You’ve already seen it in action if you stream content on a smart TV. It’s there in your social media feed, showing ads that don’t resemble a regular pitch. It may be presented as an interactive survey or a customizable product ad with a QR code. What you’re seeing is commerce media, and it’s changing the retail landscape.
Specifically, it’s revolutionizing the online shopping experience, but it also has implications for omnichannel footprints. In addition, commerce media is transforming traditional media networks as brands with valuable first-party data can become a network. This article explores the revolution and some of its potential implications. Ready to learn more? Let’s get started.
Brands Can Harness Real-Time First-Party Data
One of the standout attributes of commerce media is the reliance on first-party data. While third-party sources are still used to drive traditional and digital campaigns, insights from first-party data give whatever entity has the information the power to segment and target shoppers.
With commerce media, this information can be collected while consumers are interacting with native and contextual ads. Segmenting audiences, targeting with personalized content, and assessing engagement now happen at every stage of the funnel. Brands don’t have to wait to measure whether content moves someone from awareness to purchase.
Essentially, the funnel’s timeline is compressed. Say an interactive ad for a company’s line of cocktails shows up on a consumer’s smart TV. They can choose to see a reel about ready-to-serve drinks, a new flavor, or a flagship product. The brand gathers data on someone’s product preferences based on their choice. Plus, the ad tracks whether the person makes a purchase or engages with additional content through a QR code.
Brands immediately learn what moves consumers through the funnel and where they’re losing interest. It allows companies to personalize to re-engage prospects and target individualized offers. Furthermore, commerce media gives entities the first-party data other brands may want to leverage. Any organization with valuable consumer information can become a retail media network.
Ad Spend via Retail Media Networks is Increasing
In a nutshell, a retail media network lets marketers advertise in space owned by a retailer. These messages also rely on the retailer’s first-party data. For example, you open up your Amazon shopping app. Besides an array of product recommendations, you see a banner ad from a brand you frequently buy products from. The company is targeting you at the point of sale while leveraging your in-app browsing and purchase history.
Projections reveal global retail media ad spend is expected to grow to $233.89 billion in 2027. This growth is double the $114.18 billion spent in 2023. Ad spend on retail media is also expected to make up 25.7% of digital media spending in 2027. In 2023, the share was 18.9%.
Companies are recognizing the power of messages distributed through retail media networks. These messages are usually less intrusive to the consumer and take advantage of another entity’s online reach. Ads distributed through retail media networks leverage personalization and impulse behaviors. It’s like standing next to a display of gum, candy, and chips at the register. Seeing that message is a trigger to act on a desire or need.
Messages are Customer-Centric
When you think about traditional advertising, it’s not necessarily customer-centric. The main purpose of conventional ads is often to drive awareness. You’re headed into work listening to the radio. You hear a jingle for a tree farm located in one of the cities along a main highway in your state. Now you know the tree farm exists and where it’s at.
But what if you don’t have any use for a tree? The landscaping in your yard is just fine, thank you. Or, you live in a rental and have no say about what the outdoor space around your dwelling looks like. The message boosts awareness, but it’s not tailored specifically to you. It won’t make you convert, and you might even find the jingle annoying after hearing it multiple times.
Contrast this with a post on your Instagram feed that resembles non-paid content you frequently view. Based on your viewing history, the platform discerns you’re a dog lover. The post you see is for a brand that sells clothing and fashion accessories for dogs. Featuring a photo of dogs wearing the product, the content could pass for the snapshots you take of your pet. It’s contextual, on-target, and inviting.
More importantly, the message is centric to your world. It’s content you want to engage with and features a product you’re highly likely to buy. And you have the choice of telling the platform you’d like to see more posts like it or not. Commerce media gives consumers additional control over what messages they’re exposed to and when.
The Commerce Media Revolution
It’s fair to say the digital world changed how consumers shop and interact with brands. Now, technology is reshaping retail further by revolutionizing how companies reach and engage with shoppers. First-party data is taking over as the go-to source for message and ad placement strategy.
While consumers have always driven the retail experience, brands can no longer afford to rely on a wait-and-see approach. Companies can’t get away with broad-based messages they think will work. It’s about engagement at the point of sale, measuring outcomes as they happen, and letting the consumer customize the content. Commerce media is about bringing the store to the consumer while letting them control what it contains.
