Commerce media is poised to reshape the future of digital advertising, unlocking the power of first-party transaction data for businesses to create targeted, impactful campaigns. Born from the explosive growth of retail media networks (RMNs), commerce media now extends into a wide array of industries, from financial services to travel, driving new revenue streams and redefining consumer engagement.

But what exactly is commerce media, and how can industries capitalize on this growing opportunity? This guide will define commerce media, explain its significance, and outline strategies for success in this increasingly competitive space.

 

What is Commerce Media?

Commerce media refers to digital advertising powered by first-party transaction data. This data, collected from consumer interactions such as purchases, allows advertisers to target audiences with unparalleled precision. 

Unlike traditional publishers, whose main business is selling ads, commerce media networks use ads as a secondary revenue stream. They focus on leveraging owned and operated channels (like websites and apps) and off-site platforms (like Google or Instagram) to monetize consumer behavior effectively while still prioritizing their main business. 

 

Commerce Media vs Retail Media: What’s the Difference?

Commerce media encompasses retail media: retail is simply one vertical and channel by which commerce media occurs. Retail media is when a retailer promotes brands sold within retail ecosystems, whereas commerce media contains other verticals including financial services, travel, and delivery apps with a broad range of advertiser types. These industries are finding ways to utilize first-party data for both on-site and off-site ad targeting.

The broad nature of commerce media means some networks will appear more similar to retail media, and some will stand out with unique attributes. A few key differentiators include:

1. Campaign goal types: Brands advertising with retail media networks are looking for performance. They often shift their shopper marketing dollars to boost their sales through sponsored listing campaigns. Because some verticals within commerce media are not advertising at the point of purchase (like a bank), or expect longer sales cycles (like a car marketplace or house listings platform), brands might be willing to contribute brand budgets to these platforms. This opens up new and exciting measurement opportunities for commerce media networks beyond simply ROAS. 
2. Advertiser types: While retailers can introduce non-endemic advertising (aka advertising something that isn’t sold via the retailer), it can be difficult to integrate seamlessly. Often, users can perceive these ads as irrelevant. However, non-endemic retail advertisers can be relevant within a commerce media network, allowing new networks to earn ad spend in a less competitive pool of advertisers. Even if the ad is non-endemic to the commerce media network, there might be placement opportunities that still appear relevant to the user experience.
3. Data: Retailers have a breadth of data that is exciting to advertisers– impactful activations through machine learning-generated audiences and relevancy can generate clear advertiser returns. However, other verticals within commerce media can have access to even more data. A retailer only sees purchases that happen on their website and in their stores– a bank sees every purchase. This cross-merchant purchase behavior data is a gold mine to advertisers, especially those offering services instead of products alone.

 

 

Why Commerce Media Matters Now

Retail media clearly proved the value of commerce media. In 2024, retail media captured 20% of U.S. digital ad spend. As retailers and commerce companies create inventory, advertisers are spending. This dominance showcases the potential of leveraging first-party data to drive results. 

Similarly, commerce media is a win-win-win for publishers, advertisers, and customers alike. 

Publishers get:

• Increased overall revenue through new ad spend
• Improved relationships with vendors if they see sales growth
• Customer retention through relevant ads

Advertisers get:

• Clear attribution
• Likely-to-convert audiences
• Incremental sales lift measurement

Shoppers get:

• More relevant ads 
• A unique experience based on their custom interests
• The potential for discounted prices (Amazon is able to win customers because their ad margin makes up for lower prices)

 

Commerce Media Platform Types

Because retail media sees such great success, similar industries are eyeing commerce media as a transformative opportunity to enhance their advertising strategies. 

New verticals offering commerce media include:

• Financial services: Banks and payment platforms like Chase and PayPal are establishing financial media networks (FMNs) to leverage their holistic view of consumer purchase behavior. By 2026 FMNs are projected to grow to $1.5B. 
• Online travel agents: Online travel agents (OTAs) are tapping into first-party travel data to strengthen ad targeting and reach consumers in upper-funnel settings.
• Delivery apps: Platforms like Instacart and Uber Eats excel by combining granular SKU-level data with cross-merchant insights, offering advertisers a unique blend of scale and precision.
• Auto marketplaces: Car marketplaces offer a unique opportunity to advertise at a key point of purchase. The customer likely will buy and not return for several years, so advertisers are motivated to spend extra to influence this important decision.

