蘑菇AV

US retail media spend will reach $60.81 billion in 2025鈥攁dding roughly $29.2 billion in new ad dollars, more growth than Meta and Alphabet will see combined, according to 蘑菇AV鈥檚 forecasts. At the same time, 71% of advertisers now rank incrementality as the most important KPI for their retail media investments, an Association of National Advertisers (ANA) survey found.

Nearly half (45%) of advertisers plan to reduce overall ad spend due to financial constraints from tariffs, according to February 2025 data from the Interactive Advertising Bureau (IAB). Nearly three-quarters of advertisers expect ad budgets to shrink less than 10%. However, 22% believe ad budgets could decline by 11% to 20%. This will affect how much ad spend flows into retail media.

Retail media has evolved from ecommerce side hustle into a compelling opportunity to generate high-margin revenues. Retail media has captured the attention of multibrand retailers looking to offset ecommerce margin drains. Across the retail landscape, ecommerce sales penetration continues to inch up, following a major boost during the pandemic.

Ecommerce is gaining on search advertising. The convenience of ecommerce is challenging traditional search鈥檚 dominance, with retail giants like Amazon increasingly catering to B2B buyers. But standardization in measurement remains a challenge, and ecommerce platforms may not yet deliver the same level of returns as open web advertising.

Digital ad spend in Latin America is set to reach 56.4% of total ad spend in 2025, per 蘑菇AV鈥檚 forecast. As the region鈥檚 digital landscape matures, media quality, and performance are becoming top priorities for advertisers.

Escalating US tariffs on Chinese imports and the likely closure of the de minimis loophole could significantly impact social platforms like Meta and TikTok鈥攚hich rely heavily on ad dollars from fast-growing Chinese ecommerce companies such as Shein and Temu.

But on-site ad inventory is finite, and its worth to advertisers is inextricably tied to ecommerce traffic, which leaves most retailers at a disadvantage. Further adding to on-site woes, advertisers have begun to question the ROI of ads so close to the bottom of the purchase funnel. Retail media鈥檚 biggest players are maxing out their owned and operated surfaces.

Even an influx of new RMNs will not chip away at the share of ad spending allocated to the top two powerhouses. Amazon and Walmart combined will gobble up more than 84% of all retail media ad spending in 2025, representing a pervasive and unyielding dominance within the channel. The share of ad spending allocated to all other RMNs increased by less than 1 percentage point between 2019 and 2024.

Between the lines: As tariffs threaten ad budgets, it鈥檚 crucial for advertisers to prove the worth of their retail media campaigns. 94% of advertisers are concerned about the impact of tariffs on ad spending, according to a recent survey from the IAB.

The National Retail Federation (NRF)鈥檚 Big Show is happening in New York City this weekend, and will offer an opportunity for retail media networks (RMNs) to pitch themselves to advertisers. Even though retail media is huge鈥攅xceeding $62 billion in US ad spend this year per our forecast, most of those ad dollars will go to the biggest RMNs. The remaining players are vying over the same $8.58 billion that isn't scooped up by Amazon, Walmart, or Target.

The news: Temu鈥檚 foothold in the US is shrinking as the company pulls back sharply on advertising. Weekly sales slumped more than 25% YoY between May 11 and June 8, according to Bloomberg Second Measure. Our take: Given the importance of the US market to Temu and its merchants, it鈥檚 possible that its current pause on US ad spending and shift to Europe is a temporary effort to regroup as it searches for a business model more resistant to tariffs and the end of de minimis. At the same time, the longer the pause goes on, the more ground it will cede to Shein and other competitors鈥攁nd the harder it will be to regain market share.

While Argentina is opening its economy to foreign businesses, Brazil and Mexico are taking steps to curb the growing popularity of Asia-based ecommerce platforms like Shopee, AliExpress, Shein, and Temu. Argentina eliminated tariffs on international ecommerce purchases up to $400 for personal use and raised the tax-exempt purchase limit from $1,000 to $3,000 in December 2024.

Chinese ecommerce brands like Temu and Shein are already slashing US spend. Meanwhile, Reddit and Pinterest are gaining ground, fueled by AI tools, international growth, and ecommerce integrations. Streaming platforms are proving resilient as linear TV continues its decline.