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The market is expanding quickly but is not one clean, universally measured category. IAB/PwC estimated total U.S. digital advertising revenue at $294.6 billion in 2025, while its commerce-media category reached $63.4 billion. Those totals use different scopes, and commerce-media formats can overlap with search, display and video.
How big is U.S. e-commerce and commerce-media advertising?
IAB/PwC’s 2026 report estimated U.S. digital advertising revenue at $294.6 billion in 2025, a 13.9% year-over-year increase. Within the report’s category framework, U.S. commerce media generated $63.4 billion, up 18.0%.
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These are industry estimates, not audited national accounts. IAB says PwC compiles information reported by ad sellers and public-company data, does not audit the underlying submissions and publishes aggregate results. The figures therefore provide a market-scale indicator rather than a reconciled ledger of every advertising transaction.
| U.S. advertising measure | 2025 revenue | Year-over-year change | How to read it |
|---|---|---|---|
| Total digital advertising | $294.6 billion | 13.9% | IAB/PwC aggregate estimate for the U.S. |
| Commerce media | $63.4 billion | 18.0% | IAB category covering commerce-linked media; categories may overlap |
| Social | $117.7 billion | Not stated | IAB/PwC category; not necessarily separate from other format or commerce classifications |
| Search | $114.2 billion | Not stated | IAB/PwC category; can overlap with commerce context |
| Digital video | $78 billion | Not stated | Format category that can appear inside other buying contexts |
| Display | $81.6 billion | Not stated | Format category, not a mutually exclusive market slice |
| Podcast | $2.9 billion | Not stated | IAB/PwC category |
Do not add those rows as if they were non-overlapping pieces of the $294.6 billion total. “Video,” for example, describes a format, while “commerce media” describes a commerce, data or buying context. The same impression can be classified through more than one lens.
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IAB’s commentary describes commerce media as a maturing channel. Growth is slowing from its earlier pace as advertisers confront fragmented supply, inconsistent standards and rising costs. Retailer-owned data and proximity to a transaction remain attractive because they can support closed-loop reporting and coordination with other retailer buys. The practical implication is not that commerce media is collapsing; it is that buyers increasingly have to prove what incremental value they receive.
David Cohen, CEO of IAB, characterized the shift this way: “This revenue growth reflects a market that has reoriented around performance channels. As expectations for measurable outcomes rise, investment is concentrating in areas that can directly correlate spend to business results.” IAB’s SVP of Research & Insights, Jack Koch, added that the ability to integrate data, media and commerce is becoming a defining advantage.
How big is Amazon’s advertising business?
EMARKETER reported that Amazon’s advertising revenue reached $21.3 billion in the fourth quarter of 2025, up 23% year over year. That is a reported quarterly result, not a full-year U.S. total.
For the U.S. specifically, EMARKETER forecast $56.71 billion in Amazon advertising revenue for 2026. A forecast is an estimate of a future period, so it should not be presented as revenue already earned or as an audited result.
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In EMARKETER’s 2025 U.S. retail-media comparison, Amazon held an estimated 79.7% share. Walmart Connect was estimated at 8.0% and Target Roundel at 1.5%. Those percentages describe retail media, not all digital advertising, and they are estimates for that market scope and year.
| Measure | Figure | Period and qualification |
|---|---|---|
| Amazon advertising revenue | $21.3 billion | Q4 2025 reported revenue; EMARKETER, up 23% year over year |
| Amazon U.S. advertising revenue | $56.71 billion | EMARKETER forecast for 2026, not a reported result |
| Amazon U.S. retail-media share | 79.7% | EMARKETER estimate for 2025 retail media |
| Walmart Connect U.S. retail-media share | 8.0% | EMARKETER estimate for 2025 retail media |
| Target Roundel U.S. retail-media share | 1.5% | EMARKETER estimate for 2025 retail media |
| Amazon and Walmart share of incremental U.S. retail-media spending | 89% | EMARKETER forecast for 2026 incremental spending |
The 89% forecast concerns incremental spending in 2026. It signals concentration of new dollars, not that smaller networks have no useful audiences or that Amazon will receive 89% of all retail-media spending.
