Retail Media’s Great Balancing Act: How Smart Retailers Are Rewriting the Rules of Engagement

When retail media is surging ahead with “hockey stick” growth curves, it’s easy to understand the temptation: every brand, retailer, and technology provider wants their share of a market set to eclipse $170 billion globally. But beneath the headlines and revenue forecasts, the tradeoff at the heart of retail media, monetization versus customer experience, remains unresolved for most brands.

At CommerceNext’s Content Breakfast, Jason Zollan, Head of Retail Media at Constructor, cut through the noise with a sharp thesis: the true winners in retail media will be those who resist short-term thinking and design ad experiences that enhance, rather than interrupt, the brand journey. “Retail media is exploding,” Zollan noted, “but if you’re not careful, you can erode the very brand trust that makes it possible.”

Zollan began by drawing an unexpected parallel with the early days of web search, a landscape once dominated by Yahoo and Microsoft, before Google changed everything. The difference? Relevance.

Yahoo’s approach to paid listings was, in Zollan’s words, “a vivid position kind of way.” If you were a manufacturer of cat toys and willing to outbid others, your ad could appear anywhere, even in searches for dog food. Google’s introduction of the “quality score,” which weighed click-through and conversion rates alongside the bid, marked a turning point: ads had to be relevant, or they simply wouldn’t show. That attention to user experience ultimately won the market.

Retail media, Zollan argued, must now adopt a similar mindset. “Treat it the same way you would organic listings,” he advised, emphasizing that irrelevant ads not only fail to perform but can actively damage brand equity and customer loyalty.

It’s easy to see why the pressure is on. Retail media has moved from $1 billion to $30 billion in revenue at a speed that dwarfs the early growth of both search and social. Even as traditional ad channels plateau or decline, retail media is climbing at double-digit rates, with search-dependent placements leading the charge.

But for every retailer eager to cash in, there’s a cautionary tale: go too far with “bolted on” or legacy retail media solutions, and the brand pays the price. Zollan described a common scenario: sponsored product rows filling the top of every search result, with fixed positions for ads that rarely change. The outcome? Fatigue and irrelevance. One Harris Poll cited during the session found nearly a third of users abandon carts or entire sites because of excessive ads.

“It gets complicated quickly,” Zollan admitted, highlighting a “moonscape” of technology vendors and tools, each promising to maximize ROI. But without careful orchestration, the effect is often the opposite: declining organic sales, lower lifetime value, and the slow erosion of customer trust.

So, what’s the path forward? Zollan pointed to Amazon’s model as a standard-setter. Amazon’s ad placements are not only contextually relevant, they’re deeply personalized. If you search “drumsticks,” you’ll see the same size you bought three years ago, flagged as “purchased before.” Sponsored spots are nearly indistinguishable from organic, but the balance is clear: relevance first, monetization second.

Achieving this isn’t just a matter of adding new technology, but of changing the philosophy: “The problem most retailers face is that their ad server and organic search engine don’t talk to each other,” Zollan explained. When these systems are siloed, the customer suffers from mismatched or cannibalistic ad placements. When paid and organic are harmonized, sharing intent, purchase data, and real-time performance, something powerful happens: every slot is an active decision, balancing revenue with long-term value.

At Constructor, Zollan’s team treats retail media as “just another search engine problem.” If an ad isn’t helpful or relevant, the best choice is not to show one at all.

Skeptics might wonder if this “brand-first” philosophy delivers. Zollan offered hard evidence: in a recent A/B test with a large household essentials brand, Constructor enabled paid and organic systems to work in tandem. The result? A $2.4 million annual uplift, 2% of total online sales, without any statistically significant dip in organic revenue. In fact, organic sales actually increased, suggesting that relevant sponsored placements can have a “halo effect” on the rest of the shopping journey.

The takeaway: incremental revenue from retail media doesn’t have to come at the expense of the brand. It’s possible to optimize for both, but only when every stakeholder, tech, merchandising, marketing, agrees to measure success not just by ad revenue, but by the total value created for the business and its customers.

As retail media matures, Zollan’s playbook offers a clear set of rules for forward-thinking retailers:

In a market where every retailer is looking for an edge, the temptation to “monetize at all costs” will always be there. But, as Zollan made clear, the real winners will be those who remember why customers come and keep coming back—in the first place.

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