ANALYSIS Are we approaching the peak of inflated expectations with retail media?

According to Gartner’s Hype Cycle, Retail Media Networks are rising to be the “peak of inflated expectations”. What follows the ‘peak of inflated expectations? The ‘trough of disillusionment’, of course. 

As a metaphor for life – and business – peaks and troughs are to be expected – but is it really true? If you follow that pattern and Gartner’s logic, retail media networks won’t be widely implemented and well-understood for at least five to 10 years.

Given that the major technology platforms powering retail media such as Criteo and Citrus are really only five or six years old and the major retail chains started taking ecommerce seriously as a result of the pandemic, you could argue robustly that we are still in the early stage.

However, there are few tailwinds that are not there in other technologies that will push retail media networks forward:

• The Opinions of Wall Street matters for CEOs and Wall St likes Retail Media Networks: Goldman Sachs is explicit that the new ‘merchant-media’ model presents a largely unappreciated offset to eCommerce costs^[1]. Wall St hates rising costs – and eCommerce does cost. What better way to solve this that with a new, high margin business that leverages existing assets. In the most recent quarter of Q2 2025, Walmart profits rose faster thanks to advertising – the US advertising business had grown 30% in the past year, rocketing past the growth rate of the company as a whole.” No wonder the CEO of Walmart has been quotes as saying “I can’t remember a business with the margin structure of the advertising business here at Walmart” according 
• We have seen this playbook before: It’s 2007 and someone has just explained Google AdWords to you for the first time. Do you… A) Put your head in the sand and say ‘that will never catch on’, or B) Very quickly join the dots to see the opportunity coming from how AdWords captures intent with potential shoppers? What held back AdWords mass adoption was a lack of understanding by ad land and marketers. Given the last 15 years has worked up ad land to digital marketing, they now have a new channel to quickly apply these learnings – unlike at the dawn of AdWords, when there were no models to draw from.
• CFO’s Like ROI: “When you can run your 30 second TV commercial in tonight’s Patriots versus Dolphins game on Amazon Prime, rather than an NBC centre break, why wouldn’t you?” So writes Simon Andrews of Fix Insider Newsletter. Retail Media is much more easily attributed to a sale than a commercial on NBC. How do you think the conversations will go between a CFO and CMO when the different audience alternatives of TV and Retail Media ROI and attribution are combined?
• Instead of the peak of inflated expectations, it can be argued that Retail Media has barely begun.
• “As the foundation of limitless access to user data is challenged and potentially eradicated, the ground beneath the digital advertising ecosystem shifts, and new operating models emerge to capture the attendant inchoate opportunity. One of those new operating models is that everything becomes an ad network. Any company with sufficient supply of or access to consumer data — in a first-party environment! — is now presented with the opportunity to build an advertising network where previously that would have been impractical or even somewhat absurd”.
• This quote is from Eric Seufert who writes about advertising and monetisation on Mobiledevmemo.com. Seufert is behind the great phrase ‘Everything is an ad network’ He writes that all the uproar about cookies “bestow a privilege upon any form of first-party data that can be used for ad targeting in a native environment.”
• Put another way, any one i.e., retailers sitting on piles of first party data are in pole position to attract ad spend and offer closed-loop attribution – and most retailers have barely started monetising their data.
• Perhaps we have barely even started to climb up the peak of inflated expectations in the first place!

^[1] The Merchant-Media model: A new era for retailers as ad platforms: Goldman Sachs, 2021