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The world of digital advertising is constantly evolving, with new trends and strategies emerging every year. However, very few have ever taken the advertising landscape by storm the way that commerce media and retail media have in recent years. In fact, worldwide retail media spend is expected to hit $140 billion this year, growing faster than almost any other form of ad spend.
That said, commerce media and retail media, while often spoken in the same breath, are not the same thing. While these terms are often used interchangeably, they represent distinct advertising strategies with unique benefits and challenges. For marketers, understanding the differences between commerce media and retail media is crucial to developing effective advertising campaigns.
Let’s explore the differences, examine how each media type functions, and look at their respective roles in the broader advertising ecosystem.
Commerce media and retail media are two closely related yet fundamentally different concepts within the digital advertising landscape.
Retail media primarily refers to advertising on a retailer's owned platforms, such as its website, app, or other digital properties. In some cases, retail media is also used to describe in-store advertising executions as well.
Retail media allows brands to promote their products directly to consumers who are already in a shopping mindset. For instance, ads placed on Amazon's website or Walmart's app are examples of retail media. This form of advertising is highly targeted and benefits from first-party data provided by the retailer, offering insights into consumer behavior and preferences.
Commerce media, on the other hand, encompasses a broader range of advertising opportunities that extend beyond a retailer's own digital properties. In fact, it extends beyond retail itself. According to eMarketer, “Commerce media is an umbrella term that encompasses retail media, financial media, or any media network using transactional data to power advertising.” That’s a wide net.
Commerce media includes ads served on various digital channels that can drive commerce, including social media platforms, content websites, and search engines. Commerce media leverages a wide array of consumer data, not limited to first-party data, to target potential buyers across the internet, enhancing the chances of conversion.
The growth in ad spend for both commerce media and retail media has been significant, reflecting their increasing importance in the advertising world.
In 2024, retail media ad spend in the U.S. alone is projected to reach nearly $60 billion, a significant increase from previous years. This growth is largely driven by major players like Amazon, Walmart, and Target, which have heavily invested in their retail media networks. According to eMarketer, Amazon alone accounted for more than 77 percent of the U.S. retail media market in 2022.
Commerce media ad spend is harder to quantify precisely due to its broader definition. However, given that it encompasses all of retail media and then some, it’s an even larger figure than the already-impressive tallies assigned to retail media. Commerce media includes commerce-data-driven advertising on social platforms like Facebook and Instagram, programmatic ads across the web, and search ads on platforms like Google. These channels collectively account for hundreds of billions of dollars in ad spend globally. According to GroupM, global digital ad spending will approach $700 billion in 2024, with a significant portion of that classified as commerce media.
Advertisers buy commerce media through various methods that allow them to target specific audiences and optimize campaigns based on their objectives. Commerce media networks offer several buying approaches, tools, and strategies to meet the needs of different advertisers. Here’s an overview:
Direct Partnerships with Commerce Media Networks: Advertisers often establish direct partnerships with commerce media networks to access first-party data, premium inventory, and exclusive placements. The process typically involves:
Programmatic Buying: Many commerce media networks enable programmatic advertising, allowing advertisers to buy media via automated platforms in real-time. There are two common forms of programmatic buying:
Self-Serve Platforms: Several commerce media networks offer self-serve platforms, empowering advertisers to manage their campaigns directly. Examples include:
Retail and Commerce Data Cooperatives: In privacy-centric ecosystems, commerce media networks may participate in data cooperatives where anonymized or aggregated data is shared across different partners to create more robust audience profiles for targeting. Advertisers can buy access to these cooperatives to benefit from cross-channel data insights while remaining compliant with privacy regulations. For example:
By using these varied approaches, advertisers can efficiently buy and manage commerce media in ways that maximize their return on investment.
Commerce media encompasses a variety of ad formats that are designed to drive purchases. Some of the most common ad formats include:
Commerce media networks are not limited to traditional retail or e-commerce platforms. Various industries, from travel to finance, have their own commerce media networks where brands can purchase ad space to reach consumers in a relevant context. Here’s what it might look like when brands buy ad space within different commerce media networks:
Travel Commerce Media Network (e.g., Expedia Group Media Solutions): Imagine a luggage brand like Samsonite purchasing ad space on a travel commerce media network such as Expedia’s platform. Their ads could be placed on hotel booking pages or flight confirmation screens, targeting users who are in the process of booking a trip and may need new luggage or travel accessories. By leveraging Expedia’s first-party data, the brand can create highly relevant, personalized ads that align with the consumer’s travel plans, increasing the chances of conversion.
