Commerce media vs. retail media: a quick guide for advertisers and marketplaces
In 2024, retail media grew so quickly it represented a fifth of global advertising spend. This year, the continued rise of digital retail and the growing importance of first-party data are transforming the relationships between advertisers, retailers and online shoppers.
One of the most talked-about developments in this space is the distinction between commerce media and retail media. These two terms are often confused, with some even using them interchangeably, but each represents a unique approach to leveraging data.
This blog will break down the differences between commerce media and retail media, providing clarity on their functions, benefits and challenges for advertisers and marketplaces.
What is retail media?
Retail media refers to advertising opportunities available on a retailer’s owned properties, such as their eCommerce website or mobile app. Think of it as the digital equivalent of “prime shelf space in a physical store.” These ad placements are optimized for relevance and product quality (e.g. product rating, best sellers) and further targeted using first-party data (e.g. shopping habits and purchase history) to deliver products to consumers ready to buy. When leveraged correctly, retail media strategies can help retailers create powerful flywheel effects that allow their marketplaces to grow at scale.
Key features of retail media:
Proximity to Purchase: Ads appear where buyers are most likely to convert — on the retailer's point-of-purchase platforms.
Data-Powered Targeting: Retailers use rich first-party insights from their customer base to offer highly relevant ads.
Performance Tracking: Retail media links advertising spend directly to sales, making it easy for brands to measure return on ad spend (ROAS).
Expansion Beyond On-Site: Some retail media networks include off-site ads across third-party publishers, in-store digital displays and even connected TV (CTV).
Examples of retail media networks:
Amazon Advertising: A pioneer in retail media with its sponsored products and display ads.
Walmart Connect: Offers both on-site and off-site ad capabilities to target Walmart shoppers.
Retail Media Tech Partners: Some retailers, like Shop Simon and Best Buy, leverage third-party tech — such as Mirakl — to run retail media networks on their marketplaces.
Retail media is a powerful tool for endemic brands that sell directly on a retailer's platform, helping them connect with consumers at critical purchase moments.
For example, sporting brands like Adidas, Nike, or Puma can leverage retail media to increase their visibility to shoppers who are searching for sneakers on marketplaces like Macy’s.
What is commerce media?
Commerce media takes the concept of retail media to a broader level. It encompasses advertising powered by transactional data across multiple sources, not limited to a single retailer. This means businesses beyond retail, such as financial institutions, travel companies and delivery services, can leverage their first-party data to target and engage audiences across the open web.
Defining commerce media:
Data Aggregation: Uses data from various sources, including multiple retailers and publishers, to create a holistic view of the customer.
Audience Targeting Models: Commerce media platforms propose targeting audience clusters such as “young professionals,” “tech lovers,” or “parents,” based on age, gender, geographic location and overall internet behavior. It does not, however, focus on actual buying history — such as purchasers of a specific category, brand, or similar products — like retail media does.
Non-Endemic Opportunities: Even non-retail businesses like Uber Eats or Marriott can engage in commerce media using their unique customer data through what are called non-endemic ads.
Commerce media expands the reach of advertising, enabling network-scale campaigns powered by connected data. For instance, a travel company can use commerce media to target vacation-goers across different channels, influencing every stage of their trip planning process.
Key similarities and differences between commerce media and retail media
Both commerce media and retail media rely on first-party data. Here are a few important similarities and distinctions:
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Retail media tightly ties advertising to product sales on a retailer’s platform, while commerce media allows deeper customer engagement across a wider range of advertising channels and purchase stages.
Benefits of commerce media and retail media
Retail media advantages:
Sales-Driven Outcomes: Retail media networks provide brands with quantifiable ROI tied to product sales.
Ease of Use: Retailers often offer turnkey solutions for brands, making it easier to advertise effectively.
Enhanced Personalization in a Cookieless World: With Safari and Google phasing out third-party cookies, retail media leverages first-party data to ensure highly-relevant customer interactions without reliance on traditional tracking methods.
Commerce media benefits:
Scalability: Commerce media can aggregate data from multiple sources to unlock broader reach and targeting.
Audience Insights: By examining data across industries, advertisers gain a more complete picture of consumer behavior.
Versatility: Suitable for businesses that don’t operate a retail platform or sell physical goods, but want to monetize the audience.
Challenges and considerations for commerce and retail media
Retail media challenges:
Technical Complexity: Operating a retail media network requires robust infrastructure, often necessitating .
Customer Experience Risks: Poorly executed ads can harm the shopping experience, deterring loyal customers.
Commerce media challenges:
Data Integration: Aggregating and interpreting data across multiple sources can be both complicated and resource-intensive.
Consistency: Ensuring a unified, privacy-compliant experience across platforms needs strategic oversight.
Cookie Deprecation: The loss of third-party cookies limits traditional audience tracking, making it harder to deliver personalized ads.
Both approaches require businesses to balance maximizing ad revenue with maintaining a seamless user experience.
The future of commerce and retail media
Commerce and retail media are expected to continue reshaping digital advertising in profound ways. Analysts predict the sector will generate over , solidifying their roles as go-to tools for advertisers. Emerging innovations and advanced machine learning for real-time personalization will only enhance relevancy and returns.
Marketplaces and advertisers alike are starting to realize that the customer, not the channel, is the true focus. Success lies in understanding the nuances of commerce and retail media, determining when to use each, and investing in strategies that prioritize customer experience.
By understanding the key differences and applications of each strategy, marketplaces and advertisers can maximize returns while delivering meaningful consumer experiences.
