For many brands, retail media is becoming one of the most important places to compete for customers already prepared to buy.
In fact, advertisers continue to allocate more spend toward retail media because of its targeting precision and closed-loop measurement capabilities, per Forrester.
Likewise, most retailers are deploying or are planning to deploy AI in retail media initiatives within the next 12 months, according to a report by Deloitte.
These numbers are encouraging for decision-makers who are still on the fence regarding retail media.
But the data also raises an important question.
If retail media is attracting more investment, should Amazon receive a larger share of the marketing budget?
According to Alex Stoykov, Founder and CEO at Olifant Digital, a leading full-service marketing agency for Amazon & eCommerce brands, the answer to that question is nuanced.
"Retail media is attracting more investment because it finally gives brands a direct connection between advertising spend and measurable business outcomes," he says.
"But increasing Amazon budgets simply because everyone else is doing it is the wrong approach. Brands should understand exactly where Amazon fits within the customer journey and invest where it creates incremental growth."
Amazon is one of the strongest commerce platforms in the world, so some marketers make the mistake of blindly moving more of their ad budget towards it.
But every ad channel, from search ads to social media ads, serves a different purpose.
For example, Amazon performs exceptionally well when shoppers already know what they want.
Customers searching on Amazon are often comparing products, validating options, or preparing to purchase. That makes the platform particularly effective at capturing high-intent demand.
On the other hand, Google is effective at introducing new customers to brands through informational searches.
Meanwhile, social media creates awareness and product discovery. And email marketing encourages repeat purchases.
This is why brands should evaluate several criteria before increasing Amazon investment.
- Margin and category economics
- Budget and bid ceilings in Sponsored Products campaigns
- Listing quality and catalog completeness
- Product page conversion performance
- Incrementality testing for genuine growth versus cannibalized organic sales
"Stop starting with 'how much should we spend' and start with what each channel is actually built to do," Stoykov adds.
"Don't move a dollar into Amazon until you know it will find genuine incremental demand there."
Measure Incremental Growth Instead of Advertising Efficiency
Once a brand decides Amazon deserves a larger share of the ad budget, the next question is "how much of an increase is needed?"
The best way to answer that is to increase investment gradually, measure the business impact, and scale only when the data demonstrates genuine growth.
But Stoykov cautions teams to avoid relying solely on familiar metrics like ROAS, clicks, or impressions.
"Older attribution models can be misleading when used in isolation since last-click attribution tends to give all the credit to the last place a customer visited before they made a purchase."
"This is why advertisers should focus more on incrementality as their number one retail media KPI."
This is mostly because customer journeys are becoming more fragmented than ever.
A shopper might discover a brand on social media, compare products through Google, read reviews, and only click an Amazon ad immediately before purchasing.
This is a problem since attribution models only look at the final result.
But incrementality measures the actual impact that each marketing activity has on a result, and whether or not the same results could've been achieved organically.
That makes it a far more useful indicator when deciding whether increasing Amazon spend is actually driving growth or simply capturing demand that already existed.
From there, brands can build a measurement framework that validates whether additional investment is producing meaningful business outcomes.
And once measurement confirms genuine incremental growth, increasing investment becomes a much easier decision.
According to Olifant Digital, brands are generally ready to scale when:
- Incrementality tests consistently show genuine business lift.
- Listings continue converting additional traffic efficiently.
- Reporting accurately measures profitability and customer acquisition quality.
- Campaign complexity has outgrown internal management capabilities.
Under those conditions, increasing Amazon investment becomes a strategic growth decision rather than a larger advertising expense.
Invest Where Growth Can Be Proven
Under those conditions, increasing Amazon investment becomes a strategic growth decision rather than a larger advertising expense.
Retail media will almost certainly continue attracting larger marketing budgets as AI reshapes how consumers discover and evaluate products.
The challenge for brands is making sure those additional dollars create new demand rather than simply generating more impressive reporting dashboards.
After all, spending more has never been the difficult part. It's proving that every additional marketing dollar spent generates the right results.
