Retail media budgeting comes down to three decisions: how much to spend in total, where that money goes across retailers and ad formats, and what evidence lets you move it. Most brands get the first one wrong by treating retail media as a leftover from trade or search. The best budgets start with a business goal, set guardrails across funding sources, and get reallocated on incremental results rather than platform-reported ROAS.
This guide walks through each decision with the benchmarks that exist, the traps that cost brands money, and a simple process you can run this quarter.
TL;DR
- Retail media is a media budget, not a trade budget. Define which dollars fund it before you set a number.
- Set the ambition from brand goals (velocity, share, profit), then build funding and spending guardrails around it.
- Put most dollars in your few strongest networks, keep a short list of secondary ones, and split by ad product and funnel stage.
- Judge networks on incrementality, not just retailer-reported ROAS, and reallocate on a fixed cadence.
- Rules like 70/20/10 are starting points for testing, not retail media benchmarks.
What belongs in a retail media budget
Start with a clean definition, because budgets fail when the line item is fuzzy. The IAB’s February 2026 framework describes retail media as paid, planned and measured influence funded through brand, marketing or media budgets. That covers sponsored products, retailer-enabled off-site media, paid digital in-store screens and audience insights.
In practice, a brand’s retail media line usually holds:
- On-site ads: sponsored products, sponsored brands and display on the retailer’s own pages and search results.
- Off-site media: programmatic, social, connected TV and email that use the retailer’s first-party audiences.
- Measurement and data: audience insights and any third-party measurement you pay for.
Bain’s analysis found that about 85% of retail media dollars go to on-platform inventory, so on-site ads are usually the bulk of the line.
How it differs from trade spend
The same IAB paper draws the key line. Trade changes transaction economics: price reductions, BOGOs, coupons or commercial terms. It is funded through COGS, margin or trade agreements, not a discretionary media budget.
That difference matters when a retailer’s account team bundles an ad commitment into a joint business plan. If the ad dollars come out of trade, they are already spoken for, and you should hold them to media standards of proof. Brands that also manage event and activation spend out of the same marketing pool can see how hidden costs get planned for in trade show spend planning. The principle carries over: name every line before it can surprise you.
For a deeper look at who owns the money inside a company, see our post on retail media versus brand media.
Step 1: Set the total from goals, not from last year
The most common method is to copy last year’s number and add 10% or 20%. It is easy to defend and easy to get wrong. A better sequence:
- Choose the objective. SKU velocity, sell-through, distribution gains, topline revenue, ROAS and profit each call for different investment levels and different measurement. A brand defending share in a mature category should not budget like one launching a new line.
- Read the retailer’s sales plan. Look at where distribution is expanding or shrinking at each retailer. Spend follows shelf presence and in-stock rates.
- Map to the promotional calendar. Tie retail tactics to the events you already plan, so ads support the weeks when price, display and demand line up.
- Put it in annual planning. The advice from Collective Measures is to include retail media in annual planning, assess retailer sales plans and distribution changes, and base investment on brand goals.
Bain’s perspective adds a useful twist. Set the retail media ambition first, then create funding models and spending guardrails across trade, national media and shopper marketing, instead of managing retail media as an isolated channel.
A worked example
Imagine a home goods brand with 40% of revenue on Amazon, 25% on Walmart and 15% on its own Shopify site. The goal for the year is profitable share gain on two hero SKUs. The team would:
- Set the retail media ambition by hero-SKU sales targets, not by a percentage of total marketing.
- Fund it partly from reallocated national media and partly from a trade reduction that the retailer agrees is non-essential.
- Set a margin floor: no campaign scales if contribution margin after ad cost falls below it.
The numbers here are illustrative, not benchmarks. The structure is what you copy.
What the benchmarks say, and how to use them
Benchmarks tell you the direction of travel. They do not tell you your number.
