year, with advertisers prioritizing incrementality metrics over ROAS, which has traditionally been the gold standard across media channels to determine which ad campaigns are working, and which aren’t.

Currently, marketers consider several success metrics with almost even weight when judging retail media ad performance, according to the survey from Digiday and Instacart.

As with most media channels, retail media success first comes down to financial results. Almost two-thirds of respondents (65%) said driving sales across their portfolio of products is one of the most important success metrics they weigh to gauge the success of their retail media investments.

However, their next-most important success metrics paint a clearer picture of marketers’ in-depth retail media marketing strategies: Fifty-eight percent of survey respondents said deepening loyalty and repeat purchases is among their top three retail media KPIs, while 53% of respondents said driving engagement is one of their top success measurements.

Measuring how well retail media ads drive engagement and deepen loyalty aligns closely with mid-funnel marketing objectives to drive engagement, supporting this report’s earlier findings that marketers believe retail media advertising is most effective for mid-funnel marketing.

Additionally, when Digiday and Instacart asked survey respondents about the top metrics they use to evaluate the effectiveness of their off-site media buys, the majority of marketers said engagement, such as link clicks, is their main success metric (47% of respondents said this), followed by ROAS (35% of respondents).

This also tracks with the previously mentioned survey results in which marketers said retail media advertising is most effective for mid-funnel engagement marketing.

When deciding how to activate media across off-site retail media platforms, most brands prefer to use their own in-house teams, according to survey results.

Using in-house teams to directly activate within DSPs and media platforms like The Trade Desk and Meta received a weighted average score of 1.36 from brand survey respondents, making it their top choice. (The closer an activation method’s score was to 1, the higher survey respondents ranked it.)

Buying media from an aggregated platform like Pacvue and Skai was brand respondents’ second choice for how they prefer to activate within off-site retail media platforms, with a weighted average score of 2.28. Outsourcing media buying to a partner came in a close third with a 2.36 weighted average.

However, results were the opposite for agencies — a clear dichotomy indicating the different needs of brand and agency marketing teams.

According to the survey from Digiday and Instacart, buying media from an aggregated platform was agencies’ top choice for how to activate media across off-site retail media platforms, with a weighted average score of 1.53. Outsourcing media buying to a partner was agencies’ second choice with a weighted average score of 1.81, while using in-house teams to directly activate within DSPs came in last with a score of 2.66.

A company’s decision to choose one media buying activation method over another often comes down to its business needs, resources and desired level of control and expertise, according to Silverblatt at Instacart.

“Some advertisers prefer a self-service model, where they can directly create, manage and optimize campaigns in-house. This hands-on approach allows for greater control, flexibility and transparency, especially for advertisers who are comfortable with managing their own media buys and want to be able to make campaign optimizations or changes on-demand,” Silverblatt said. “For certain tactics or channels, advertisers will also have the ability to buy through an aggregated platform, or even access retail media targeting, shoppable formats and measurement directly within a buying platform, allowing advertisers to benefit from a low-friction ad buying experience.”

“The benefit of leveraging managed service is RMNs can bring in their expertise to craft full-funnel strategies that cohesively tie messaging and creatives across channels, from on-site to off-site and even in-store media. Advertisers can also unlock additional value or capabilities through managed service, such as more insights or executional expertise directly from the retail media network. Other advertisers may also want to outsource and leverage managed service support due to resource constraints. But managed service doesn’t usually offer full control or on-demand visibility to media buys, so some advertisers may stick with self-service.”

Brand respondents’ order of preference for how to activate media changed slightly when respondents were asked about general retail media channels, including both on- and off-site channels.

Using in-house teams to directly activate within DSPs and media platforms like The Trade Desk and Meta remained brands’ first choice with a weighted average score of 1.34. However, outsourcing media buying to a partner came in second at 2.26 in this context, while buying media from an aggregated platform like Pacvue and Skai was third with a weighted average score of 2.40.

On the other hand, agencies’ preference for how to activate media remained consistent when they were asked about retail media channels in general. Agency respondents said their top preference is to buy from an aggregated platform, with a weighted average score of 1.64. Outsourcing media buying to a partner is their second choice with a weighted average score of 1.94. Using in-house teams to directly activate media came in third with a weighted average score of 2.42.

With its status as a newer media channel and with measurement standards still taking shape, marketers face a variety of challenges across retail media. Survey respondents identified their top three challenges as navigating a fragmented marketplace, measuring incrementality and budgeting efficiently.

