Retail Media Growth is Steady, but Display Formats Lag Search

Retail media is steady and continuing to grow, but there is a clear gap opening up between search and display. Overall growth has come down from 22.3% in Q4 2023 to 11.2% by Q4 2025, which shows the channel is in a good position. Display peaked at 21.1% growth in Q3 2025 but is forecast to fall to 7.4% by Q3 2026. Search is ahead as spend hit $38.1bn in Q4 2025 and is expected to reach $50.5bn by Q4 2027, with brands investing mainly to drive sales and profitability. That said, James McDonald, Director of Data, Intelligence & Forecasting at WARC, has flagged that AI could threaten the human traffic volumes that retail media has relied on. In short, if AI starts doing the searching for people, fewer people are seeing and clicking on search ads.

What this means for us:  

Search is outperforming display in retail media right now and should remain a priority in our client plans. Display is growing but slowly, and the data suggests it isn't ready to take a bigger share of budget. Display can still play a role in client plans but shouldn't be the main focus. The gap between search and display is likely to widen further based on current forecasts, so it is a trend we should keep an eye on. On top of this, WARC has flagged AI as something to watch because it has started to change how people search and shop online, which means search volumes could be affected down the line, so this is something to keep in mind when planning future plans.