In the ever-evolving digital landscape, businesses are constantly searching for new ways to drive growth and maximize profitability. The demise of third-party cookies, combined with consumer demand for more relevant and privacy-centric experiences, has fundamentally changed digital advertising. The answer for many forward-thinking companies is a sophisticated strategy known as commerce media.
This is a new force transforming advertising, moving beyond traditional retail-focused approaches to leverage first-party purchase and intent data across a wider ecosystem. It allows businesses of all types to tap into high-intent audiences and create lucrative new revenue streams.
What is commerce media?
At its core, commerce media is advertising that directly connects media impressions with commerce transactions. It works by using privacy-safe, first-party data from an ecosystem of retailers, publishers, and other businesses to power targeted, relevant advertising both on and off-site.
Unlike traditional retail media, which is confined to a single retailer’s website, commerce media operates on the “open internet,” allowing businesses to reach in-market consumers across various digital touchpoints.
The commerce media ecosystem includes three key players:
- Marketers: Brands and advertisers looking to reach valuable, high-intent audiences.
- Media Owners: Businesses like publishers, marketplaces, and retailers that monetize their first-party data by selling ad inventory.
- Consumers: The shoppers at the center of the ecosystem who want personalized, relevant experiences.
How commerce media creates new revenue streams
Monetize existing first-party data:Publishers, retailers, and other media owners can sell targeted ad space on their websites and apps using their first-party data, creating a new, high-margin revenue stream.
Host a retail media network (RMN): Large retailers like Amazon and Walmart have already built successful RMNs, where they offer sponsored product listings and other ad formats on their own sites. This can be a major profit driver.
Offer off-site advertising: By partnering with other publishers and media owners, companies can extend their ad reach across the open internet. This allows brands to target high-intent shoppers from one network with personalized ads on a completely different site.
Facilitate shoppable experiences: Innovative ad formats—like shoppable videos on connected TV (CTV) or interactive display ads—allow consumers to make a purchase directly from the ad. Media owners can provide these new formats to advertisers, capturing more of their ad spend.
Engage in data partnerships: By joining a commerce media network, businesses can connect their own first-party data with larger data sets. This allows them to scale their audiences and offer enhanced, data-driven targeting capabilities to advertisers, increasing the value of their ad inventory.
The benefits of commerce media
Adopting a commerce media strategy offers compelling advantages beyond just new revenue:
Reduced reliance on walled gardens:Commerce media on the open internet provides an alternative to restrictive “walled garden” platforms, giving marketers greater control and transparency.
Higher returns for advertisers: Brands can achieve higher return on ad spend (ROAS) by targeting consumers who have demonstrated clear purchase intent. A recent BCG survey found that 86% of ad buyers report higher performance from commerce media compared to other digital ads.
Enhanced customer experience: Consumers are served more relevant and personalized ads, making their shopping journey more seamless and enjoyable.
Increased data and transparency:Commerce media provides valuable, closed-loop measurement, allowing businesses to directly connect ad spending to transactions and prove ROI.
Future-proof advertising: By leveraging first-party data, commerce media provides a solution for advertisers in a post-cookie world.
The rise of commerce media marks a pivotal shift in digital advertising, moving beyond guesswork toward data-driven insights. For businesses sitting on a treasure trove of first-party data—whether they are retailers, publishers, or digital-first companies—this represents a significant opportunity. By embracing commerce media, businesses can not only diversify their income but also deliver more valuable and personalized experiences to their customers, ultimately building a more resilient and profitable business model for the future.