No matter the industry, artificial intelligence (AI) has likely made an impact in recent years -- and retail media is no exception. As we move through 2025, AI is transforming how brands connect with consumers, optimize ad spend, and leverage data in unprecedented ways. Here are some key areas where AI is revolutionizing retail media this year.
AI has significantly improved contextual targeting and ad relevance. Traditional methods relied heavily on keyword matching, often resulting in misplaced or irrelevant ads. AI has changed the game by understanding content and user intent at a much deeper level.
According to a study by Cooler Screens, 53% of marketers believe AI will “significantly enhance” how shoppers are targeted and served relevant ads. This optimism is well-founded, given that AI can now analyze vast amounts of unstructured data, recognize semantic connections, and predict behaviors and actions based on consumer patterns.
Nick Radicevic, Senior Manager of Product Management at Amazon Ads, explains: “AI doesn’t just look at surface-level content; it predicts where ads will perform best based on consumer behavior patterns and purchase propensity.” For instance, AI might serve a smartwatch ad on a car-related article, identifying a strong correlation between tech-savvy shoppers and automotive content, Radicevic explained.
This sophisticated approach allows brands to deliver more meaningful, privacy-friendly advertising experiences that resonate in real time, driving better engagement and reducing wasted impressions.
AI is also transforming how media agencies and brands optimize their campaigns. By automating routine tasks and delivering deeper insights, AI enables marketers to focus on higher-level strategy and creativity.
At the Digiday Media Buying Summit in Nashville, David Dweck, SVP of Paid Media at Wpromote, highlighted how AI empowers his senior team to “have more time for strategic thinking and pushing a client forward versus being in the weeds pulling bulk sheets out and uploading things."
AI-powered tools can now analyze spot-by-spot search and conversion uplift based on ad creative and network programming, refine creative across social and search, and feed weekly optimizations into large language models for actionable insights. This level of automation drives more efficient resource utilization and faster, data-driven decision-making.
While AI-generated creative is still evolving, it has tremendous potential to streamline the creative process and generate highly personalized content at scale. Adobe, for example, is pushing the boundaries with its agentic AI tools. The company’s new Agent Orchestrator allows brands to create personalized “concierge” agents for their websites, potentially revolutionizing how retailers interact with customers online by providing tailored assistance and product recommendations.
However, human creativity remains essential. As Dweck points out, “On the creative side, [AI] is far from ready for showtime in terms of creative generation…Gemini is not there, I'll say that much." The key lies in finding the right balance between AI-generated content and human input.
AI isn't just transforming digital retail media; it's also making a significant impact on physical stores. Retailers are increasingly using AI to enhance customer experiences and streamline store operations.
A survey by Everseen found that approximately 60% of retail companies have already implemented AI for loss prevention, with another 30% planning to do so within the next year. Top benefits include enhanced customer support, optimized store layouts, and improved inventory management. Walmart has already embraced AI and machine learning (ML) for inventory management, demand forecasting, and supply chain optimization, launching its AI-powered logistics product last year.
This integration of AI into physical retail spaces also creates new opportunities for retail media networks. As the line between digital and physical shopping experiences continues to blur, advertisers can leverage AI to deliver seamless, personalized omnichannel customer journeys across both online and offline touchpoints.
With the phase-out of third-party cookies and rapidly changing privacy regulations, AI has become indispensable for retailers navigating the new data landscape. AI can integrate fragmented online and offline datasets, creating a more holistic view of customer behavior while maintaining privacy compliance.
According to the Cooler Screens survey, 54% of marketers view AI as crucial for seamless integration of online and offline data -- and this unified customer view is essential for delivering consistent, personalized experiences across all channels.
As Jay Friedman, CEO of Goodway Group, notes in an AdAge op-ed: "Marketers who see AI as a productivity tool alone will miss out on its strategic potential." The true power of AI in retail media lies in generating actionable insights while respecting consumer privacy.
As we look beyond 2025, it's clear that AI will continue to play an increasingly centralized role in retail media. While challenges remain -- including implementation hurdles, system integration, and building consumer trust -- the continued evolution of AI promises even more innovative applications, from advanced predictive analytics to fully automated, AI-driven advertising ecosystems.
For marketers and ad tech professionals, staying ahead of these AI-driven changes is essential. Those who can effectively harness AI’s capabilities in their retail media strategies will be well-positioned to deliver more relevant, engaging, and effective campaigns.
Artem Lavrinovich, Chief Data and Product Officer at Cooler Screens, sums it up well: "AI's capability to deepen our insight into consumer behavior is a significant leap forward for retail media."
