A Message From 2024: Commerce Media is Reshaping the Media Industry

“The Third Wave of Digital Advertising,” Commerce Media is only five years old, but has completely transformed digital media in only two. 

Imagine it’s June 2024. Your iPhone 15 alerts you with the day’s headlines: Dwayne Johnson’s presidential campaign is gaining traction; the Cybertruck is being delayed another year; and in the media world, Commerce Media (total addressable market) has reached $200B (with retail media as a subset) and Search is now $285B. Search took 25 years to reach that figure; Commerce Media is only five years old. 

Velocity is the core factor we need to discuss here, inspired by Megan Clark's interview with Beet.TV

So, let’s imagine that you scroll around on that 2024 iPhone to learn a little more about what Commerce Media looks like and how all these changes happened so fast.

Here are some of the headlines you see:

1. The Converged Omni-channel Digital & Commerce Practice is Reaching Operational Maturity.

Among the trendsetters making this possible is Unilever's Digital & Commercial Chief, Conny Braams (Conny Braams | Unilever). Through converged digital KPIs, innovative metrics for measurement, new disciplines, fully integrated org designs, and commerce-minded media agency partnerships, Conny and other emerging "Commerce Media Bosses" are creating an innovative approach to reaching customers and influencing their purchase decisions. "We can now build brands and convert sales at the same time," Unilever said back in 2022, "so why would [we] artificially split that?” (“CMO? Unilever says no | LinkedIn”)

"I see Commerce Media as a natural evolution of retail media and I am convinced that in two years' time, it will have become the primary way that CPG companies reach consumers," said another CPG Commerce Media Boss. 

2. AI/ML is Accelerating Five Times Faster in Commerce Media Than Search and Social When it Comes to Influencing Consumers' Digital Activities. 

As far back as 2020, 80% of Netflix's streaming consumption was already ML-recommended. Back then, the power of recommendation engines was neither fully understood nor fully harnessed in the wider commerce realm. So, it should be no surprise that today, in 2024, the majority of purchases and media consumption are influenced by AI and ML.

“That means consumer intent signals are only half of the equation.” 

Seismic shifts towards ad targeting based on purchase patterns instead of the audience data-sphere have made retail data sets more valuable than ever, augmented by fast-scaling first-party data applications and the still-ongoing transition to cookie-less practices.

 Notably, Commerce Media has played a major role in accelerating our ability to both understand and harness the power of recommendation engines. It provides a unique perspective through which to observe the power of recommendations and powerful opportunities to study the impact they can have. 

 (Given I am now at Criteo which has 15+ years of active algorithms and billions of products learned daily, you can expect more in-depth examination of this topic in my next article: 

The What-Else Economy: Lessons from Netflix and Costco and the Economics of Recommendation-Influenced Consumer Activities).  

3. Retail Media Is an Essential Channel for Building Brands. 

In 2024, Retail Media (an indirect channel and a subset of Commerce Media which largely being digitally transformed) is no longer just an isolated tactic, or an incremental programmatic inventory buy for brands. DTC marketers – including both digital natives and established brands – have built new practices and changed the economics of building brands during shopping moments. Retail Media is about a decade and a half old now, and Commerce Media just turned five, but both together have become a new discipline being taught within agencies and universities, with accredited degrees and certifications drawing reliable attention.

Driven by modern technology, programmatic-course-corrections, and monetization opportunities among retailers, Retail Media is the new market, business model, and digital transformation. It is expected to sustain itself as a complex and consequential discipline for many years to come. 

4. Contextual Commerce Expands Shopping Moments Beyond Walled Gardens, Hinting at an Era of Infinite Media Inventory. 

With Commerce Media out on the open web, we’re witnessing a steady blending of commerce + media; commerce becoming media and media becoming commerce. This process has had one particularly fortunate byproduct: Contextual Commerce.

In 2024, Contextual Commerce is forging the interoperability between brands' CDPs (Customer Data Platforms) and publishers' and retailers' DMPs (Data Management Platforms), providing a powerful alternative to Social Commerce.

Media buyers are combining Social Commerce and Content Commerce disciplines into one. Without cookies or clear winners in the identity resolution race, these newly formed teams rely primarily on contextual data instead of audience data to extend their reach across the open web and into the walled gardens. They use something called 

"Shopper Moment-Casting,” a stronger iteration on lookalike audiences, to do it more seamlessly and effectively.

Audience or identity targeting takes a secondary role in this new paradigm, helping handle things like verification, frequency capping, and deduplication in ways that are very similar to 2022. But the ad triggers and signals that have become most popular and effective are the ones that are contextual and supply-chain aware (i.e., in-stock, store-specific capabilities, fintech/payment integration, etc.). 

