Retail media is increasingly positioning itself as one of the fastest-growing channels in digital advertising, but a new analysis by WARC Media warns that its full potential is still not being realized – primarily due to an overreliance on ROAS (return on ad spend) as the core success metric.
In the report titled ‘Retail Media Radar: Ending the ROAS reliance,’ WARC points out that although interest in retail media and investment in the channel continue to grow, there is a significant need for greater strategic and analytical maturity. Otherwise, brands risk inefficient budget allocation and missed opportunities in higher-ROI channels.
Why ROAS Isn’t Enough
ROAS has become the ‘go-to’ metric in retail media strategies because it offers a quick, quantifiable snapshot of campaign performance. However, the problem lies in its limitations – in most cases, it’s measured within individual platforms and fails to reflect the broader advertising context.
This kind of measurement tends to overvalue channels that sit close to the point of purchase (e.g., sponsored products), while overlooking the influence of those that operate earlier in the customer journey, such as branding, video advertising, or social media. The result: a distorted view of effectiveness and misallocated budgets.
Market Context
Retail media is currently in a phase of expansion. WARC estimates that global ad spend in this channel will reach $176.2 billion by 2025 (up from $154 billion in 2024). At the same time, the number of retail media networks (RMNs) is growing – with estimates suggesting there are now over 275 active networks globally.
Advertisers are especially drawn to the ability to target using retailers’ first-party data, which provides access to a large base of consumers already in the consideration or purchase phase.
The Risk of Diminishing Returns
Despite the impressive numbers often shown by ROAS, research – such as that conducted by Analytic Partners – indicates that retail media is not among the highest-performing channels when measured holistically. According to the findings, as many as 60% of brands should either maintain or reduce their retail media spend and consider reallocating budgets to higher-ROI channels.
A Broader View Brings Deeper Insights
E-commerce analytics firm Fospha found that 42% of DTC brand sales on Amazon were influenced by other channels – something the ROAS metric simply doesn’t register. Similarly, Criteo showed that sponsored product campaigns create a ‘halo effect’ that results in a 39% increase in revenue across the brand’s entire portfolio – another impact that ROAS fails to capture.
What’s Next?
Instead of relying on a single metric, WARC recommends that brands build a so-called measurement stack – an integrated measurement system that captures the full effects of advertising across different stages and channels. This includes metrics such as brand lift, incremental sales, cross-channel attribution, and the long-term impact on customer lifetime value.
The report concludes that retail media is not a standalone system – it is part of a broader media mix. Recognizing that interdependence and accurately measuring its real impact are essential steps for brands aiming to build sustainable and effective retail strategies in an increasingly complex digital environment.
