Retail Media: How Much Can You Earn?

Now the world’s fastest-growing ad format, worldwide spend on retail media advertising will hit $140 billion in 2024, according to eMarketer. That’s up 21.8% year on year, and it’s only going to get bigger. 

Major players like Amazon still obtain a large portion of the world’s retail media revenue. Nevertheless, as the demand for the format scales up, there is plenty of capacity for more retailers to enter the field. 

If you’re looking at retail media as a potential new revenue stream, you’re probably wondering how much you can earn. Well, you’re in luck, as that’s what we’ll be discussing today. 

What is retail media?

Retail media spend is now in the multiple billions, but analysts like eMarketer track lots of different formats when assessing the market.

We’re talking about everything from eCommerce display advertising to in-store promotions. If you’re looking for a clear definition, the Internet Advertising Bureau offers a very straightforward summary of what retail media is:

“The digital advertising space, retail data assets and in-store opportunities a retailer or marketplace owns, which is then made available to brands for the execution of advertising campaigns.”

How do you monetise retail media?

If you’re a retailer looking to partner up with advertisers, there are several retail media monetisation options you can look into. 

Broadly speaking, you can either charge a fixed fee for a certain amount of coverage or receive a commission each time a customer interacts with an advertiser’s inventory.

On the latter, there are two main ways of monetising your retail media:

Cost Per Mille (CPM)

The cost per thousand impressions (views) your advertisement generates.

Cost Per Acquisition (CPA)

The commission you receive each time you refer a customer to an advertiser. In most cases, a customer will either complete a sale at the advertiser’s site or sign up for their service, which triggers the commission. A CPA can either be a fixed amount or a percentage of the transaction value.

How much revenue can I make through retail media?

Some say this is the golden question.

Retail media earnings rest on a long list of factors. Here are some of the main drivers of revenue:

What do you sell?

If you earn on a CPA, your customers must complete an action with an advertiser before you start earning money. The question is, how likely are they to do it?

Low-cost retailers have customers who hop onto their site, load up on cheap goods, and hop off. Are they really the best audience to target with extra offers?

Conversely, I could sell something with a much longer consideration period, like a kitchen appliance. If my customers wait months to find the right product, they might welcome offers on extra services to make the most of it.  

That brings us nicely onto our next factor.

Are the rewards relevant to your customers?

Relevance is the fuel of effective retail media. Thankfully, it’s an easy factor to get right.

If all the customers buying my kitchen appliances receive advertisements for digital streaming services, it might be difficult to generate revenue. Why? Because the advertisement doesn’t have anything to do with the purchase. Instead, I should find advertisers that sell products or services related to the customer’s interests. 

For an example of how this works, read how BrandSwap drove thousands of high-quality customers to recipe box subscription service SimplyCook through relevant partnerships. 

Are you offering customers a free gift?

Customers love getting value for their money. If your retail media efforts involve some kind of free gift, you can drastically increase your retail media earning potential.

There’s a great example in the world of fast-moving consumer goods (FMCG), where subscription-based businesses offer a free trial of their service. This strategy has its own name – ‘gift with purchase’ (GWP) – and is very common in the retail media world. 

Are you earning through a CPM or CPA?

Naturally, charging a CPA gives you a greater earning potential per transaction. Let’s say I’m advertising car rentals to customers who have recently purchased an airline ticket. By charging a 10% CPA each time one of these customers rents a car, I could generate hundreds of dollars for every customer I refer. 

That said, the CPM model greatly benefits websites with lots of traffic. If I attract 500,000 visitors per week and can guarantee a return for every thousand impressions, retail media can become a key source of revenue. If I only attract 500 visits per week, the CPM model is simply not viable. 

There are many more factors than these at play. However, benchmarks for CPM and CPA can provide a rough idea of how much you can earn with your own retail media campaigns.

Retail media benchmarks (CPA)

When we talk about monetising retail media via a CPA, our revenue is heavily influenced by the advertisers we promote. 

Indeed, judging by analysis conducted in March 2024 from SellerApp, there is a direct correlation between the cost of products sold by advertisers and the CPA.