Thirty-three percent of survey respondents said fragmentation and lack of connectivity between retail media channels is the top challenge they face when it comes to marketing in today’s retail media landscape. Twenty percent of respondents said incrementality is their top challenge and 19% of respondents said efficient budget spending is their top challenge.

Retail media’s fragmented marketplace of more than 200 active RMNs is a key contributor to these struggles, according to Silverblatt at Instacart. “With a growing number of platforms and touchpoints that brands need to manage, this complexity creates challenges for brands and agencies that are striving to deliver scale while maintaining efficiency,” he said.

Brands’ preference to rely on their own in-house teams to activate media across on- and off-site retail media channels — noted earlier in this report — may be tied to the incrementality measurement challenges marketers face. To address those challenges, some RMNs have begun adding more tools and measurement capabilities that bring greater visibility and campaign control to marketers who prefer self-service models for their in-house teams.

For example, Instacart recently began offering what Silverblatt calls “end-to-end” retail media capabilities — including audience targeting, shoppable catalog ads driving to Instacart and closed-loop measurement — within TikTok Ads Manager, which is currently in pilot as of December 2025. Instacart offers those capabilities on other platforms and channels like The Trade Desk, as well as Pinterest, which is currently in limited release.

Looking to the future, Silverblatt said the immediate opportunity to alleviate challenges marketers face in retail media advertising lies in connecting digital, in-store and off-site media into cohesive, measurable full-funnel experiences, and in using AI tools to streamline processes.

“Over the next one to two years, we’ll likely see marketers become savvier in figuring out holistic strategies that integrate off-site advertising with on-site commerce media, alongside finding partners that excel at linking these efforts,” Silverblatt said.

“As we look ahead long term, we will likely see a push from the industry to figure out where the ‘easy’ buttons are to help make marketers’ jobs easier, including capabilities that better streamline media planning, targeting, execution and reporting,” he added. “We’re already seeing AI assist in optimizing performance within certain off-site channels and we’re seeing experimentation with processes like creative personalization. There will likely be a continued focus on executional ease so that marketers can spend more time on building performant strategies to deliver on their objectives and business goals.”

• Marketers have increased their ad spend on RMNs’ off-site media channels over the past two years. Nearly two-thirds of brands and agencies (62%) said that their off-site media spend on RMNs has increased since 2023.
  
• Nearly three-quarters of marketers (70%) use four or more unique RMNs — underscoring the overcrowded and fragmented nature of the current retail media marketplace, which consists of more than 200 RMNs.
  
• Within off-site retail media, social media and programmatic media tied for the No. 1 channel in which marketers spend the majority of their budgets — 85% percent of survey respondents selected those channels respectively. CTV was next at 68% of respondents.
  
• Marketers who use retail media advertising find it most effective for engaging consumers at the middle of the funnel. More than half of survey respondents (51%) said retail media marketing is most effective for mid-funnel marketing.
  
• Nearly two-thirds of marketers (65%) said purchase-based targeting is the top audience targeting strategy they leverage in their RMN media mix.
  
• Off-site retail media ads have a slightly higher ROI for marketers than on-site retail media ads — by 8 percentage points. Fifty-three percent of marketers said that off-site retail media buys have the highest ROI for their company, while 45% said the same for on-site media buys.
  
• Almost two-thirds of marketers (65%) said that driving sales across their portfolio of products is the top KPI they weigh for retail media. Their next-most important success metrics are deepening loyalty and repeat purchases (58% of respondents) and driving engagement (53% of respondents).
  
• Most brands prefer to use their own in-house teams to activate media across off-site retail media platforms, while most agencies prefer to buy media from an aggregated platform. Activation method preferences often depend on individual business needs, resources and desired level of control and expertise.
  
• Marketers’ top three challenges within retail media are navigating a fragmented marketplace (33% of respondents), measuring incrementality (20% of respondents) and budgeting efficiently (19% of respondents).
  
• The immediate opportunity to alleviate challenges in retail media advertising lies in connecting digital, in-store and off-site media into cohesive, measurable full-funnel experiences, and using AI tools to streamline processes.

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About Instacart

Instacart, the leading grocery technology company in North America, works with grocers and retailers to transform how people shop. The company partners with more than 1,800 national, regional and local retail banners to facilitate online shopping, delivery and pickup services from nearly 100,000 stores across North America on the Instacart Marketplace.

The Instacart Platform offers retailers a suite of enterprise-grade technology products and services to power their e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising services and glean insights. With Instacart Ads, thousands of CPG brands — from category leaders to emerging brands — partner with the company to connect directly with consumers online, right at the point of purchase.

Learn more at instacart.com/company