- Market size: Nielsen reported in June 2025 that US retail media spending was expected to reach $60 billion in 2025 and $100 billion by 2028, with 20% growth in 2025 against 4.3% for the total ad market.
- Share of digital: Bain put the baseline at 17% of digital marketing spend, and projected it could reach 30% within two to three years and 50% by 2030.
- Advertiser intent: In a Bain survey of hundreds of US CPG companies, nearly half expected to consolidate retail media spending, and brands expected to advertise on about six platforms on average.
If your share is below the market baseline, ask why. It may be right for your category, or it may mean you are underfunding the place where shoppers actually buy. If it is far above, check that your measurement is good enough to justify it.
Step 2: Split the budget across networks
Bain reports that most CPG companies put most of their dollars in the top five networks and make moderate investments in a targeted list of three to five others. That pattern is a sensible default for mid-market and enterprise brands too.
To rank networks, use the criteria Bain recommends: revenue, site visits, differentiated audiences, measurement capability, self-service functionality and your own brand’s standing on the platform. Then:
- Anchor networks: the one to three where most of your category’s sales happen. For many physical-product brands that means Amazon and Walmart.
- Secondary networks: a short list where you test, with a hard cap on spend until measurement says otherwise.
- Watch list: networks you review each quarter but do not fund yet.
For channel-by-channel mechanics, our guides on how to manage ad spend across Amazon, Walmart and Shopify and on ad spend allocation for multi-channel e-commerce go deeper. If Walmart is a growing share of your plan, our Walmart DSP strategy shows how to run it across the funnel.
Step 3: Split by ad product and funnel stage
Within a network, the mix matters as much as the total. A 2024 study in the Journal of Marketing Analytics calculated optimal Amazon ad-product allocations by funnel metric and brand size. Its finding: the best mix differs by brand size, objective and category. There is no universal split.
For context, Nielsen’s global analysis of Amazon ad spending found average budget shares of 40% sponsored products, 24% sponsored brands, 20% display and 16% video, with variation by country and vertical. Treat that as a reference point, not a target.
A practical way to build the mix:
- Capture demand (lower funnel): sponsored products and branded search protect the sales you have already earned. Fund these first, and fund them enough to defend your brand terms.
- Create demand (mid and upper funnel): sponsored brands, display, video and off-site media reach new shoppers. These are harder to prove and easier to cut, which is why they need a protected test budget.
- Re-engage: retargeting and lifecycle media bring back people who browsed or bought.
If you run Amazon, sponsored ads management is where most of this mix is set. For off-Amazon, see how Walmart Connect advertising fits the picture.
Does the 70/20/10 rule work for retail media?
People often search for it, so here is a straight answer. 70/20/10 is a general marketing heuristic: roughly 70% on proven activity, 20% on emerging opportunities and 10% on experiments. We have not found a retail media benchmark that says brands should split spend this way, and no checked source we cite supports it as a norm.
Use it only as a discipline for your own plan. For example, you might hold about 70% of retail media in proven anchor-network campaigns, 20% in scaling promising formats, and 10% in tests of new networks or off-site audiences. The ratio is yours to adjust, and the Journal of Marketing Analytics finding above is a reminder that the right split depends on brand size and objective.
Step 4: Measure before you move money
Budget moves are only as good as the measurement behind them. Retailer dashboards report ROAS using each network’s own attribution rules, so two networks that both claim a 5x return may not be comparable.
The industry knows this. eMarketer reported that 71% of advertisers called incrementality the most important retail media KPI in an ANA survey from January 2024. It also reported that the number of networks offering media-mix modeling access rose 50% between Q1 and Q3 2024.
A workable measurement stack for a mid-market or enterprise brand:
- Platform reporting for daily optimization: ACoS, ROAS, orders.
- Incrementality tests (geo holdouts, ghost bids or on/off tests) to learn what the ads actually caused.
- Marketing efficiency and contribution margin at the brand level, so ad spend is judged against profit.
- Unified reporting across retailers, so you compare like with like.
