Breaking Free: How Retailers Are Reclaiming Control Over Their Advertising Businesses

Retail has dramatically transformed in recent years as evolving consumer preferences and the COVID-19 pandemic turbocharged e-commerce growth. While online sales surged, profitability didn’t keep pace — leaving retailers scrambling for alternative revenue streams.

In the rush to recover lost profits, many retailers handed over their retail media operations to third-party gatekeepers. This quick fix, though initially convenient, came at a high cost: retailers unknowingly ceded control over their most important brand partnerships — the same suppliers that make up their largest advertising base. Today, as retail media becomes a cornerstone of modern advertising, reclaiming ownership of these relationships and operations is more critical than ever.

How Retailers Lost Control

From a global pandemic to rising tariffs, external shocks have repeatedly forced brick-and-mortar retailers into rapid digital transformation, often without the luxury of long-term planning. Soaring shipping costs, high return rates, and expensive fulfillment logistics eroded already-thin margins, making advertising revenue essential for survival.

Yet, retail and advertising are fundamentally different businesses. Building a thriving ad network requires specialized skills, technology, and a deep focus on ad science — areas in which many retailers were unprepared to invest. In response, they outsourced advertising operations, sales, and support to third parties. However, what seemed like an efficient shortcut quickly became a strategic liability.

Hidden Cost of Gatekeepers

What began as a pragmatic choice created long-term structural risks. By giving gatekeepers control over advertising decisions, retailers also gave away control of brand relationships, consumer insights, and critical levers such as ad pricing, pacing and auctions. This undermined the yield of their own ad inventory and constrained their ability to monetize and optimize for high-intent audiences.

More importantly, they lost ownership of first-party data, their most powerful asset. Gatekeepers used that data to strengthen the flywheel for their own networks, widen the power gap, and make it increasingly difficult for retailers to regain strategic autonomy.

Strategic Path to Reclaim Control

Regaining control doesn’t mean going it alone; it means being selective and strategic. Retailers should move away from traditional outsourcing models that transfer ownership and instead pursue technology partnerships that empower internal decision-making and reinforce autonomy.

Unlike outdated third-party arrangements that cede control, modern ad tech partners should serve as technical enablers. Retailers must stay in the driver’s seat, maintaining control over customer data, brand relationships, and monetization levers, while using external platforms to scale execution, improve efficiency, and accelerate innovation.

A critical first step is investing in internal advertising capabilities. By integrating ad operations closely with merchandising teams, retailers ensure that those who deeply understand customer behavior and supplier relationships are driving strategy, pricing and campaign execution.

Internal ownership, however, doesn’t require building everything from scratch. Instead of replicating complex ad infrastructure or machine-learning systems in-house, retailers should rely on trusted partners that specialize in the sophisticated science and technology that’s difficult and expensive to replicate. This balanced approach enables retailers to retain strategic control while accelerating performance through proven, scalable solutions.

Equally important is a strong first-party data strategy. Managing both on-site and off-site advertising in-house helps preserve data integrity, ensures transparency, and enables more personalized customer experiences. On-site placements like sponsored search maintain control within the retailer’s ecosystem, while carefully managed off-site campaigns can expand reach without compromising consumer trust.

Charting a Future for Retail Media

Retailers now face a pivotal choice: continue depending on gatekeepers or reclaim control and redefine the model. Those that invest in internal teams, protect their data assets, and pursue aligned ad tech partnerships will be well-positioned to unlock the full potential of retail media networks.

Done right, this shift will drive stronger profitability; deepen supplier trust; and create richer, more direct connections with customers — fueling not just ad revenue, but long-term competitive advantage.

Pat Copeland is general manager of Moloco Commerce Media (MCM), the only AI-native ads engine that enables retailers and marketplaces to activate high-performing retail media networks.