Retailers Find Bigger Growth Selling Ads Around the Shopping Cart

Retail media is giving Walmart, Target and Amazon a faster-growing source of revenue than their core retail businesses, built on the same traffic, searches and transaction data generated by stores, websites and marketplaces.

The latest quarter showed the gap. Sales from Walmart Connect increased 43% year over year. Target’s reported advertising revenue, primarily from Roundel, rose 29% to $279 million. Amazon’s advertising services revenue increased 26% to $19.8 billion.

That compares with Walmart U.S. net sales growth of 3.5%, Target merchandise sales growth of 5% and roughly 15% growth in Amazon’s online stores business.

The difference helps explain why retail media is attracting more attention inside the retail P&L. Merchandise requires inventory, fulfillment and, frequently, price competition. Advertising lets retailers generate additional revenue from traffic and transaction data produced by that merchandise business.

Networks Are Showing Scale

Walmart’s disclosures show how large that business has become. Global advertising generated nearly $6.4 billion in fiscal 2026, up 46%, including Vizio. A year earlier, Walmart’s global advertising business generated roughly $4.4 billion. The growth has continued this year.

Walmart Connect increased 44% in the first quarter and 43% in the second. Global advertising grew 37% and 38%, respectively. During an earnings call, Chief Financial Officer John David Rainey said strong advertising and membership revenue contributed to double-digit incremental margins in Walmart U.S. eCommerce during the first half.

Target’s disclosure revealed that in the second quarter, advertising revenue was $279 million, up from $217 million a year ago. Target said that line primarily represents advertising services provided through Roundel.

The longer-term growth is substantial. Target reported $915 million in advertising revenue in 2025, compared with $649 million in 2024 and $522 million in 2023.

The $279 million doesn’t capture all of Roundel’s economics. Target said some Roundel arrangements are recorded as reductions to cost of sales or SG&A, depending on the nature of the arrangement. Management separately reported that Roundel gross billings increased nearly 20% in the quarter.

The network is also being built alongside Target’s physical and digital infrastructure. Target opened 17 stores during Q2 and had more than 100 full-store remodels underway. More than 95% of its sales are fulfilled through stores. CEO Michael Fiddelke said the company’s technology investments include personalization across stores and digital channels, as well as efforts to strengthen its retail media business.

For Amazon, advertising services revenue reached $19.8 billion in Q2, up from $15.7 billion a year earlier. Amazon defined the category as advertising sold to sellers, vendors, publishers, authors and others through sponsored ads, display and video.

Amazon’s underlying commerce businesses are also feeding that operation. Online store sales were $70.4 billion in Q2, and third-party seller services generated $46.8 billion. Both grew more slowly than advertising services.

Retail Media Is Growing Fast

What the results show is that retail media is growing faster than the merchandise businesses around it. It’s also beginning to influence the economics of digital retail, particularly as marketplaces, fulfillment and transaction data give retailers more advertising inventory to sell.

The next stage of retail media growth is likely to depend on how much more advertising retailers can build around commerce without relying on equivalent growth in merchandise sales. Walmart’s marketplace and eCommerce expansion, Target’s rising Roundel revenue and Amazon’s push from sponsored listings into video show the networks moving across more of the shopping journey, while the retailers’ transaction data gives brands a way to measure whether those ads ultimately produce a sale.

The latest results suggest those capabilities are becoming a more established source of revenue alongside the retail business, rather than simply another way to promote the products sold through it.