DSPs Promise To Unlock Retail Media Demand. What's Holding Retailers Back?

Forbes

17-06-2025

A man shops on Shein, a chinese e-commerce platform, during the Eid al-Adha holiday, in Hawalli ... More Governorate, Kuwait, June 7, 2025. (Photo by Asad/Xinhua via Getty Images)
Advertisers are begging for easier access to retail media networks. Research from ad server platform Koddi shows that 96% of media buyers say they "will certainly or will consider buying on-site media via a DSP (Demand Side Platform)," while 93% would shift non-retail budgets into retail media if they could transact programmatically. For retailers struggling to grow their high-margin advertising businesses beyond their core supplier base, connecting to demand-side platforms represents a clear path to unlock new revenue streams.
Yet despite this obvious demand-supply mismatch, most retailers remain hesitant to integrate with multiple DSPs. Technical hurdles, competitive concerns, and internal bandwidth are some reasons why retailers aren't immediately falling over themselves to integrate with the newest crop of DSPs that have entered the retail media space.
As retail media networks face intensifying pressure to grow revenue while protecting their most valuable asset (first-party data), the decision of which DSPs to partner with has become increasingly complex.
The retail media DSP race has intensified dramatically as tech giants recognize the opportunity to capture a share of the large and growing retail media market.
The current crop includes new faces as well as incumbents who are turning their focus to retail media.
Google's DV360 now offers "Retail Media Solutions" that pair retailer audiences with YouTube inventory.
Microsoft is positioning itself as an aggregation point across retail media networks with its "Curate for Commerce" capability.
Meta has launched explicit retail media APIs, allowing retailers like Best Buy to pipe loyalty and purchase data directly into Meta's ad system.
The Trade Desk has become the preferred "independent" DSP with deep retail partnerships and UID2 leadership, making retail its fastest-growing vertical.
Amazon maintains dominance through its closed-loop ecosystem but limits cross-retailer planning for advertisers.
Yahoo focuses on being the off-site extension for retailers lacking DSP capabilities
Criteo leverages its existing infrastructure powering 225 retailers worldwide.
New entrants include ad-tech firms who have previously focused on the ad-serving technology for retailers. Unlike traditional DSPs that bid on ad impressions across the open web, players like Topsort have recently announced commerce-native exchanges that let brands purchase the same SKU as a sponsored listing across every retailer plugged into their retail-media stack.
The DSP opportunity is compelling for both retailers and advertisers. In the case of Microsoft, retailers gain access to Microsoft's existing advertiser relationships—approximately 500,000 advertisers already using their platforms—without the overhead of building direct relationships. For brands, it promises simplified campaign management across multiple retail properties.
Despite the clear benefits, most retailers are selective about DSP partnerships. The challenges of integrating with multiple demand-side platforms go far beyond technical implementation.
Diminishing Incremental Demand: The first one or two DSPs typically unlock the bulk of programmatic budgets—for example, The Trade Desk for independent agency demand plus Google's DV360 for Google-centric buyers. Subsequent partners deliver smaller, sometimes overlapping pools of advertiser spend, while integration costs continue linearly.
Escalating Opportunity Costs: Every development sprint spent certifying another DSP represents time not spent improving on-site ad formats, merchant analytics, or loyalty-media products that could raise average revenue per user more meaningfully.
Technical and Data Governance Complexity: Retailers must map their customer data to multiple different identity frameworks—UID2, PAIR, RampID, EUID—which creates both technical complexity and potential privacy compliance issues.
"Today, most RMNs operate within a managed service model, with self-service capabilities on the horizon," notes Lori Johnshoy, Head of Global Retail and CPG Strategy at LiveRamp. "When evaluating managed service options, selecting a primary DSP that integrates seamlessly with your existing tech stack is critical. One of the key benefits of such integration is streamlined activation, which enhances efficiency and speed to market."
Operational Fragility: Five DSPs means five sets of service-level agreements, five sets of downtime alerts, and five invoice files every month. And as one former retail media leader told me, 'Every partnership takes three to six months just to get through procurement. You can't even get meetings scheduled because they're so busy.' This bottleneck forces retailers to be highly selective about which DSP relationships justify the extensive legal, technical, and operational overhead.
For retailers who recognize they need DSP partnerships to grow, the selection criteria go well beyond technical capabilities. Based on conversations with retail media executives, several key factors emerge:
Identity Alignment: Each major DSP operates on different identity frameworks—PAIR for Google, UID2 for The Trade Desk, RampID for LiveRamp via Yahoo. Retailers must benchmark match rates, privacy compliance, and crucially, who owns the resulting customer graph when deciding which identity solutions to support.
