The future of retail media: Balancing UX and ad revenue–why this balance matters. This blog explores how ad filtering is reshaping retail media, its role in omnichannel strategies, and why it’s essential for staying competitive in this rapidly evolving market.
The digital media landscape will continue its rapid evolution without pause in 2025.
With global ad spending expected to exceed $1 trillion this year, retail media has become the fastest-growing segment in the industry. While Amazon commands three-quarters of all retail media spend and Walmart claims another 7 percent, everyone else is fighting for the remaining slice of the pie, according to EMARKETER projections.
According to the Dentsu Global Ad Spend Forecast, digital advertising is projected to outpace all other media channels in 2025, with a 9.2 percent increase to $513 billion, accounting for 62.7 percent of global ad spend. Overall, retail media is expected to lead growth at 21.9 percent year-over-year, driven by advertisers leveraging valuable retailer consumer data and increasing investments in offsite advertising, including connected TV.
But unlike traditional publishers, retail media networks face a unique challenge: integrating advertisements seamlessly into the shopping experience without disrupting it. This delicate balance between user experience and generating ad revenue is crucial because it directly impacts customer satisfaction, loyalty and ultimately, the long-term success of both retailers and advertisers.
But without a doubt, those seeking consumer attention will continue to face an uphill battle.
The unique challenges of retail media
To thrive in an increasingly competitive landscape where value is paramount, retailers must differentiate themselves and invest in strategies that deliver unique value and cater to individual preferences across all touch points. For instance, retail media networks must consider embedding ads into the shopping journey to enhance the experience rather than disrupt it. The omnichannel advantage lies in the ability to deliver consistent and seamless ad experiences across all customer touchpoints – whether on the web, mobile or in person. By integrating advertising strategies across various channels, retailers can create a unified shopping journey that feels natural and personalized, rather than fragmented or intrusive.
Listening to the audience is also paramount – after all, there is increasing consumer demand for personalized and relevant ads. According to recent research, 89 percent of respondents agreed that there should be a limit to the number of ads they are exposed to online in return for access to free content, as well as restrictions on their level of disruptiveness. In a separate question, 89 percent of internet users surveyed also wish they had more control over the ads they see online when using the internet on their devices.
Despite these challenges in the retail media industry, optimism remains high among retailers and brands engaging in retail media. A significant majority – 88 percent of brands and 89 percent of retailers report that retail media had a strong or positive impact on their bottom line in the previous years. This confidence echoes a similar sentiment found in the traditional publishing industry.
What fuels this confidence and optimism? A key factor is the recognized value of their audience. Much like traditional publishers who understand the desirability of their readers, retail media also offers access to a highly desirable, valuable and purchase-ready audience. In fact, 79 percent of advertisers agree that “retail media spend is more effective in terms of sales than any other channel.”
Capturing and retaining attention is undoubtedly a key challenge, so what can retail media publishers do to stay ahead? It's simple: respect the user experience while delivering effective ads. And the key to achieving that delicate balance lies in embracing ad filtering.
Ad filtering versus ad blocking
Ad filtering is emerging as a game-changer in this space. If you’re unfamiliar with the term, ad filtering (unlike ad blocking), shows users nonintrusive advertisements that meet the Acceptable Ads Standard. With ad filtering, online users have control over their online experience while retailers (and publishers and advertisers) are compensated for their content. Enabling brands to engage users who typically block ads transforms how retailers connect with their audiences.
Filtered ads play a critical role in this approach by ensuring that advertisements are relevant and non-disruptive, enhancing rather than detracting from the customer experience. For example, a shopper might see a tailored ad on their device that aligns with products they browsed online or in-store, creating a cohesive narrative that drives engagement and conversions. This connected approach improves user satisfaction, meets their needs and maximizes engagement - therefore maximizing the effectiveness of the ads as well, making omnichannel strategies essential for retailers looking to stay competitive in the evolving retail media landscape.
And as mentioned in the paragraphs above on how internet audiences are a highly desirable target audience, well, ad-filtering users take this value to the next level. These users are tech-savvy, highly educated and often purchase decision-makers. They are more likely to engage with nonintrusive ads that respect their browsing preferences, offering retailers a unique opportunity to connect with an exclusive, high-value demographic. Read more about ad-filtering users.
By tapping into this audience, retailers can further enhance profitability while maintaining user trust and satisfaction.
Although some retailers might consider adblock circumvention (CV) as an alternative to ad filtering to regain lost ad revenue, this approach is increasingly proving ineffective and unsustainable.
Circumvention tactics often lead to significant negative user experience issues, as attempts to reinsert ads typically draw more attention to the ad-blocking community, resulting in additional blocking filters and escalating the arms race between retailers and ad blockers. This "cat and mouse" dynamic is not only resource-intensive but also inefficient, requiring constant updates and manual efforts to keep up with evolving circumvention strategies for minimal results.
Maintaining developer resources focused on CV can be costly for retailers, often exceeding the benefits gained. A more effective and sustainable solution lies in collaborating with ad-filtering providers.
By working together, retailers can deliver effective, nonintrusive, user-friendly ads that respect consumer preferences while maintaining revenue streams—avoiding the pitfalls of circumvention altogether.
Retailers must adopt innovative strategies such as ad filtering to stay competitive today – so why not take the extra help? Ad filtering is transforming the retail media landscape by providing a way to balance user experience with ad revenue, ultimately leading to more effective and engaging advertising experiences. This balance is important because it ensures sustainable growth and long-term customer loyalty.
Ad filtering can enhance the shopping journey - making ads more engaging and less intrusive – all in all giving users what they want while setting you up with long-term revenue growth.
Learn more about ad filtering.