Why does Amazon dominate retail media?
Marketplace inventory close to a shopping decision
Sponsored Products and related marketplace placements appear where people search, browse and compare products. The ad is adjacent to a commercial action, so the advertiser can connect an impression or click with downstream marketplace events more directly than it often can on a general-audience channel. Close proximity does not prove that the ad caused the purchase; it makes the transaction easier to observe.
First-party purchase signals
Amazon operates the retail environment in which many ad interactions and purchases occur. That gives its advertising business access to purchase and browsing signals generated within its services, subject to its policies and the permissions and controls applicable to each product. EMARKETER identifies this retail purchase data as a central advantage in Amazon’s positioning. “Unmatched purchase data” is an analyst or platform characterization, not an independently measured comparative finding.
Reach beyond the product page
Amazon’s proposition now extends from lower-funnel marketplace ads to streaming and other media inventory. EMARKETER describes streaming inventory, including advertising on Prime Video, as a way to reach audiences higher in the funnel while retaining a connection to retail audiences. A streaming impression can build awareness, but its path to a later purchase is less direct than a sponsored result on a product-search page.
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EMARKETER also points to campaign-management and AI-assisted capabilities. These tools are intended to let marketers plan, activate and optimize campaigns across Amazon surfaces. The existence of a unified interface can reduce workflow friction, but the cited material does not establish independent, causal performance gains from those tools.
What are the types of retail-media ads?
EMARKETER’s 2026 FAQ groups retail-media advertising into four common formats. Each solves a different reach, intent and measurement problem.
| Format | Where it appears | Typical role | Questions to ask |
|---|---|---|---|
| On-site search | Sponsored product listings in a retailer’s website or app search results | Capture demand close to purchase intent | Are bids competing for high-intent queries? What attribution window is used? |
| On-site display | Banners, video and product carousels on retailer-owned properties | Merchandising, consideration and cross-selling | How much placement is available, and how are view-through actions counted? |
| Off-site | Retailer-data-powered ads on social, connected TV or the open web | Extend retailer audiences beyond the store | What data can be activated, and can exposure be deduplicated across channels? |
| In-store | Digital screens, audio and other physical-store advertising | Influence shoppers near or during a store visit | How are offline exposures matched to sales, and what is the incrementality test? |
How should marketers compare retail-media networks?
A network should not be selected on audience size or reported return on ad spend alone. Compare the operating model across these dimensions:
- Audience reach: How many relevant shoppers can the network reach, and how much overlap exists with other retailers and media channels?
- Purchase intent: Search placements usually sit nearer to an active product decision than broad off-site or streaming inventory. That can improve conversion efficiency while limiting incremental reach.
- Placement: Separate on-site, off-site and in-store inventory. They involve different creative requirements, buying mechanics and exposure controls.
- Data access: Confirm which audience attributes, segments and event-level reports are available. Retailers may restrict raw data, require clean-room workflows or provide only aggregated outputs.
- Closed-loop attribution: Determine whether sales can be tied to ad exposure, what attribution window is applied and whether returns, cancellations and repeat purchases are handled consistently.
- Incrementality: Ask whether the network supports holdouts, geographic tests or other methods that estimate sales caused by advertising rather than sales that would have happened anyway.
- Reporting consistency: Retailer definitions for impressions, clicks, conversions and attributed revenue vary. A dashboard total is not automatically comparable with another network’s total.
- Operational overhead: Separate retailer interfaces can require different catalogs, creative specifications, billing processes and optimization routines.
EMARKETER notes that retailer formats, buying interfaces, attribution windows and measurement methods differ, while data access can be limited. IAB has called for better standardization and interoperability. Until those changes are widespread, a finance or marketing team should document each network’s definitions before combining results in one return-on-investment report.
What campaign tools and measurement capabilities is Amazon promoting?
Amazon’s June 2026 materials present its platform as a combination of retail purchase data, media inventory and campaign management. The company also discussed an IDC white paper that emphasizes real-time performance tracking, closed-loop attribution, standardized reporting and capabilities spanning technology, media sales and measurement.
