In some advertising circles, you may have started to hear the expression "commerce media" emerging. This is because it is a new approach to digital advertising that is changing the way commerce is conducted. However, commerce media is one of those terms that seem simple, but when someone tries to explain it, most people get confused.
Commerce media is advertising that connects consumers to products and services throughout the entire purchasing journey, across both physical and digital touchpoints, directly linking advertising investment to transactions.
Although it seems simple, commerce media is a multifaceted advertising approach that is still very new. Below are ten key facts about commerce media to clarify its fundamental principles
1. Commerce media is a new and evolving concept
The term gained popularity with the release of Amazon's advertising revenue report in 2022, accompanied by a promise of unprecedented access to commercial data for brands, as well as a new revenue stream for retailers. Although there is a rise in memberships to commerce media, the ecosystem has a long way to go to fully leverage its benefits.
2. Commerce media is independent of the sales channel
Commerce media involves the connection of all media that can be associated with online and offline sales transactions, or that use commercial data to enrich and optimize audience segmentation. The modality is the offering of products in physical stores, marketplaces, and e-commerce platforms, or even content and news platforms.
3. Commerce Media Doesn’t Exist Without Data and AI
The segmentation and targeting of commerce media audiences are based on commercial data (signals and transaction intent/travel of the customer in the real world) to inform marketing decisions, improve segmentation, create efficient and effective ads, and provide optimized consumer experiences.
This is only possible through artificial intelligence, which is capable of analyzing and working with commercial data to develop predictive models that improve recommendations and bidding. And they can also help publishers improve their audiences for monetization.
4. Commerce media multiplies revenues for non-advertisers too
Many types of businesses can benefit from this modality, including advertisers, agencies, data analysis platforms, media measurement platforms, among other players that support media operators in driving results, thereby multiplying their revenues.
5. The biggest inhibitor to commerce media is fragmentation
There is no single approach to commerce media – each player in commerce (retailers, marketplaces, or e-commerce) has its own way of negotiating ads, defining audiences, policies, and using data. For brands, this makes it difficult to reach their target audiences as well as to measure the ROI of campaigns. Thus, an effort to standardize and unify the market can be the main improvement to increase revenues for all participants.
6. Commerce media is not retail media
Retailers are among the first players in commerce media, but the modality has new players, the newcomers. However, other industries, such as automotive, airlines, hotels, and the sharing economy, bring their own sets of data and unique capabilities, as well as different types of transactions.
7. Commerce media provides insights beyond retail
Because it is not only multi-commercial but also multi-sectoral, commerce media has datasets of behavior and transactions from a broader range of environments and audiences. These insights can further improve segmentation and personalization, as well as expand the marketing mix.
8. Commerce media expands opportunities in the digital ecosystem
Commerce media expands the scope of traditional programmatic channels by connecting onsite and display experiences at points of sale and offsite on the open web and physical stores. The modality creates opportunities for non-endemic advertisers on retailer websites, allows publishers to implement commerce-oriented monetization strategies, and enables media buyers and sellers to identify the value of their primary data.
9. Commerce media is omnichannel and full-funnel
Commerce media is not limited to reaching customers at the point of sale but across all channels and throughout all stages of the purchase funnel—provided that the touchpoints can be attributed to transactions. This means that the strategy can be assigned from the initial research stage through to the final purchase – awareness, consideration, and conversion.
10. Commerce media is multi-format and multi-channel
To connect with consumers across the funnel, commerce media embraces a variety of formats and channels, far beyond the sponsored ads traditionally associated with retail media, also including video, display, contextual, shoppable ads, CTV, OOH and SMS, among others.
Currently, commerce media on the open internet is fragmented, with demand-side platforms (DSPs), supply-side platforms (SSPs), and retail SSPs operating separately. But as privacy continues to be a priority across the entire ecosystem, marketers and media owners will seek more integrated solutions to manage, scale, and activate first-party data and addressable audiences. The commercial media space is expected to advance rapidly in these areas, making it easier for marketers and media owners to work together to deliver richer experiences to consumers.
