What commerce media is and how to implement it.
In just five years, retail media exploded from a $1B market to a staggering $30B, according to eMarketer, and such substantial growth has now thrust commerce media into the spotlight. Commerce media is a highly lucrative and untapped channel with tremendous potential, forecasted to drive over $280B for advertisers in higher ROAS by 2026. Marketers, publishers, and consumers all benefit from commerce media as it enables accountability, consumer privacy, first-party data, targeting insights, and more -- which is why there is no sign of it slowing down.
Both marketplaces and non-retailers must keep up. This guide breaks down everything there is to know about commerce media: what it is, examples, and the opportunities ahead.
Criteo defines commerce media as, “advertising that connects shoppers with products and services throughout the buying journey across both physical and digital touchpoints, linking advertising investment directly to transactions.” Digiday has dubbed commerce media as retail media’s “bigger cousin” in that commerce media is similar to retail media, but includes more verticals than retailers exclusively.
Commerce media focuses on online spaces where shoppers are commonly found all across the buying journey -- from product research to comparison shopping. It expands on retail media by including not only retailers, but also a broad network of ecommerce publishers across the open web. Commerce media empowers non-retail and non-endemic advertisers to leverage commerce data to engage audiences.
Commerce data is a set of purchase and intent data that gives insight into consumer behaviors and journeys and can be used to deliver superior outcomes. Examples include page views, products added to cart, clicks, and visitor IDs.
Basically, commerce media brings together marketers and media owners, all in an effort to deliver customers more engaging, personalized experiences by leveraging extensive data sets for in-depth targeting insights, all with closed-loop measurement.
Although commerce media comes on the heels of retail media’s success, the two are not interchangeable. Commerce media frequently gets confused with retail media or even performance marketing, but it’s crucial to recognize that commerce media is an evolution of retail media, encompassing more than just retailers and following consumers throughout the entire purchasing journey.
Commerce media expands upon the retail media model by integrating a vast network of publishers that retailers wouldn’t ordinarily work with, and the two can also differ in execution. Let’s break down each to further understand how commerce and retail media differ and what they have in common.
Commerce media’s allure comes from its ability to expand the scope of traditional channels, the extensive and rich data necessary for commerce media, and the audience-first strategies that it employs. The best commerce media platforms are able to market this to their advertisers in a way that they understand based on their level of sophistication. The draw commerce media has on advertisers can be bucketed into four categories: attribution, incrementality, ad formats, and audiences. Let’s explore each of these.
Commerce media’s robust attribution capabilities are one of its primary draws. Commerce media’s first-party commerce data allows advertisers to measure and report on campaigns based on real-time consumer actions, creating a feedback loop that enables advertisers to continuously optimize campaigns and re-allocate money toward their most successful endeavors.
“Marketers use these signals for continuous optimization and planning subsequent campaigns, which creates an always-on, always-learning marketing flywheel that is the holy grail of advertising.” said Nexxen’s Subhag Oak in this Digiday article.
Commerce media is also transaction adjacent, meaning that brands can promote products or services within a retailer’s platform, marketplace, or across publishers on the open web. Having this kind of close proximity to transactions enables more precise and accurate attribution, offering insights that can help advertisers see a clearer picture of their true return on ad spend.
For more information on ad attribution and best practices for measuring it, check out Kevel’s guide here.
Another win for commerce media in advertisers’ eyes is in its potential for incremental growth. Let’s imagine you are an eBay seller who sells rings for $100. For an eBay search on “rings”, your organic product result is #50, near the bottom of the search results page. If you pay $20 per day to appear in the first row for the same “rings” search, and this spend then results in, say, two incremental sales per day, you’ll come out on top after paying just $20 for $200 in new sales.
In this sponsored listings example, the seller, or commerce media advertiser, benefits with more sales and a boost in product visibility. The publisher earns more money from the seller and the consumer receives the same user experience they’ve always had, without obtrusive ad placements or clicks that lead off-site.
