In some advertising circles, you may have started to see the “commerce media” phrase bubbling up. That’s because it’s a new approach to digital advertising that’s changing how commerce is done. But commerce media is one of those deceptively simple sounding terms—when pressed to explain it, most are left scratching their heads.

There’s good reason for that. For as simple as it sounds, commerce media is a multi-faceted advertising approach that is still very new. We break it down here, with a definition and a look at the trends behind commerce media.

Commerce Media, Defined

When defining a broad term such as this one, it’s helpful to break it down first.

Let’s look at the individual words of the phrase through the lens of digital advertising:

Commerce: Online activities that relate to the buying and selling of goods and services, both online and in-store. This includes all touchpoints with a consumer from discovery through conversion that inform their decision and lead to a commerce outcome, such as a sale or signup.

Media: The digital advertising channels that reach or influence people with promotional content. This includes but is not limited to paid display, paid search, retail media, video and CTV, and social media.

If we put those together with one key addition – commerce data and intelligence – we arrive at the final definition for commerce media:

Commerce media: A new approach to digital advertising that combinescommerce data and intelligence totarget consumers throughouttheir shopping journey and help marketers and media owners drive commerceoutcomes (sales, revenue, leads).

The key is having large-scale commerce data (purchase and intent data), applying it to enrich audiences and add relevancy, and connecting it to media to deliver the right ads in the right place.

It’s also about delivering relevant ads at all stages from discovery, to consideration and conversion, while driving measurable commerce outcomes at each stage.

And it’s not just for marketers. Commerce media is also the means by which media owners (publishers and retailers) can activate their first-party data and inventory and package it for advertisers to drive commerce outcomes.

If you take the 30,000-foot view, commerce media is a virtuous circle where marketers, media owners, and consumers all mutually benefit.

Amazon is proof of concept that commerce media works. But shopping doesn’t begin and end on Amazon (in fact, more shopping in the world happens on the open internet), which means that commerce media doesn’t, either. Marketers, publishers, and retailers can also use commerce media to help them connect with each other and with consumers at all the places they shop outside of Amazon.

Commerce Media is…

…about using commerce data (transactions, intent) to inform marketing decisions, improve targeting, create efficient, effective ads, and deliver richer consumer experiences.​

…only possible with intelligence that can analyze and apply commerce data to deliver richer consumer experiences.​

…for marketers and media owners. It helps all parties increase digital advertising returns by bringing consumers to brands, audiences to publishers, and brands to retailers.

…not just about retail ecommerce. It works for all other online commerce such as travel, real estate, automotive, and any industry where commerce outcomes can be tracked.​

… full-funnel. It reaches consumers from discovery through to purchase.​

…omnichannel. It can drive online results anddrive in-store visits and sales.​

…trackable to desired outcomes, to see the direct impact of digital campaigns on KPIs.

…open. Commerce media connects marketers and media owners on the open internet, where control and transparency reign. Essentially, it creates an open internet marketplace.

The Trends Fueling the Rise of Commerce Media:

  • Ecommerce is booming: The COVID-19 pandemic brought the world online to shop, and their new online habits will continue post-pandemic. Worldwide ecommerce is predicted to approach $5T in 2021.1
  • How we can connect with consumers is changing: Growing privacy regulations and third-party cookie deprecation have marketers and media owners looking for new ways to reach and monetize audiences that are shopping online more than ever.
  • First-party data is a huge opportunity for retailers: Because of the point above, marketers are focused gathering and scaling first-party data. Connecting with retailers can be a win-win for both parties.
  • Trade marketing is shifting to digital: Brand dollars are following their consumers online. 92% of EU and 76% of US brand advertisers say their growth depends on retail media advertising.3

Commerce Media Today and Tomorrow

Today, commerce media on the open internet is fragmented, with demand side platforms (DSPs), supply side platforms (SSPs), and retail SSPs all operating separately. But as privacy regulations continue to grow and third-party cookie deprecation looms, marketers and media owners will be looking for more streamlined solutions to manage, scale, and activate first-party data and addressable audiences. Expect to see the commerce media space quickly advance along those lines to make it easier for marketers and media owners to work together to bring richer experiences to consumers.

Click here to download The 2021 Digital Advertising Manual.

Ann Pyle

Ann revels in finding the simplest and clearest way to convey a thought. Her favorite word is 'moxie', which she tries to embody whenever possible. When not writing, she's raising three daughters with her husband or escaping to the woods to hike, camp, or bike.

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