Our advertising and incrementality analytics page explains how we approach this on iDerive.
Step 5: Know when to reallocate
Reallocation fails when it is either constant or never. Set rules in advance.
- Review cadence. Weekly for bids and budgets inside campaigns, monthly for ad-product mix, quarterly for network allocation.
- Triggers. For example: a campaign misses its margin floor for three consecutive weeks, an in-stock rate drops below your threshold, or an incrementality test shows low lift.
- Move in steps. Shift a fixed share, such as a tenth of a line, then measure before shifting again.
- Protect the long term. Bain says leading CPG companies extend retail media objectives beyond ROAS and conversion into brand-building, tracking metrics like retailer share of search, purchase frequency and brand engagement. Keep a slice of budget accountable to those metrics so short-term efficiency does not starve future demand.
- Fix the basics first. Ads sent to a weak listing or an out-of-stock item waste money. Content, pricing and inventory belong in the budget conversation.
Common budgeting mistakes
Funding by percentage of sales alone
A fixed percentage ignores whether a retailer is growing, whether you are gaining distribution and whether the category is competitive. Use it as a sanity check, not the method.
Judging by the cheapest media
Cheaper impressions do not guarantee better returns. Allocation decisions usually matter more than CPM alone.
Spreading too thin
Six networks with tiny budgets gives you six sets of noisy data. Concentrate, then expand once you can read results.
Letting trade and media negotiate separately
If the retailer sees two budgets that never talk, it will happily sell the same objective twice. One owner, one plan, one scorecard.
Our perspective
We manage retail media for brands that already sell at scale, and the pattern is consistent. The budgets that perform are built profit-first: margin and contribution targets are set before the first bid, and every campaign has to earn its place against them.
We also see brands underinvest in two places. The first is creative: sponsored ads and product pages convert on images, video and A+ content, so a budget that funds clicks but not the content they land on leaks money. The second is unified data. When Amazon, Walmart and a Shopify store each report in their own language, leaders argue about numbers instead of deciding. That is why we built iDerive to bring marketplace data together and turn it into plain business answers.
Our advice: pick a small number of anchor networks, protect a test budget, measure incrementality on a schedule, and write down your reallocation rules before you need them.
— Dan Katona
Get help building the plan
If you want a second set of eyes on your allocation, our team runs retail media advertising across Amazon, Walmart and other networks, backed by in-house creative and iDerive reporting. Talk to Nectar about an audit of where your retail media dollars go today.
FAQ
How much of my marketing budget should go to retail media?
There is no single right share. Bain’s baseline analysis put retail media at 17% of digital marketing spend and projected growth beyond that. Your number should come from brand goals, retailer sales plans and measured incrementality, not from an industry average.
Is retail media a trade budget or a marketing budget?
It is a media budget. The IAB’s 2026 framework separates retail media, funded from brand, marketing or media budgets, from trade, which is funded through COGS, margin or trade agreements and changes price or terms. Agreeing which pool pays for what avoids double counting.
How many retail media networks should a brand advertise on?
Bain’s survey found brands expected to be on about six platforms on average. Most CPG companies put the majority of dollars in the top five and keep three to five others at moderate levels. Start with your one to three anchor networks and add others as measurement allows.
How often should I reallocate retail media spend?
Adjust bids and campaign budgets weekly, review ad-product mix monthly and revisit network allocation quarterly. Use pre-set triggers, such as a margin floor or a weak incrementality result, so moves are driven by evidence.
Sources
- IAB: The Convergence and Coexistence of Trade and Media (February 2026)
- Bain: From Revolution to Evolution in retail media for consumer goods
- Collective Measures: Maximizing Retail Media (2024)
- Nielsen: The future of retail media (June 2025)
- Journal of Marketing Analytics: Data-driven budget allocation of retail media
- eMarketer: Retail media networks and incrementality
- Trade show booth design budgeting
Recommended
.png)