These industries demonstrate the versatility of commerce media and its potential to revolutionize digital marketing across sectors.

 

 

 

Difficulties Within Commerce Media

Though commerce media remains a large opportunity for retail media networks and non-retail verticals, if these new networks can’t spark advertiser interest and retention, commerce media growth will disappear as quickly as it arrived. While commerce media offers tremendous potential, non-retail industries face unique obstacles such as:

Limited Scale

Unlike retail giants, which see high traffic and extensive purchase data, non-retail verticals may struggle to match these metrics. When comparing the largest bank to the largest ecommerce site, ecommerce sees billions more monthly site visitors and page views. High traffic is a key motivator for advertisers, and without that, it can be difficult to entice them.

Consumer mindset

Shopping environments naturally lend themselves to advertising. A customer browsing Target’s website is likely to buy soon. However, platforms like travel or finance may need to work harder to make their ads contextually relevant and engaging to avoid alienating users. Someone who just paid rent via a finance app, for example, might not be looking to drop extra cash on a product from an ad served to them. 

Advertiser skepticism

Retail and commerce media networks often operate in walled gardens, creating fragmentation and inconsistencies amongst them. Advertisers grow frustrated dealing with various campaign structures and inconsistent measurement standards. The ANA reports that advertisers view retail media network measurement as 47% weaker than other options in the market. If measurement does not improve, advertisers will move on. Simplifying this process will be critical for attracting long-term investments.

Additionally, many advertisers have long-standing relationships with retailers that make it easy for them to spend more with their partners. New networks may have to work harder to attract brands with whom they do not have a prior relationship.

Consumer fatigue

Customers can be wary of digital advertising, especially when ads stand out and distract from organic content. While a sponsored listing might appear native alongside organic listings as a consumer browses through Amazon, an ad that appears out of place can be off-putting to users. 

This can be especially damaging if users feel their data is not respected by these companies. When companies lack transparent data practices, it can cause a PR nightmare and customer outrage.

Competition

Within retail media, Amazon owns ¾ of the market, and Walmart is a distant but clear second. The rest of the space is highly competitive, even for commerce media entrants. Many emerging networks will be capturing new advertisers who wouldn’t have run ads on retail media networks– a hotel running on a travel site wouldn’t run a sponsored listing on a grocery store platform. However, there are areas of overlap, especially between financial services and retail media. New entrants will need to stand out from the crowd and appeal to their advertisers in new and creative ways.

 

Key Strategies for Commerce Media Success

How will new networks appeal to advertisers? The following are actionable strategies for success:

Stand out from the crowd

New entrants will need to prove their unique value propositions and demonstrate performance quickly to win and retain ad dollars. This looks like launching unique ad formats, audience segments, and measurement abilities to drive advertiser adoption. It’s important to offer something special that advertisers lack with their existing partners. 

Focus on Transparent Consumer Relationships

With data privacy concerns on the rise, building trust is paramount. Marketers must:

• Educate consumers on how their data enhances their experience.
• Offer clear opt-in/opt-out options to build lasting loyalty. Transparency is foundational to sustainable commerce media growth.

Invest in Programmatic Advertising

Leveraging programmatic tools like demand-side platforms (DSPs) and supply-side platforms (SSPs) can simplify media buys and open up new opportunities. These tools allow for:

• Frequency capping to reduce ad fatigue.
• Cross-platform inventory access for diverse campaigns. By streamlining processes, programmatic advertising can help advertisers scale effectively.
• Simplified scale

Drive Collaboration Across Ecosystems

No single company can dominate this space alone. Building partnerships with technology providers, agencies, and non-endemic brands will be key to scaling and innovating within this ecosystem.

 

Unlocking the Future of Advertising: The Rise of Commerce Media

Commerce media represents one of the most significant shifts in digital advertising, poised to claim an even larger share of global ad spend in the coming years. Companies that launch early and iterate quickly will rise to the top of ad budgets. By leveraging first-party data, focusing on transparency, and embracing programmatic capabilities, brands can create meaningful consumer experiences and achieve measurable results.

The question is no longer whether commerce media is the future—it’s how prepared your business is to capitalize on this opportunity. With industries like financial services, travel, and intermediaries proving the model’s viability, the time to innovate and invest is now.

Ready to become an industry leader? Get certified in commerce media at the Koddi Academy, or contact us today for a personalized demo of our product.