Most retail media networks are failing to meet advertiser expectations due to fragmented measurement, limited automation and constrained budgets, according to analysis by global consultancy Forrester.
However, commerce media networks, which use direct customer data from financial houses or travel industry loyalty programs, are emerging as a more scalable alternative.
The report, Commerce Media Can Fulfill Retail Media's Promises, finds that while Amazon continues to dominate the category, most other retail media networks lag in scale and effectiveness.
More than a third (38%) of marketers cite difficulty connecting performance across networks and 31% point to fragmented retail sales data as a key challenge.
Retail media budgets are also largely reallocated rather than incremental.
Forrester data shows 20% of advertisers fund retail media using trade budgets and another 20% draw from shopper marketing budgets, reinforcing the channel's positioning as an extension of trade marketing rather than a full-funnel channel.
Lack of automation is a further constraint. Unlike Amazon's highly automated platform, many retail media networks depend on manual workflows for campaign planning, execution and reporting, increasing operational complexity and slowing time-to-value.
Commerce media networks, powered by first-party data from industries including financial services, travel and mobility, are presented as a more performance-driven alternative.
Rather than impression-based buying, they enable outcome-driven engagement using transaction history, location signals and behavioural insights.
Nikhil Lai, principal analyst at Forrester, said the real opportunity for advertisers was to move beyond buying inventory and instead activate data.
"Rather than forcing advertisers to adapt to siloed platforms, commerce media enables data to move more fluidly across the ecosystem, making media investments more measurable, addressable, and effective,” said Lai.
“The real opportunity for advertisers is to move beyond buying inventory and instead activate data — using clean rooms, automation and interoperable systems to drive outcomes.”
Commerce media networks use indicators of intent such as credit scores, precise location data, or airline upgrade histories to identify captive audiences, deliver attentive reach and earn high response rates.
They enable advertisers to map moments along consumers’ nonlinear journeys, leading to relevant offers that seem organic rather than sponsored and interruptive.
For example, a beer brand can use a ride hailing app’s data to serve ads to drinkers enroute to bars.
WPP Media forecasts retail media to grow 19.5% to $2.3 billion in Australia this year, the fastest growing channel in the market.
In 2028, retail media is expected to overtake total TV ad revenue with an 8.4% market share ($3.07 billion).
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