Retail media has become one of the fastest-growing areas in digital advertising, but rapid growth is masking some structural problems that many retail media networks (RMNs) will eventually have to confront. In my conversation with Kiri Masters, we explored why retail media looks like easy money from the outside, but why many RMNs may struggle to build a sustainable business.
1. Retail Media Is Bigger Than Most People Realize
Before discussing the challenges, it helps to define the space clearly.
Commerce Media vs. Retail Media
- Commerce Media is the broader category:
- Retailers
- Airlines
- Financial services
- Hotels
- Travel platforms
- Ride-share businesses like Uber and Lyft
- Retail Media is the largest part of that ecosystem and typically includes:
- On-site: Sponsored product ads on retailer websites
- Off-site: Retailer audience extension into CTV, social, search, and other channels
- In-store: Digital screens and physical shopper marketing placements
The important point: many companies are entering the “media business” simply because they realize they have customer attention and first-party data—not because they have a long-term media strategy.
2. The “Retail Media Doom Loop”
One of Kiri’s strongest frameworks was what she calls the Retail Media Doom Loop.
How It Starts
Early RMN growth often comes from:
- shifting existing trade marketing budgets
- moving shopper marketing spend into measurable digital channels
- brands saying “why not?” because reporting improves
This creates fast early wins.
Where It Breaks
Eventually:
- that budget pool stops growing
- leadership expects continued growth
- advertisers demand better tools and stronger measurement
To keep growing, RMNs need:
- better technology
- self-service buying tools
- stronger measurement
- broader funnel access
- more internal operational support
That requires real investment.
The Problem
Growth slows at exactly the moment investment needs to increase.
This creates the doom loop:
- leadership sees slowing growth
- leadership becomes hesitant to invest
- advertiser experience gets worse
- spend shifts elsewhere
- growth slows even more
3. “Retail Media Is a Tax”
One of the sharpest observations in the interview:
Many Brands Feel RMN Spend Is Not Optional
Brands often describe retail media as:
“A tax”
Why?
Because retailers are often also their customers.
The dynamic becomes:
- historically, brands sold to retailers
- now retailers are also selling media back to brands
That creates tension.
Brands can feel:
- pressured during annual negotiations
- forced to spend to protect relationships
- uncertain whether the spend is truly incremental
If advertisers feel trapped rather than supported, long-term growth becomes much harder.
4. Merchant Alignment Is the Real Growth Lever
Kiri’s top recommendation for smaller and mid-sized RMNs:
Get the merchants aligned
This matters more than most people realize.
If Merchants Believe:
- media helps grow the category
- suppliers benefit from stronger demand
- media improves supplier relationships
- this is not just “turning the website into Times Square”
…then merchants will actively help sell the media business.
That changes everything.
If They Don’t
Retail media stays:
- politically isolated
- underfunded
- treated as a side project
Merchant buy-in is often the difference between scale and stagnation.
5. Self-Service Is No Longer Optional
Many RMNs start with managed services.
That can work early.
But mature advertisers want:
- direct platform access
- campaign control
- integrated reporting
- buying through existing DSPs and tools
Agency buyers increasingly use a simple filter:
“Is it self-service?”
If the answer is no, many won’t even consider the platform.
This becomes a major maturity test for RMNs.
6. The Amazon Problem
Every retailer compares itself to Amazon.
That can be dangerous.
Amazon is not really a normal retailer.
It is:
- a media company
- a cloud infrastructure company
- a data company
…that also happens to sell products.
Trying to copy Amazon’s retail media model without Amazon’s structure often creates bad decisions.
For many retailers, especially those with strong physical stores, the better opportunity may actually be:
In-store retail media
Not just sponsored product ads.
Their defensible advantage may be the store itself.
7. The Next Big Threat: AI-Commerce
Kiri’s strongest contrarian view:
AI-enabled commerce is a serious threat to retail media
…and most executives are not taking it seriously enough.
Why
Consumers are increasingly doing product discovery in:
- ChatGPT
- answer engines
- AI-assisted shopping tools
instead of:
- retailer search bars
- retailer browsing paths
- retailer product discovery pages
That means retailers lose:
- traffic
- behavioral signals
- intent data
- ad inventory attention
Retail media won’t disappear.
But where the ads live—and where retailers create value—will change significantly.
Final Thought
Retail media is not just a new revenue stream.
It is a business model that requires:
- strategic commitment
- internal alignment
- technology investment
- merchant partnership
- a clear long-term view
The retailers that treat RMNs as a side hustle may get early wins.
The retailers that treat them as a core capability are the ones most likely to survive the doom loop.