Retail Media, the Third Force in Advertising: $165B Worldwide in 2026 and the New Rules of Budget Allocation

For years the leads in digital advertising were search (Google) and social (Meta). But a third force is now rapidly gaining presence: "retail media," where retailers open up their own purchase data and shelf space as ad inventory. Retailers and marketplaces such as Amazon and Walmart—and, in Japan, Rakuten and Yahoo! Shopping—sell product-search results, on-site banners and in-store signage as advertising products.

According to the research firm eMarketer, global retail media ad spend is set to expand from about $122 billion in 2025 to roughly $165 billion in 2026. The 2025 growth rate was 17.6% year on year, and its share of total digital ad spend reached 15.4%. There are forecasts that by 2028 it will make up about a quarter of digital advertising and overtake social advertising (all eMarketer projections).

Why is this area growing so fast? And, as someone responsible for marketing or brand budgets, what should you rethink? Below, we grasp the overall picture, then dig into the reasons for the growth, the reality of concentration among two giants, and how to approach it in practice.

The "third ad force" after search and social

The essence of retail media is the ability to reach "people about to buy" right "at the place of purchase." Search ads catch high-intent moments, but the purchase happens on a different site. Social ads build awareness, but there is distance from there to purchase. Retail media, by contrast, shows ads on the very screen where someone is searching, comparing and adding to cart. The distance between ad and purchase is almost zero.

Moreover, retailers hold first-party data on "who bought what, for how much." They can measure within the same platform whether someone who saw an ad actually went on to buy. This "closed-loop measurement" is a powerful weapon in a world of online ads where effectiveness is hard to see.

$165 billion worldwide in 2026—the momentum in numbers

First, a sense of scale.

A market adding more than $40 billion in a single year is a standout growth area within digital advertising. The US alone is set to see about $71 billion in 2026—a scale far above, for instance, Japan's terrestrial TV ad spend. Within a digital ad market often called mature, retail media is the one segment still posting double-digit growth.

Why it's growing—first-party data and "closed-loop" measurement

Two structural shifts underpin the growth. One is that privacy regulation and limits on third-party cookies have made tracking-based advertising that relies on external data harder. Advertisers have come to seek media that hold "reliable first-party data collected with consent," and retailers holding purchase histories became the leading destination.

The other is the certainty of measurement. The return on ad spend (ROAS) can be shown with actual purchase data, not estimates. When management asks "how much did that ad contribute to sales," retail media has an answer. It is natural for budgets to flow to media that can show numbers directly tied to sales rather than uncertain awareness advertising. There is also ample headroom: roughly 80% of consumer spending still happens in physical stores, yet about 90% of retail media advertising is skewed online. In-store retail media, such as shelf signage, is a market only beginning to open.

The reality of concentration among two giants

There is, however, an imbalance not to be overlooked. In the US, Amazon and Walmart are projected to absorb over 89% of the new ad dollars added to retail media in 2026. Amazon's ad revenue in particular is set to reach $60 billion in 2025, about $70 billion in 2026 and over $75 billion in 2028—more than $6.5 billion ahead of the next-largest. Amazon holds roughly 75% share of US retail media.

For advertisers this is both an opportunity and a dependency risk. If the most efficient place to capture sales concentrates in a specific giant platform, the listing terms and fees are controlled by that house. The more you shift budget into retail media, the more your selling rides on that platform's playing field—a structure you must understand before you use it.

Japan and the brand-side practice—how to rethink budget allocation

Japan's e-commerce market is expected to reach about ¥38 trillion in 2026, and atop it Amazon, Rakuten and Yahoo! Shopping are strengthening their ad businesses. For brands and sellers, retail media is no longer a question of "whether to do it" but "how to allocate to it."

There are three starting points in practice. First, build budgets that separate the roles of awareness (social, video) and harvest (retail media). Retail media is strong just before purchase but weak at creating new demand; pour everything in and you eventually run out of demand to harvest. Second, don't take closed-loop numbers at face value. Measurement that completes within the platform tends to overstate as "ad results" the people who would have bought the brand anyway. Third, be conscious of dependence on the two giants and invest in multiple retail media and your own EC data foundation to preserve negotiating power and options. Retail media is powerful, but never forget it is the house's playing field—that is the premise for not getting budget allocation wrong.

Key takeaways

• Retail media is the "third ad force" after search and social. Global spend expands from about $122B in 2025 to roughly $165B in 2026; 2025 growth was 17.6% YoY and it made up 15.4% of digital ad spend (eMarketer projections).
• Its strength is placement "just before / at the place of purchase" and closed-loop measurement via first-party data. As privacy rules curb tracking ads, budgets gather around retailers holding purchase data. With ~80% of consumer spend in stores, in-store retail media has headroom.
• In the US, Amazon and Walmart take over 89% of 2026's incremental dollars. Amazon's ad revenue goes from $60B (2025) to over $75B (2028), with ~75% US share—high efficiency but dependency risk.
• Brands should rethink allocation on three fronts: separating awareness vs. harvest roles, guarding against closed-loop overstatement, and diversifying away from two-giant dependence. Japan's EC market is about ¥38 trillion in 2026.