The first and perhaps only rule of the Internet is that on a long enough timeline, everything becomes an ad network. The old adage about Amazon was that it’s a search engine with a warehouse attached.

Today, it’s an advertising exchange masquerading as a marketplace.  

If time proves media theorist and oft-referenced Canadian philosopher Marshall McLuhan right about the whole “the medium is the message” thing, Commerce will become the dominant distribution channel for advertising is the logical endgame of American capitalism.

For now, it’s simply called retail media.

If AdWords was the best business model ever conceived, retail media is a close second. An industry that has long had to deal with the slog of moving low-margin physical goods now gets to sell sponsored squares at 90%+ gross margin. In just a decade, Amazon and its brethren have built a $100B media business that requires basically no media production.  

But if retail media is to continue growing at a 20% CAGR, it’s going to have to honor the media side of its moniker. Retailers can choose to continue eating media companies or to actually embrace being media companies. This essay is a plea to opt for the latter path. 

From Shelves to Screens: Retail Media’s Takeover

Broadly speaking, two things will be true about retail media in 2025:

1. It’s going to get a hell of a lot bigger as brands chase predictable performance
2. The novelty will wear off, and the channel will face existential questions from brands about incrementality—the ability to drive meaningful incremental growth over time

As it stands today, retail media is rapidly replacing programmatic ad spend as the “nobody got fired for buying IBM” channel for agencies and Fortune 1000 marketers to park the slush pile of unallocated ad dollars that have yet to be promised to Meta or Google. For now, there’s plenty of slush still up for grabs. 

While the programmatic advertising industrial complex was good at driving predictable reach and placements in publications that a company’s CEO hopefully reads, retail media networks put up gaudy performance numbers, even if they are largely inflated by brands reaching customers who were set to buy from them anyway.

In the short term, this is all well and good for Amazon, Walmart, Targe, and friends— no marketing leader will turn away from a channel that can drive myopic returns. However, in the medium and long term, retail media is on a lightning path to becoming a massive commodity due to its gargantuan mid-funnel problem: While retail media networks can monetize lower funnel search demand and place top of funnel (read: dumb scale) display ads across the web via audience extensions, most lack access to any inventory that actually educates a prospective customer on a product or service.

To educate shoppers requires actually becoming a media operation that invests in content.

The convergence of “content and commerce,” teased by pundits for a decade, will rapidly accelerate next year. However, the action won’t come from publishers launching successful commerce arms; it will come from retailers primarily buying their way into the content business to bolster their advertising networks.

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Hodinkee, a media brand covering luxury watches and their associated lifestyles, effectively embodies this full-circle-of-life.

The company bought watch reseller Crown & Caliber three years ago to extend its content empire to commerce. Ultimately, Hodinkee wound down its commerce program, refocused on creating the best possible content, and announced a sale to British retailer Watches of Switzerland.

Content is King, Context is Queen

Zooming out, there’s a fascinating paradox at play right now. In the wake of Google’s “helpful” content updates, which have callously slashed traffic to websites that monetize via affiliate links, high-quality product reviews and recommendations have less value than ever as standalone businesses. But as part of a retail media ecosystem or even as training data for new GenAI experiences that retailers want to launch, the best content is king. That’s a recipe for strategic M&A.

There’s some precedent for deals here. Earlier this year, I wrote that Best Buy should acquire CNET and took a small victory lap when the companies announced a major partnership that disappointingly stopped short of an acquisition. We’ll see bolder deals in the quarters ahead.

I’ll call one shot in particular: After former Barstool exec Erika Ayers ushers in a vibes-and-content-renaissance at Food52, The Chernin Group will sell the bump as Instacart buys the publisher outright after running up against scale limitations with its New York Times recipe partnership.

Overall, retailers' most valuable media assets will be those who painstakingly and meticulously review products, not those that prosper off of keyword arbitrage schemes. If I were on a large retailer's growth team, I’d be mining the depths of independent niche media websites to find publishers who excel at writing unbiased commerce editorial but have been unfairly crushed by Google’s abject lack of media literacy. 

If the endgame of retail media is just to extract a few more bucks from brand partners via co-op campaigns, buying or building full in-house media operations is a bit much. But I hope we’ve just scratched the surface of what retail media can be. Ultimately, the end game should be using the physical store as far more of an immersive media interface for conveying information about products…which will require much content. In ten years, rent will go from being the new CAC to being the new supply side cost for ads.

In modern commerce, the role of a physical store is to add context to a disparate series of widgets. And what is an entity that adds context around a seemingly disparate data series?

That, my dear reader, is the fundamental definition of a media business.

The Digital Agora

When media folks feel sentimental, they often toss out the Arthur Miller quip that a good newspaper is a “nation talking to itself.” I’d argue that your local farmer’s market or superstore has an even better claim to that title. Before it became the most cliche name for retail SaaS startups, the Agora in ancient Athens was both the center of commerce and information exchange in ancient Greek society.

Democracy was quite literally born in a bazaar.    

You can see the natural bond between media and commerce most clearly in the revival of digital-first local news projects that look less like a conventional newspaper and more like a church-bulletin-meets-supermarket-circular. Naptown Scoop is my personal favorite in this genre—it’s a thriving, profitable local news outlet in Annapolis that feels like it was written from the point of view of the town general store.

Unfortunately, as it currently stands, the rise of retail media is yet another threat to the business model of American journalism. Procter and Gamble are under no civic obligation to buy shitty display ads from legacy publishers that don’t convert in the nebulous service of the fourth estate. If there’s more money to be made working with Amazon Ads or Walmart Connect, that’s where they owe it to their shareholders to invest.

But consider this: The biggest losers in retail media’s rise are large open web publishers, which relied largely on display ad dollars from large CPG brands (however flawed that business model was). When Buzzfeed won these ad deals, it funded an entire investigative journalism outfit that conducted a four-year investigation into the fate of millions of American children placed in orphanages over several decades.

Let’s hope retailers do more than Jeff Bezos did when their money pile doubles: buy a bigger boat.