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Commerce media networks (CMNs) are experiencing extraordinary growth, outpacing display, connected TV and search. McKinsey projects that by 2027, the U.S. commerce media market will reach more than $100 billion, with nearly half of advertisers planning to increase their spending in commerce media in areas beyond retail media.
But what, exactly, is the difference between commerce media vs. retail media? What’s driving the evolution from RMNs to CMNs? And how do these media networks solve brand marketers’ challenges?
Just like brands have paid top dollar to get their products in prime shelf spots in grocery stores (think eye-level shelves and endcaps), retail media networks began by taking this concept to the digital realm.
When a consumer visits a grocery retailer’s website, there are prime spaces on the website where consumers are more likely to see (and ultimately purchase) a product. This is a win-win for brands and retailers, as retailers can monetize their ad space, and brands can get face time with consumers.
However, a very small number of people shop organically on a retailer’s website regularly (10% to 20%). The best retail media solutions have therefore expanded their offerings to include off-site and in-store products to reach shoppers across channels and throughout their shopping journey. Retail media can now happen anywhere in-market consumers are, and it links ad spend directly to sales, closing the loop when it comes to reporting.
As retailers and their brand advertisers have grown their ROI through retail media, commerce media has emerged to widen the playing field for other types of businesses, from financial services to travel to healthcare.
Modern retail media looks different from its original counterpart, and commerce media provides a few additional advantages. It’s important to understand both the modern definitions and distinctions between the two types of media networks.
Retail media refers to an advertising platform that allows brands to access the retailer’s first-party data to reach consumers with targeted, contextual and highly relevant messaging—on-site, off-site and in-store. RMNs connect transaction-level data and media impressions to brand sales, allowing advertisers to close the loop on reporting and accurately measure performance (beyond awareness and assumed ROAS).
Commerce media expands retail media to allow any business in commerce to monetize their customer data for partner brands and/or related industries—just like a retail media network does for its CPG brand partners. However, there are two key differences between commerce media and retail media.
First, these advertisers are not selling a product directly through the retailer (like a brand through a retail media network). CMN advertisers are accessing a specific target audience through the CMN to sell their own related products.
For example, United Airlines’ commerce media offers access to a travel audience, which is particularly valuable to brands with an aligned product offering, such as hotels, restaurants, attractions, tourism bureaus, event venues, etc. In addition, many brands with lifestyle products are happy to reach certain subsets of United’s audience, like Burberry advertising to business- and first-class passengers on a trip to London.
Second, CMNs also extend the targeting and activation capabilities of an RMN to a new set of touchpoints in the customer journey. Continuing with the United example, they can not only reaches travelers on United’s website and in United’s app, but advertisers can also reach travelers with personalized messaging on their seatback screens. This allows advertisers to adjust messaging based on each traveler’s literal journey stage.
Both modern retail media and commerce media solve perennial challenges for marketers, including reaching the right shoppers, minimizing ad waste, delivering stronger results and offering better media measurement.
Both retail media and commerce media networks solve the critical challenge of reaching the right people. Traditional media approaches rely on broad, cookie-based audiences that often miss the mark. In contrast, modern media networks leverage retailer and business first-party data to identify and reach shoppers with precision.
Media waste occurs when campaigns target the wrong people or hit the same person multiple times across different devices and channels. Both retail media and commerce media networks address this through person-level identity management and AI-driven optimization.
It’s no surprise that reaching the right people with minimal ad waste would deliver stronger results for brand advertisers, but a recent BCG survey proves it. The survey found 86% of buyers say commerce media powered by first-party data drives higher performance than other forms of digital advertising.
Both retail media and commerce media can tie individual interactions back to actual transactions, providing real ROAS tied to verified transactions rather than assumed performance. This closed-loop measurement connects digital and in-store interactions to real purchases, offering transparent performance measurement that builds trust and drives long-term investment.
Retail and commerce media networks can do a lot of things for brands, retailers and shoppers, so why are some better than others? To build a media business that delivers real ROI to customers and partners, look for a media platform that offers three key differentiators:
Related content: 3 strategies for a successful retail media network.
As commerce media continues its rapid expansion beyond traditional retail boundaries, the fundamental principles of success remain consistent:
Whether you're operating a retail media network or exploring commerce media opportunities in travel, finance or healthcare, the businesses that prioritize accurate identity resolution, omnichannel activation and closed-loop measurement will capture the greatest share of this $100+ billion opportunity.
Want to see how leading retailers and commerce businesses are building successful media networks? Connect with Epsilon today to discover how our retail media solutions can help you unlock unique audience reach, optimize campaign performance, and prove real ROI to your brand partners.
This article was originally published on December 13, 2023, and has since been updated.
