Retail media to surpass TV ad spend by 2026, report

The global retail media market is approaching the USD 200 billion mark, but its rapid expansion phase appears to be slowing as sponsored search gives way to display and off-site formats.

According to WARC Media’s Future of Commerce Media 2025 report, retail media ad investment is expected to reach USD 174.9 billion in 2025 — up 13.7 percent year on year — before rising another 12.4 percent in 2026 to USD 196.7 billion.

While retail media continues to outpace overall digital ad growth, WARC notes that annual expansion is moderating, with growth forecast to drop to 11.6 percent by 2027. The shift signals a maturing market in which retailers must evolve into full-funnel media platforms integrating display, off-site, and omnichannel capabilities.

From search to full-funnel media

Alex Brownsell, Head of Content, WARC Media: “Retail media has evolved from a US and China-driven trend into a global phenomenon, with European spend now growing at double the rate of the broader digital advertising market. As the sector expands beyond traditional sponsored search into visual display, audio, social, and television partnerships, it has never been more important for advertisers to have clarity on the scale and the suitability of the commerce media opportunity.”

The report forecasts that retail media investment will overtake combined linear and connected TV spend in 2026. However, growth among endemic brands — those selling directly through a retailer — is decelerating, while sectors such as technology and electronics are expected to contribute USD 32.2 billion in global ad spend next year, up 15.4 percent.

Display and off-site formats lead next wave

Display and off-site advertising are emerging as key growth areas. In the first half of 2025, UK advertisers increased spending on display retail media by 41.6 percent year on year, compared with 35.6 percent for search-based placements. Quick-commerce platforms, particularly in Asia, are another source of expansion, with Instacart, Uber, Delivery Hero, and DoorDash each generating ad revenues exceeding USD 1 billion annually.

James McDonald, Director of Data, Intelligence & Forecasting, WARC: “Retail media is rapidly evolving from a lower-funnel, search-dominated channel into a full-funnel proposition. Display currently represents less than 30 percent of on-site retail media spend, but this balance is set to shift as retail media becomes more integrated with brand digital budgets. Much may depend on the adoption of agentic AI, which threatens the high human traffic volumes that have monetised retail media networks to date.”

Amazon deepens dominance in commerce media

Amazon remains the world’s largest commerce media seller, reporting 15 percent annual growth through expanded demand-side-platform (DSP) partnerships with Roku, Disney, Netflix, Spotify, and Microsoft. The company now reaches over 300 million ad-supported users monthly in the US, while its UK DSP covers eight in ten households. Research from Skai shows that more than 20 percent of Amazon ad investment now flows through its DSP — double the share recorded two years ago.

Agentic AI reshapes commerce strategy

Agentic AI — autonomous systems that shop and transact on behalf of consumers — is emerging as a disruptive force. Edgar, Dunn & Company estimates the total addressable market at USD 136 billion in 2025, rising to a potential USD 1.7 trillion by 2030.

WARC advises marketers to adopt measured “test and learn” approaches, ensuring agentic tools address real consumer needs rather than becoming technology-led experiments. Evaluating results holistically will be essential, as metrics such as return on ad spend may not fully capture the combined impact of creativity, brand equity, and seasonal factors in AI-driven commerce.