Unlike traditional advertising, commerce media leverages dynamic and interactive ad formats which engage shoppers directly along the buying journey. This includes:
Advertisers like commerce media because they want dynamic ad formats that meet shoppers where they’re at, creating an engaging and immersive customer journey. Commerce media bridges this gap between discovery and purchase.
What ad formats stand out on a commerce media platform?
Today’s commerce media platforms offer a variety of engaging ad formats that make the most of text, images, animations, and video to captivate consumers. Here are some of the best ad formats to stand out on a commerce media platform:
Finally, commerce media empowers both buy- and sell-side players to make the most of their first-party data. “A drug store retailer, for example, can provide supplementary product recommendations based on past purchase history,” Subhag Oak explained. “Such as recommending tissues to someone who recently purchased cold medicine.” This data-driven approach makes for better, more insightful audience targeting across various platforms, while also building opportunities for advertisers to reach new audience segments.
“Commerce media helps brands advertise in places where consumers are already spending their time within the correct context,” Oak added. “For example, Uber and Lyft could show ads to travelers purchasing airline tickets on Delta.com so they are prepped to book rides to and from the airport.”
Commerce media benefits marketers, media owners, and consumers by leveraging rich first-party data and personalizing the shopping experience. Each party gains unique advantages from a commerce media strategy; let’s take a detailed look at these benefits.
Marketers
Publishers / Media Owners
Consumers
Amazon is the top retail media network on the market, and their commerce media platform helps online retailers reach prospective shoppers looking for similar products. Amazon offers sponsored ads and keywords to help make products more discoverable, driving ROAS and performance for their advertisers.
Ebay is another example of an exclusively online retailer that has emerged triumphant in the commerce media space. As of Q2 2023, the online auction platform saw $367M in ad revenue, totaling a 35% increase in growth YoY. Improved measurement capabilities, including eBay’s halo attribution, and updates to their ad types have helped the platform find retail media success -- particularly, in the fashion, home, garden, and electronics sectors.
Global food delivery giant, Delivery Hero, exemplifies another successful implementation of a commerce media platform. With operations in over 70 countries, the Delivery Hero team partnered with Kevel to create a flexible ad platform that could launch and scale native ad solutions across Asia and Europe. Since Q2 2023, Delivery Hero has seen 16% YoY total segment revenue growth and 15 new markets.
Launching a commerce media strategy can be a big leap, but with the right approach and resources, it can yield substantial revenue growth and better customer engagement. Here are three technology options for building your commerce media platform:
Traditional retail media solutions offer a convenient way to enter the commerce media space, with turnkey solutions that make for quick integrations and ad placements. If you want to start generating revenue quickly, these solutions are certainly the fastest. But bear in mind that black-box solutions mean going without extensive in-house capabilities and oftentimes lack customizable or engaging ad formats. Depending on the solution, black-box commerce media solutions could also become expensive or even hinder growth due to ongoing fees or revshare models.
Building a commerce media solution in-house offers the greatest opportunity for customization and flexibility, as brands can tailor the platform to meet their specific business needs and ensure every aspect aligns with their branding and goals. However, this approach also requires significant upfront costs in time and money -- building an ad platform yourself typically requires expertise in the form of a dedicated team and could still take years to launch. It’s important to note that following launch, an in-house build will still require ongoing maintenance in both time and money.
Kevel offers a more balanced approach, providing both flexibility and customization without the extensive time and cost investments. The Kevel Retail Media CloudTM is the only solution that allows you to build an in-house ad platform without building from scratch at scale.
Kevel takes the risk out of building your own custom ad platform through flexible tools with cutting edge decisioning, ad formats, targeting, and site performance. If you want to keep your data and launch high-performing ad units, all with closed-loop attribution in as little as 14 days, contact us today.
For more info on retail media, visit our quick guide here or download our eBook on Launching Your Own Retail Media Network.