Financial Commerce Media Network (e.g., Credit Karma): A personal finance app like Credit Karma offers a commerce media network where financial service providers, such as credit card companies or personal loan providers, can advertise to users actively managing their finances. For example, an airline credit card issuer might buy ad space to promote a travel rewards card to users who have recently been searching for financial products related to travel. These platforms have access to valuable first-party financial data that allows for targeted offers based on the user’s spending habits, credit score, or financial goals.
Ride-Sharing Commerce Media Network (e.g., Uber’s Ad Network): A restaurant chain might purchase ad space within Uber’s commerce media network. As users book rides to dinner destinations, the restaurant's ads could appear in the Uber app, offering a discount for nearby locations or a deal for users who pre-book a reservation. Uber’s commerce media network allows brands to reach consumers based on real-time location data and travel behavior, providing highly relevant offers at moments when users are likely to convert.
In each of these examples, commerce media networks allow brands to connect with consumers in relevant, intent-driven environments, increasing the likelihood of a purchase while offering a more personalized and seamless advertising experience.
All retail media is commerce media, but not all commerce media is retail media. In that regard, there are some specific differences that marketers should note when looking to specifically take advantage of the opportunities offered by retail media networks.
Retail media often involves placing ads directly on a retailer's website or app, although many networks are increasingly using their data to extend as opportunity to third-party environments. To tap into retail media, advertisers often partner with a specific retailer's media network. These networks, such as Amazon Advertising, Walmart Connect, or Target's Roundel, provide brands with the tools to create and manage ads on their digital properties.
Retailers offer a wealth of first-party data that advertisers can use to create highly targeted campaigns. For example, a brand can target consumers who have previously viewed their product or a similar product on the retailer's website. Additionally, some retail media networks offer self-service platforms where advertisers can directly manage their campaigns, track performance, and optimize ads in real time.
Retail media networks offer multiple ad formats, tailored to the shopping experience:
Retail media is prominently featured on major e-commerce platforms and brick-and-mortar retailer websites. Some of the major retail media networks even extend those offering to the in-store environment. Some notable examples include:
Social commerce, like retail media, is a subset of commerce media, focusing specifically on leveraging social media platforms to drive online sales. This includes ads designed to drive immediate sales within social platforms, influencer marketing, and direct selling features like Facebook Shops or Instagram Shopping.
Social commerce leverages the vast user data available on social media platforms to target ads more effectively and provide personalized shopping experiences. For instance, Instagram allows users to purchase products directly through the app, creating a seamless shopping journey from discovery to purchase. This direct-to-consumer model is increasingly popular among brands looking to engage younger, social media-savvy audiences.
Shopper marketing is another important aspect of commerce media, focusing on influencing customers at the point of purchase. While traditionally associated with in-store promotions, shopper marketing has evolved to include digital strategies.
In the digital realm, shopper marketing includes tactics like retargeting ads that follow users across the web after they view a product, personalized email marketing, and promotions that encourage online purchases. It has the ability to bridge the gap between online and offline shopping experiences, aiming to drive conversions whether a consumer is shopping in-store or online.
The future of commerce media and retail media is being driven by advances in technology and the continued growth in online shopping behaviors. As third-party cookies become increasingly limited in utility, the reliance on first-party data will grow, making commerce media—including retail media networks—even more valuable. As the industry evolves, the integration of artificial intelligence and machine learning will enable more sophisticated targeting and personalization, enhancing the effectiveness of both commerce and retail media.
We can also expect continued convergence between commerce media and retail media. Retailers will need to continue to expand their media networks to include off-site opportunities, just as non-retail commerce media platforms will increasingly look to integrate more direct selling features. Moreover, the growth of connected TV, digital out-of-home advertising, and contextual and native advertising will continue to open new avenues for both types of networks to reach consumers in innovative ways.
While commerce media and retail media are inextricably linked, understanding the differences between the two is vital for marketers aiming to optimize their advertising spend. In the years to come, this fast-growing area of advertising and technology will continue to present new and exciting opportunities for marketers looking to influence consumers across the buyers’ journey. Now is the time to sit up and pay attention.
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