Advertiser Access and Demand Quality: The promise of DSP integration is accessing new advertiser budgets. "In addition, the chosen DSP should provide broad publisher access across all major formats—including display, social, audio, video, and CTV—to maximize campaign reach and performance," explains LiveRamp's Johnshoy, who previously led sales for Target's Roundel media network. "Measurement capabilities are equally important. Look for solutions that offer real-time optimization and publisher signal access to support consistent, standardized measurement frameworks."
Control and Brand Safety: Retailers need assurance that third-party DSPs won't compromise their customer experience. As one former retail media executive told me, "If I show an ad on the home page that links off-site and suddenly the fire alarm goes off because I just lost that consumer, that consumer is much more valuable to me than the ad revenue."
Future-Proofing Capabilities: With retail media rapidly evolving toward real-time bidding and clean-room integrations, retailers need DSP partners who can scale alongside their ambitions. As I explored in a previous post for Forbes, Why Real-Time Bidding Is Retail Media's Next Frontier, the industry is moving toward standardized programmatic protocols that will become table stakes for transparent, cross-retailer measurement.
For retailers who want to monetize their data without the complexity of full DSP integration, audience syndication presents an alternative model. Platforms like LiveRamp's Data Marketplace allow retailers to license their first-party audiences to programmatic buyers without building a complete DSP/SSP stack.
"When considering an audience strategy, such as self-service activation—where retailers make select audiences available within a DSP for third-party activation—it may be advantageous to look beyond your managed service DSP," says Johnshoy. "Expanding your reach enables greater access to advertisers. However, it's crucial to retain flexibility to enforce business rules, such as competitive exclusions or varying levels of data granularity."
The trade-off is margin. Industry insiders tell me that audience syndication typically delivers well under 50% profit margins, while on-site sponsored placements can return 80-90%. However, for retailers struggling to grow their core advertising business, audience syndication can unlock incremental demand and scale.
For retailers committed to DSP partnerships, order management platforms can significantly reduce operational complexity. Mark Donohue, General Manager of Retail Media at Placements.io, who emphasizes that a channel-agnostic order management system can simplify operations for both retailers and advertisers. "If you have a direct relationship with TikTok, Pinterest, or you're running CTV through Magnite, we can manage that through a single interface. You just specify your parameters and pricing, and we handle the execution and performance reporting."
This approach allows retailers to maintain their preferred partnerships while streamlining operations. "Each of the off-site partnerships—whether you're doing direct deals with the major platforms or working through DSPs—typically takes three to six months to implement," Donohue notes. "If you can knock out 80% of your off-site advertising through a unified platform, it significantly reduces the burden on legal, procurement, and finance teams."
Despite concerns about commoditization, retailers can syndicate inventory through DSPs without creating an open-auction free-for-all. The key is implementing proper guardrails that preserve competitive advantages while opening access to new demand.
Successful DSP partnerships typically include category blocks, competitive exclusion rules, and carefully controlled data granularity. Retailers can offer curated audience segments and premium ad formats while maintaining control over pricing floors and inventory allocation.
The most sophisticated retailers are already implementing these strategies. Rather than viewing DSP integration as an all-or-nothing decision, they're creating tiered access models that balance revenue growth with strategic control.
As the DSP landscape continues to evolve, consolidation seems inevitable. With 250+ retail media networks in the US alone competing for advertiser attention, and brands typically managing relationships with only 6 networks according to Skai research, the math doesn't work for everyone.
The retailers who succeed will be those who can balance protecting their unique data advantages while providing the programmatic access advertisers increasingly demand. As one retail media executive put it, "If you can't prove incremental performance, brands won't continue to invest with you."
DSP integration represents both an opportunity and a strategic inflection point for retail media networks. Those who approach it thoughtfully—selecting partners aligned with their long-term vision and implementing proper guardrails—will likely find themselves better positioned in an increasingly competitive landscape. Those who avoid it entirely may find their growth stalling as advertisers gravitate toward more accessible alternatives.
The question isn't whether retail media will become more programmatic—it's which retailers will lead that transformation and which will be left behind.