Digital giants to retailers: The playbook for scaling ad revenue with onsite retail media

If traditional models do not work, what is the best way to succeed in the retail media business?

Traditional retailers are unlocking the power of retail media to revolutionise their business models and create new revenue streams. 

What Amazon pioneered has now become essential for forward-thinking retailers across Asia: transforming their websites and applications from mere shopping platforms into valuable advertising channels. Think of it as the digital equivalent of a brand paying for premium placement at eye level in a physical store, but on a retailer's website or app where consumers are already browsing and shopping.

This evolution comes at a critical time. As traditional retail margins shrink and online shopping grows, retailers must find innovative ways to maximise their digital assets. Retail media offers a high-margin revenue stream that leverages existing digital traffic and data insights behind the traffic without major operational changes. The opportunity is massive– the retail media industry is poised for significant growth in 2025, with Asia Pacific leading the charge at an estimated $97.8b revenue and 13.5% growth.

However, success is not guaranteed. Technology plays a critical role in whether an ad business thrives. Retailers who leverage their own customer information– first-party (1P) data and machine learning (ML) strategies, can reap higher returns, greater engagement and sales.

Unlocking retail media’s revenue potential
Retail media is proving a major revenue generator for retailers adopting cutting-edge ad technology.

South Korea’s leading beauty retailer CJ Olive Young surpassed its initial digital transformation goals by delivering more than double the expected return on advertising spend (ROAS). A beauty brand advertising on CJ Olive Young, discovered new customers and earned twice the return compared to their advertising campaigns on other beauty ecommerce platforms.

Online marketplaces, though traditionally not retailers, are also leveraging retail media. A leading food delivery platform in South Korea, Yogiyo, adopted an enterprise ML-driven ad solution to display real-time, hyper-relevant ads based on their user data. They saw a 94% increase in their advertising business and more than 95% advertiser retention rate, significantly improving ROAS.

For retailers of any size or category, the effective use of 1P data can create advertising opportunities–retailers earn new revenue, brands reach the right customers and shoppers discover products they are more likely to purchase.

Breaking free from legacy ad networks
Despite retail media’s potential, retailers may still depend on outdated advertising systems or networks that do not utilise technologies such as ML. Traditional ad networks act as intermediaries, promoting products on external sites rather than retailers' own platforms, reducing control over ad placement and performance.

Such traditional ad networks rely on fixed rules rather than adapting to real-time customer behaviours, resulting in less relevant ads which then fail to attract high-value shoppers.

Advertisers may see poor returns and reduce ad spend, making it harder for retailers to build a sustainable ad business. These ads also do not contribute to core Gross Merchandise Value (GMV) transactions.

Additionally, many of these traditional models take a big slice of the advertising revenue. Even when ads are being showcased on their own platforms, without smart targeting and automation, retailers often face a tough choice between showing more ads, which can annoy shoppers, or preserving a smoother shopping experience.

If traditional models do not work, what is the best way to succeed in the retail media business?

Lessons from digital giants
Retailers do not have to reinvent the wheel – Amazon, Walmart, and other digital giants have shown the way by using 1P data to create tailored shopping experiences. Wayfair, one of the world's largest online destinations for home goods, utilised its 22.4 million customers to deliver highly relevant product recommendations.

However, 1P data alone is not enough. A trusted technology partner is needed to fully leverage their 1P data. ML ensures that ads are always relevant and personalised. Amazon’s mastery of product recommendations illustrates this compound advantage in advertising.

Automation is also key. As retailers attract more advertisers, they need automation to scale without sacrificing performance.

From intelligent automation across operations to proactive alerts and recommendations for improvement and optimisation, ML allows advertisers to focus on performance and adapt to the changing market conditions. Yogiyo, for example, recruited over 25,000 advertisers within a month by offering a fully automated campaign environment powered by ML.

With this playbook in hand, where should retailers focus their advertising efforts to get the best results?

Why onsite advertising should be your priority
For growth-focused retail media, onsite ads are a top priority. Unlike offsite ads on third-party sites, onsite ads appear within a retailer's own digital platforms. A significant portion of Amazon’s ad revenue comes from onsite ads, which engage consumers at key shopping moments.

Onsite ads excel because they engage with high-value consumers at every touchpoint of the journey. They drive significantly higher ROAS than offsite placements, as retailers control their onsite data and align their advertising strategy with consumers’ shopping experience. They also offer a brand-safe, verifiable environment and native ad formats that align with brand values.

Another key advantage is the lack of media costs. Since retailers do not pay for external ad space, onsite ads can drive eight times more profits than offsite ad monetisation. According to a Boston Consulting Group study, onsite media margins can potentially reach 70% to 90%.

Retail media presents a huge revenue opportunity. But retailers must  take ownership of their ad businesses, investing in technology that enhances performance, profitability, and long-term growth.