As retail media networks expand beyond their sites, they face new challenges like inventory constraints, data privacy, and competition from tech giants. Learn about the opportunities and risks of offsite retail media.
Retail media has claimed the crown as digital’s fastest-growing channel, acting as a magnet for ad dollars from brands facing signal loss and gravitating toward performance marketing. The narrative has been one of breathless growth, with retailers touting massive gains from their bets on selling ads that lean on customer data. Now comes the hard part.
This year, retail media networks’ focus is shifting from onsite advertising—running campaigns on assets the retailer owns, like a website—to the offsite world, in areas like connected TV (CTV), social, and open-web programmatic. Retail media network execs view offsite as a swing at the big leagues, a chance to prove their first-party data power can extend beyond retail to reshape the wider digital landscape.
“It is a real expansion of the value proposition that retail media can provide, I think,” said Ali Miller, vice president of ads product at Instacart, which works with platforms like Google, Roku, and NBCUniversal.
However, the risk for retail media networks looking to broaden their appeal could be significant. Without the proper safeguards, retailers could contribute to programmatic transparency woes. Even worse, individual networks could undermine their value proposition to advertisers at a time when standing out against the growing competition is critical.
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For now, advertisers and publishers seem to be buying in. According to researcher Advertiser Perceptions, ad spending on offsite programmatic retail media will hit $20 billion this year, a massive leap over the $7.5 billion recorded in 2023. Media heavyweights like Disney are linking with some of the biggest retail media networks to improve the precision of CTV campaigns as buyers prioritize driving business outcomes over the usual video metrics like reach and frequency.
However, underpinning the offsite trend are pressures, including strains on supply. Mature retail media networks are nearing the limit of how many ads they can run onsite without hurting the user experience. Conversely, more nascent networks can’t compete in onsite inventory, placing them at a disadvantage without offsite levers to pull.
“One of the biggest drivers here of why off-property is expanding and going to expand so much faster is the inventory is limited on-property,” said Nicole Perrin, senior vice president of business intelligence at Advertiser Perceptions. “It is essentially unlimited off-property.
Google’s reversal on cookie deprecation is unlikely to dampen the desire for retail media as CMOs are tasked with making their advertising more performant. Offsite is a lucrative opportunity with very different financial, privacy, and ad quality considerations.
“At its best, [offsite] promises additional scale and performance,” said Nicholas Ward, co-founder and president of ad-tech firm Koddi. “At its worst, it can be sold and resold data from trusted customers, ending up on Made For Advertising sites.”
‘Oh s—t, where’s my supply?’
Offsite activity is rising as retail media’s growth rate is expected to cool. According to WARC, ad spending on the channel will grow 10.6% in 2025, a roughly three percentage-point drop compared to 2024, as trade budgets start to be exhausted.
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“We’re coming to the end of a phase transition in retail media, in commerce media, where the story was the growth,” said Ward.
Retail media networks see offsite as a way to win over nonendemic advertisers like financial services and automotive. Those buyers could provide a boost as CPGs are tapped out. Offsite also tends to skew the upper funnel compared to onsite when consumers are already visiting a retailer to make a purchase. However, offsite media also represents an adjustment in advertising returns, and the degree of control retailers can exert, presenting a steep learning curve for platforms that are, in many cases, still learning the marketing ropes.
“The reality is that it’s lower margin,” said Andrew Lipsman, an independent analyst at Media, Ads + Commerce. “It’s still healthy margins, but when you’re talking about onsite being often 80% to 90% gross margin, offsite might be 20% to 40%.”
