In recent years, retail has undergone a remarkable transformation, accelerated by **shifting consumer preferences** and the **COVID-19 pandemic**, which propelled e-commerce to new heights. While online sales have soared, the profits many retailers anticipated have lagged, leading to a scramble for alternative revenue streams.
In their quest to recover lost profits, numerous retailers outsourced their retail media operations to third-party gatekeepers. Although this seemed like a quick solution, it came with a significant downside: **retailers inadvertently surrendered control** over their most crucial brand partnerships, particularly those suppliers that represent their largest advertising base. As retail media evolves into a cornerstone of modern advertising, **regaining ownership** of these relationships and operations has become more vital than ever.
The Lost Control: A Brief Overview
The combination of a global pandemic and rising tariffs has repeatedly forced traditional brick-and-mortar retailers into rapid digital transformations, often lacking the luxury of **long-term planning**. Escalating shipping costs, high return rates, and complicated fulfillment logistics have further eroded already-thin margins, making advertising revenue a lifeline for survival.
However, retail and advertising operate on fundamentally different wavelengths. Building a thriving ad network necessitates specialized skills, comprehensive technology, and a profound understanding of ad science—areas where many retailers were unprepared to invest. As a result, they outsourced advertising operations, sales, and support to third parties. What initially appeared to be an efficient shortcut quickly evolved into a **strategic liability**.
The Hidden Costs of Gatekeeping
This seemingly pragmatic choice introduced long-term structural risks. By handing control of advertising decisions to gatekeepers, retailers lost command over vital brand relationships, **consumer insights**, and critical mechanisms such as **ad pricing**, pacing, and auctions. This not only diminished the effectiveness of their ad inventory but also constrained their ability to monetize and optimize for high-intent audiences.
Most alarmingly, they relinquished ownership of their **first-party data**, which is arguably their most powerful asset. Gatekeepers leveraged this data to fortify their networks, widening the power gap and complicating efforts for retailers to regain **strategic autonomy**.
A Strategic Blueprint to Reclaim Control
Reclaiming control does not necessitate going it alone; rather, it calls for a **selective and strategic approach**. Retailers should pivot away from traditional outsourcing models that transfer ownership and instead pursue technology partnerships that empower **internal decision-making** and reinforce their autonomy.
Modern ad tech partners should function as **technical enablers** rather than traditional gatekeepers. Retailers must remain in the driver’s seat, preserving control over customer data, brand relationships, and monetization levers, while utilizing external platforms to enhance execution, boost efficiency, and foster innovation.
A critical first step involves investing in **internal advertising capabilities**. By closely integrating ad operations with merchandising teams, retailers can ensure that those with a deep understanding of customer behavior and supplier relationships are shaping strategy, pricing, and campaign execution.
Importantly, **internal ownership** doesn’t mean building everything from scratch. Rather than duplicating complex ad infrastructure or machine-learning systems internally, retailers should collaborate with trusted partners specializing in cutting-edge technology and science that’s challenging and costly to replicate. This balanced strategy enables **retailers to maintain strategic control** while accelerating performance through proven, scalable solutions.
Equally crucial is a solid **first-party data strategy**. By managing both on-site and off-site advertising in-house, retailers can maintain data integrity, ensure transparency, and create **more personalized customer experiences**. On-site placements like **sponsored search** keep control within the retailer’s ecosystem, while well-managed off-site campaigns can broaden reach without sacrificing **consumer trust**.
Forging the Future of Retail Media
Retailers now face a pivotal choice: continue relying on gatekeepers or take bold steps to reclaim control and redefine their operational models. Those who invest in internal teams, safeguard their data assets, and pursue synergistic ad tech partnerships will be uniquely positioned to unlock the full potential of retail media networks.
If executed correctly, this strategic shift has the potential to enhance profitability, deepen supplier trust, and forge richer customer connections—fueling not just advertising revenue, but also establishing a **long-term competitive advantage**.
Pat Copeland is the general manager of Moloco Commerce Media (MCM), an innovative AI-native ads engine that enables retailers and marketplaces to build high-performing retail media networks.
