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Retail media is a form of advertising where brands pay to promote their products on a retailer’s own digital and physical properties. Retail media networks typically facilitate this by delivering highly relevant ads to purchase-ready shoppers.
Retail used to be simple. You put products on shelves, run ads, and hope shoppers act on them. Today, however, the shelf is digital, attention is expensive, and guesswork costs real funds. That shift is why brands are paying close attention to what retail media is and why it keeps appearing in growth plans.
Retail media turns your own channels into high-impact ad space powered by real shopping data. It helps shoppers' interest turn into sales. Explore how it does that and why more businesses are turning to it.
Table of contents:
Retail media is advertising that runs on a retailer’s own channels, including their website, mobile app, email campaigns, and even in-store screens.
Brands place ads where people already browse and buy, using purchase signals to reach buyers at the right moment. It naturally fits into omnichannel retail strategies, following shoppers across digital and physical touchpoints.
Retail media often shows up across a few key areas:
Most retail media is powered by retail media networks (RMNs) that let you sell ad space using insights from your own first-party customer data. That data comes from real transactions, browsing behavior, and loyalty programs.
For advertisers, this means precise targeting and measurement based on real shopping signals. As third-party cookies phase out, retailers can provide the trusted data brands need. Retail media networks make it a reliable way to connect ads to actual sales.
Retail media often involves closed-loop attribution, which means it's easier to directly link ad spend back to a confirmed sale. This provides a clear return on ad spend (ROAS), an important measure of online success.
Here is the general flow of how it works:
In retail media, we have two main types of advertisers: endemic and non-endemic. Endemic advertisers sell products directly through the retailer. Non-endemic advertisers don’t sell products through the retailer but want to reach their specific audience.
Retail media sits where decisions happen. When ads show up close to checkout, they influence real buying choices. That makes it an effective form of point-of-purchase advertising, especially as shopping moves across screens and stores.
Here are the key reasons it’s become a must-have for modern retailers:
Retail media advertising shows up in more places than many businesses expect. It spans online, mobile, email, and physical stores, giving brands multiple ways to connect with shoppers using trusted data.
For example, with PayPal advertising and insights from the PayPal Ads Dashboard, you can choose formats that match your goals and where customers are most likely to act.
Here are the most common retail media ad types, where they appear, and how businesses use them today:
Ad type | Where it appears | What it's ideal for | PayPal example |
|---|---|---|---|
On-site ads | Search results, product category pages, homepages, checkout pages | Driving immediate sales and visibility for products when customers are actively searching | PayPal Ads that appear on a partner retailer's product page, targeting an interest segment |
Off-site ads | Promote your business on social media platforms, other websites, or apps, powered by the retailer's audience data | Re-engaging past visitors or finding new customers using the retailer's valuable first-party data | PayPal Ads using our customer insights to target a relevant audience segment on a third-party website |
In-store ads | Digital screens, point-of-sale kiosks, and in-app placements based on physical location | Influencing a customer’s decision at the moment of truth inside the store | PayPal-powered offers or messages displayed on in-store digital screens or POS systems, triggered by location or past purchase signals when available |
Offers | Personalized coupons, discounts, or special financing terms presented to specific users | Encouraging customers to convert or trade up to a higher-value item | Offers and special deals delivered to customers based on their purchase history with PayPal |
Email and CRM placements | Targeted email newsletters, in-app notifications, and customer relationship management (CRM) channels | Building loyalty and promoting personalized recommendations based on past purchase behavior | PayPal Ads placed within a retailer's email to a segment identified through the PayPal Ads dashboard |
Retail media can give you a more grounded way to advertise where shopping actually happens. Here’s how retail media can help enable a seamless customer experience while supporting your marketing goals:
A retail media network gives advertisers the tools to use trusted data and clear measurement for smart targeting and high returns.
Retail media trends reflect how networks are expanding beyond retailer websites into broader commerce ecosystems.
Retail media networks are expanding across channels, leveraging smarter technology, and providing access to more businesses. These trends show how retail media is becoming more flexible, more data-driven, and easier to use at every stage of growth.
Retail media is rapidly moving beyond just the retailer's website. Retailers are also using their audience data to place ads on external sites and social platforms. This commerce media network allows brands to reach customers earlier in the shopping journey while still using reliable purchase data for targeting.
Many retail media networks are now leveraging artificial intelligence (AI)to help analyze vast amounts of data and build more precise audience segments.
Advertisers can use this guidance to target customers based on predictive behaviors, not just past purchases. AI also helps optimize bidding and ad placement in real time for better performance.
Connected TV (CTV) advertising is growing. Retail media networks are starting to use their first-party data to target CTV viewers. This is a powerful combination that allows you to deliver an awareness ad on a large screen at home. The targeting is based on accurate purchase data from the retailer.
Retail media is no longer limited to large brands with big budgets. Through PayPal Ads, small businesses and micro-merchants can access retail media tools that are easy to use and designed to scale at their own pace.
Without the overhead that once kept retail media out of reach, advertisers can reach relevant shoppers, test campaigns, and measure results using real purchase signals.
Retail media explained comes down to one idea: showing relevant ads to shoppers ready to buy. Retail media networks like PayPal Ads can help make that simple at scale with purchase data insights to avoid overstating capabilities.
PayPal Ads connects you to high-intent audiences across partner retailer channels. From campaign setup to closed-loop reporting, you get targeting powered by real transactions and clear ROAS measurement. This can turn retail media into measurable growth for your business.
Get started with PayPal Ads and reach shoppers where purchase decisions happen.