Elevating Your Marketing Strategy: Understanding Commerce Media vs. Retail Media

Finding the latest and greatest methods to grab the attention of your desired target market is a marathon, especially for online brands and those operating in commerce or e-commerce. The commerce sector is transforming at an exponential rate, rising from the increase of online shopping during the pandemic.

According to ARTS, e-commerce sales grew by 43% in 2020, rising from $571.2 billion in 2019 to $815.4 billion in 2020. As advertisers look for new ways to appeal to this market, this is where the term “commerce media” enters the picture. However, there are many who interchangeably use “commerce media” and “retail media.” So, let’s show you in no uncertain terms, the difference between the two.

What is Commerce Media?

Commerce media revolves around the idea of using digital platforms to promote products within the e-commerce industry and incorporates elements of:

Brand marketing is a top-funnel form of promotion that delivers ads to optimize reach and impressions.

Performance marketing focuses on the bottom of the funnel and prioritizes generating conversions, such as leads, clicks, and downloads.

It also incorporates retail media, which we shall explain further below, but some of the fundamentals of commerce media include:

• It is used for discovery, conversion, and retention during the entire sales funnel journey.
• Encapsulates a variety of formats and channels.
• Includes ads on publisher’s sites, in addition to retailer’s sites across the internet.
• Utilizes large-scale first-party commerce data.
• Can directly connect marketers and media owners, therefore connecting the supply and demand for closed-loop measurement.
• Commerce media aims to utilize retail media, brand marketing, and performance marketing all in one, widening the fields to incorporate non-retail businesses, and ensuring media owners and advertisers control how they engage audiences.

Commerce media integrates components from brand marketing, performance marketing, and retail marketing with the aim of achieving full-funnel goals, using first-party data and a diverse array of formats and channels, such as video and CTV (a form of digital advertising that appears within streaming content) through to contextual and sponsored product advertisements.

A significant distinction between commerce media and retail media lies in the fact that commerce media extends beyond the retail media framework by encompassing a wide network of publishers across the open internet. Commerce media goes even further as it empowers both retail and non-retail advertisers, as well as non-endemic ones, to leverage commerce data and AI for more efficient audience engagement across these publishers and retailers.

One amazing example of commerce media in recent years has been the expansion of Uber’s advertising surfaces on the Uber Eats platform. This has enabled CPG (Consumer Packaged Goods) brands to buy sponsored items directly on the Uber Eats app, allowing these brands to unlock Uber’s full potential and expand Uber’s CPG partners’ portfolio of products.

What is Retail Media?

Retail media can be defined in a broader term and refers to any form of promotional marketing placed by brands near the point of sale. This can be on an e-commerce website or even in a physical store environment.

Retail media is often bought by brands that are selling goods on the retailer’s e-commerce website or in-store. It may also be bought by other advertisers looking to reach certain consumers and are using retail sites similarly to other types of outlets.

The main factors of retail media can incorporate some of the following:

• Usually operates on a full-funnel capacity.
• Can utilize first-party commerce data; however, the scale is smaller than that of commerce media because it does not include inputs from other sites.
• Can offer on-site ads, depending on the retail media provider.
• Can connect both supply and demand as the retailers and brand advertisers are connected.
• Does not work for non-retailer advertisers because it is focused on helping brands that sell products on retail platforms.
• May not offer off-site ads in a variety of formats.

With many different large-scale companies turning their platforms into retail media networks, there are countless examples, but one of the biggest companies to turn their hand to retail media has been Amazon. With Amazon accounting for 33% of the total digital retail media spending worldwide in 2022, it is clearly a force to be reckoned with in retail media.

Amazon Advertising offers the ability to maximize marketplace sales. Similar to Google Ads, Amazon uses a self-service platform that allows brands to bid on keywords and only pay whenever an ad is clicked. Amazon also provides video, audio, and sponsored display ads across its network, covering three different main ad types:

• Sponsored product ads appear alongside organic results when shoppers conduct a search.
• Sponsored brand ads display a brand’s logo alongside a selection of products.
• Sponsored display ads, which showcase a brand and target shoppers based on their behavior and demographics, rather than using keywords.

What Is the Difference Between Commerce Media and Retail Media?

While both terms are used interchangeably, the notable difference between the two is that commerce media is, effectively, expanding on the retail media model.

• Retail media allows retailers to monetize first-party data and audiences to create a new revenue stream and involves a brand displaying ads for the products on a retailer’s website, which is shown to consumers to build brand awareness, but most importantly influence the customer at the point of purchase.
• Commerce media works to allow both retailers and brand partners to reach audiences across the web, not just on a retailer’s digital platform. This means that there is far more scope for commerce media over retail media.

Conclusion

Understanding the key differences between the two is tough; however, commerce media and retail media both utilize different approaches. Understanding what is best for an individual retailer will ultimately require understanding the end goal.

Commerce media allows retailers and brand partners to reach audiences across the web, but retail media is specifically related to a retailer’s website.

While there is some key crossover between the two, and there can be advantages to both, if you are looking to widen the field and utilize greater capabilities of brand marketing, performance marketing, and retail media, commerce media appears to be more comprehensive in scope, giving all types of businesses their time to shine.