Commerce Media vs. Retail Media: Everything You Need to Know

Over the past three years, a wave of economic, cultural, and technological shifts has accelerated the retail industry’s already rapid digital transformation. It has also opened debate around two growing ad channels: commerce media vs. retail media.

Retail giants like Amazon, Walmart, Kroger, and Target pioneered the use of first-party data to influence shoppers with ads at the point of purchase. This retail media model is now inspiring businesses across industries to monetize their own data and audiences.

By expanding into commerce media, non-retail companies are leveraging their unique insights to help advertisers target consumers effectively across the open web.

Read on for more insights into:

• The nuances of commerce media vs. retail media
• Which offering is best suited to different retailers and media owners
• How advertisers can decide which strategy to implement

Commerce Media vs. Retail Media: A Subtle Difference

As McKinsey has noted, retail media is a transformative advertising force that has grown over the past three years as a “harbinger of the commerce media trend.” Emarketer predicts retail media will account for almost a quarter of all US media investment by 2028.

So, if retail media is a subset of a larger industry trend, then what exactly is commerce media? Let’s break down the differences below:

What is Retail Media?

Retail media most commonly refers to ad placements on a retailer’s ecommerce site or app. These ads generate product awareness and influence buying decisions both before and after the shopper clicks the checkout button. Retailers tap into their own first-party data to deliver relevant ads to customers based on demographics, shopping habits, buying history, and product SKUs. 

In addition to ads served within the retailer’s owned channels, retail media enables brands to buy off-site ads across third-party publishers and in-store digital ads, such as product displays and video screens. This creates an opportunity for retailers to monetize their customer data beyond their own platforms.

What is Commerce Media?

Commerce media widens the scope of retail media. It gives any business with first-party, purchase-based data new opportunities to engage and monetize their audiences. Similar to retail media, commerce media follows the “open internet” concept, allowing brands to serve ads across the whole internet programmatically.

Here’s the key difference: While retail media relies on first-party data gathered via a specific retailer’s website, commerce media augments first-party insights with inputs from other publishers and brand sites. This creates a more holistic view of the customer, offering the quality and scale needed to engage audiences across the digital ecosystem.

Commerce Media vs. Retail Media – Which is the Better Choice for Retailers & Merchants?

Whether you’re a large legacy retailer or a “commerce intermediary” like Uber Eats or DoorDash, any business with access to transaction data can stake its claim within the evolving commerce media landscape. Learn which types of companies are best suited to launch retail or commerce media offerings below.

The Best Candidates for Launching a Retail Media Offering

Generally speaking, any online store with first-party data from millions of daily web visitors has the scale to launch its own retail media network (RMN). An RMN is a digital advertising platform that allows retailers to sell ad space on their owned channels or through third-party publishers. These may include a retailer’s websites, mobile apps, email channels, stores, or partner assets like social networks and CTV.

Take drugstore retailer, Walgreens, for example. According to Adweek, the brand’s scale is enormous: its network reaches over 9,000 stores and nearly 100 million loyalty members. From digital marketplaces and mass merchandisers to category specialists in areas like grocery and beauty, retail media spans a broad spectrum of merchants. Here is a growing list of retailers that have launched their own RMNs.

The Best Candidates for Launching a Commerce Media Offering

While not every business has the scale or resources to launch its own retail media network, there are plenty of opportunities for non-retail businesses to capitalize on the growing commerce media trend. Here are a few examples of “media owners” outside the Amazon/Walmart camp that are well-positioned to get into the commerce media game.

Financial Services

Financial institutions like Chase and PayPal are launching their own ad businesses with financial media networks (FMN). These companies have access to retailer-agnostic customer spending histories, allowing for more holistic ad targeting. Many FMNs are also built on top of existing rewards programs and have built-in reward functionalities alongside advertising.

Travel

From hotels to airlines, the travel industry is capitalizing on insights into who consumers are and where they’re going. For example, Marriott and Expedia are leveraging their customer data to better target ads. United Airlines also recently announced the launch of the airline industry’s first “travel media network” – a channel that will allow advertisers to get in front of passengers on in-flight screens.

Commerce Intermediaries

Non-retail companies like Uber and Instacart sit on a wealth of data connected to ecommerce activity. These “commerce intermediaries” are launching their own commerce media offerings to help advertisers reach a captive audience with targeted offers as they wait for grocery deliveries or rideshare services.

Tips for Launching a Media Business

Building a media business is not without certain challenges. The media sales skill set is considerably different from straight ecommerce marketing. To overcome these hurdles, many businesses partner with ad networks and tech providers to integrate ads directly into their digital platforms.

These partners handle the technical aspects of setting up and running ad campaigns, allowing retailers to focus on their core business. For smaller companies, turnkey solutions like post-transaction ads offer a low-barrier entry point to leverage retail media without the complexities of building a full network.

When vetting potential retail media partners, refer to our checklist of top qualities and capabilities to look for below.

Commerce Media vs. Retail Media – Which is the Better Choice for Advertisers?

For most brands, whether they’re major CPG names or niche beauty and personal care companies, the best strategy likely involves using a mix of both retail and commerce media.

Use Cases for Retail Media

Retail media provides targeted reach for advertisers that sell products on retailers’ websites, as well as non-endemic brands. Think of it as an opportunity to reach consumers based on purchase history and browsing behavior directly within a retail environment where they’re predisposed to make a purchase.

Measurable results are a strong suit, as these networks furnish detailed data on ad performance, aiding campaign optimization and providing closed-loop attribution. Furthermore, they offer cost-effectiveness for broad-scale consumer outreach.

Use Cases for Commerce Media

Commerce media networks extend the reach of marketers’ products across diverse publishers and websites. This offers a new level of addressability covering all the various stages of a consumer’s path to purchase.

Access to extensive consumer behavior data allows for a more holistic view of shoppers. Additionally, these networks grant flexibility in ad formats and targeting options, enabling more engaging campaigns.

A Hybrid Approach

The choice between networks — and how to use them effectively — depends on the primary goal. Retail media best suits brands seeking to engage consumers at the point of purchase. For brands interested in reaching consumers at various stages and across multiple platforms, commerce media provides reach and flexibility.

Adopting a hybrid retail/commerce media strategy can work on a number of levels. For example, a retailer may advertise with a financial media network, a CPG brand with a retailer, and an apparel brand with both.

What’s Next for Retail, Media, & Advertising?

The connections between online and offline shopping and how advertising reaches consumers changed long ago. But in the last three years, traditional and upstart retailers have adapted to those changes. And the benefits are far-reaching:

• Retailers are learning to think more like media partners, leveraging customer data and untapped site inventory to unlock new revenue streams.
• Advertisers are reaching targeted consumers with premium ad inventory across the customer journey.
• Consumers are receiving more personalized product recommendations and shopping experiences aligned to their needs and preferences.

Even as retail and commerce media become firmly established tools in the digital advertising ecosystem, there is still room for experimentation. But these two channels will undoubtedly continue to reshape the consumer journey.

Ready to capitalize on this growing opportunity? Learn more about Fluent’s commerce media solutions here.

Check out more resources to get fluent in:

Commerce Media | Retail Media | Post-Transaction Advertising