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That IDC work was sponsored by Amazon and discussed in Amazon-published coverage. It is useful for understanding Amazon’s pitch to advertisers, but sponsorship means it should not be treated as neutral proof that the tools deliver a particular lift. The available sources do not provide independently comparable campaign-return or causal-effect results across all retail-media platforms.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What challenges do marketers face with retail-media networks?
Fragmented measurement
Each retailer can define a conversion, attribution window and reporting field differently. A seven-day click window, a one-day view window and a platform-specific treatment of repeat orders can produce materially different returns for the same campaign. Marketers need a common measurement plan before launch, not after dashboards disagree.
Attribution versus incrementality
Retailer reporting is often strongest at showing that an exposed customer later bought something. It is weaker at answering whether the ad changed the outcome. High-intent search ads may receive credit for shoppers who were already planning to purchase, while upper-funnel video may influence demand that appears later and elsewhere. Holdouts or controlled tests are needed when the budget decision depends on causal impact.
Limited interoperability
Retail-media data may be available only in a retailer’s interface or in aggregated form. Moving insights between retailers, agencies and independent measurement systems can require matching conventions, privacy-safe environments and manual reconciliation. This increases labor costs and makes cross-network optimization slower.
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As more advertisers compete for high-intent placements, the price of access can rise. Auction rules matter because a bid is not always the same thing as the amount ultimately paid. Buyers should record the auction type, reserve rules, fees, minimums and any changes to those terms.
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What did the FTC allege about Amazon’s advertising auctions?
In August 2026, the Federal Trade Commission and attorneys general from 22 states sued Amazon. The complaint alleges that Amazon advertised generalized second-price auctions but used an undisclosed “soft reserve price” surcharge in Sponsored Products auctions. The allegations have not been adjudicated and should not be stated as established liability.
The distinction between auction models affects bidding economics. In a first-price auction, the winner pays its own bid and may try to reduce that bid through bid shading. In a second-price auction, the winner pays the amount required under the auction rules, generally tied to the next-highest qualifying bid or other stated rule. A hidden surcharge can change the relationship between the advertised mechanism and the advertiser’s effective cost.
The FTC’s August 2026 release says the complaint alleges that the percentage of time Sponsored Products advertisers paid their bid rose from between 30% and 40% in 2021, to 70% in 2022, and to approximately 80% in 2024 as a result of the alleged surcharges. Those percentages are the agency’s allegations, not findings by a court.
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What should an advertiser do before shifting more budget to retail media?
- Define the business outcome. Specify whether the objective is profitable new-customer acquisition, incremental sales, margin, awareness or store traffic. Do not use attributed revenue as a substitute for the objective.
- Separate formats. Report on-site search, on-site display, off-site and in-store activity separately so high-intent and awareness placements are not blended into one misleading average.
- Write the measurement rules down. Record attribution windows, conversion definitions, exclusions, returns treatment and the source of each metric.
- Set an incrementality plan. Use a holdout, geographic test or another defensible control where the spend is large enough to justify causal measurement.
- Audit auction economics. Review bid rules, reserve prices, fees and billing statements. Reconcile the bid submitted with the amount charged and document any policy or interface changes.
- Check data portability. Establish what can be exported, how often it is refreshed and whether the same customer or order can be counted on multiple networks.
- Compare total operating cost. Include creative adaptation, catalog work, agency fees, analyst time and data-clean-room or measurement expenses alongside media spend.
- Reallocate on comparable evidence. Move budget only after normalizing definitions and considering profit, incrementality and reach—not a platform’s headline return metric alone.
What does Amazon’s rise mean for the wider market?
Amazon’s scale shows why commerce media has become a central part of U.S. advertising strategy: a retailer can sell the inventory, observe shopping behavior and report outcomes in one commercial environment. Its streaming expansion also lets that retailer seek a larger share of the awareness budget.
The same structure concentrates negotiating power and makes transparency more important. Advertisers must evaluate not only where an ad appears, but also how the platform defines an impression, sets an auction price, assigns credit and permits independent verification. The market is growing, yet the quality of a budget decision depends on the measurement discipline applied behind the growth headline.
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