5. Surprise! Infomercials Are Back, Better, Shoppable, and Live. 

Virtual activities are now the default in 2024. "Live Commerce" has finally taken off in the West, too, adapting best practices from East Asia to combine content and promotion and shorten transaction journeys into effective, live "shopping moments." Retailers have adopted a habit of producing their own original streaming content and Netflix has launched shoppable content capabilities in order to better merchandise its own shows. Essentially, Live Commerce is finally being seen as a fulfilling virtual activity; something that rewards consumers and brands alike. It could be compared to visiting an outlet store way back in the heyday of outlet malls – it delivers a branded experience that satisfies fans; it drives engagement with preferred audiences; and it promises plenty of value for the price.

6. Personalization and Supply Chain Integration Is Opening Up New Paths to Smarter Creatives. 

Retailers' Product Detail Page (PDP) and third-party product catalogs have become fundamental tools for smart creatives in Commerce Media. Things have become more connected since 2022, and ad formats have become more dynamic, fluid, and native. In addition, retailers can leverage newer, easier forms of payment thanks to Web3. This is how advertising moves towards being utility-based and improves its usefulness in exchange for consumer data and trust. The notion of "your product is someone else's supply chain" carries more weight in Commerce Media than in Search or Social. The emerging Commerce Media platforms have become the new creative powerhouses where brands flock to innovate, engage, and now transact directly with consumers. To populate these environments, agencies rely on known and historical shopper data in combination with supply chain and logistics surrounding products, then engineer the "matchmaking" based on their client's brand values and the consumers that match their queries most precisely and conveniently. 

After absorbing all this news, you somehow zap back to 2022. Today. What do you tell your colleagues?

• First off, things are going to change fast over the next couple of years. The accelerating velocity of those examples will foster new digital fundamentals and further accelerate Commerce Media practices to grow faster than all its digital predecessors. 
• Secondly, Commerce Media is not a "wait and see" medium, but rather a " race to be the leader in your respective industry" priority, because the companies that drag their feet here will be stuck watching the future run right past them.
• Third, we all need to learn a lot more about Commerce Media, and fast. And make a plan. This one seems urgent, so let’s get started on it right now.

What Is Commerce Media?

 Commerce Media is a new green space of digital advertising that encompasses both commerce and media. Similar to the way search algorithms helped organize the world's information several decades ago, Commerce Media helps brands match the needs and wants of consumers with the products that enrich their lives at the right shopping moments and with new forms of value exchange. 

It is the fusion of two industries to create a new type of ecosystem that allows brands to advertise their products within the context of curated shopping moments, crafted and defined by smarter and smarter applications of data.

What Commerce Media is NOT

Do not mistake Commerce Media for Commerce Marketing or Retail Media. Commerce Marketing is a subset of Commerce Media, and it’s important to understand the difference. Commerce Marketing focuses on the conversion of online shoppers into offline customers in physical stores. It’s a way to connect digital advertising with offline sales. Retail Media, on the other hand, is the activation of opportunities within the retailers' discreet universe, to engage and transact with consumers, incentivized by monetization and new business models. 

How Do We Prepare for The New Era?

A good first step is to maximize your investment in gathering, measuring, studying, and utilizing first-party data. The classic maxim will still hold true in 2024: Data is the new currency. But commerce is the pretext and catalyst and engine for the entire economy, and in Commerce Media, first-party data is the only data that matters. Sounds hyperbolic? Not really. "If you're not first-party data-obsessed, you will fail in Commerce Media," said one Commerce Media Boss. In other words, if you do not have a direct relationship with your customers, you cannot succeed in Commerce Media. This has been the case in retail for a long time, but it’s becoming increasingly true in digital as well. 

 The industry is moving away from purchased or rented data to a new era of embedded insights within Commerce Media platforms. This will allow for real-time understanding and measurement of media quality (e.g., store sales uplift) across channels, well beyond last-click attribution. This data can then be used to further personalize and improve the effectiveness of Commerce Media. Ad dollars continue to flow towards those that can prove value with data at an accelerated pace, whether it be publishers, platforms, or technology providers.

In 2024, “co-opetition” is the new competition. 

Let's Co-Learn.

 As I am starting my new journey at Criteo this month, I would like to invite you to join me to uncover new possibilities in Commerce Media, together. Follow, subscribe, comment, or co-write. To me, Commerce Media is the new age of advertising where both digital and physical innovation can truly enrich the lives of consumers and offer 'usefulness' as we advance into the next 'good' advertising era on the open web.

Let’s get it right!