he advertising landscape is undergoing a seismic shift, and at the heart of this transformation is the emergence of commerce media. While retail media has become a well-known concept, commerce media represents a broader, more expansive category that is reshaping how brands connect with consumers. This essay explores the commerce media landscape, its opportunities, challenges, and what marketers need to know to navigate this evolving space.

What Is Commerce Media?

Commerce media is an umbrella term that encompasses retail media and extends beyond it. At its core, commerce media refers to advertising that integrates content within the context of transactions, leveraging proprietary first-party data collected from those transactions.

Retail Media: This is the most familiar subset, where retailers like Walmart, Target, and Amazon use their digital assets (websites, apps) as advertising inventory. These platforms are attractive because they offer access to high-intent shoppers and robust first-party data.

Commerce Media: This broader category includes non-retail players like airlines, hotels, financial institutions, coupon platforms, and payment services (e.g., PayPal, Klarna). These entities are now launching their own advertising platforms, creating new opportunities for brands to reach consumers.

The Commerce Media Landscape: What’s Included?

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Commerce media expands the scope of advertising beyond traditional retail environments. Here are some examples of what falls under this category:

Airlines and Hotels: Airlines and hotels are increasingly valuing their customer information, allowing them to build personalized advertising experiences for their viewers. For instance, airlines such as Delta can advertise to frequent travelers with customized promotions based on their travel history, preferences, or even future trips.

In the same way, hotel brands like Marriott can use their guest information to show targeted ads for vacation packages, upgrades, or local experiences that are related to previous stays or booking patterns. This personalized targeting not only enhances the customer experience by providing relevant choices but also creates another revenue stream for these businesses.

Financial Institutions: Financial institutions, specifically payment systems such as PayPal and Venmo, are cashing in on their huge user bases by moving into the advertising sector. These systems have a wealth of transaction data at their fingertips to provide highly targeted marketing opportunities based on users' spending patterns, interests, and buying behavior.

For instance, PayPal can provide targeted ads for suitable financial products, services, or offers based on users' past purchases or financial transactions. Venmo, being social and peer-to-peer payment-enabled, can naturally fit brand ads into its platform, engaging users who are already actively using the service.

Coupon Platforms: Coupon sites such as Honey and Rakuten are best positioned to leverage transactional data to provide highly personalized, targeted ads. These sites gather valuable information from users' buying patterns, including favorite products, shopping frequency, and transaction frequency. By using this information, they can provide relevant offers, discounts, and promotions that closely match individual consumer requirements. For instance, Honey can send personalized offers and discounts for a product a customer has previously indicated interest in or bought.

E-commerce Platforms: Platforms such as Shopify are reshaping the world of digital advertising by building powerful ad networks that bridge brands and consumers through vast arrays of online stores. Leveraging its expansive network of merchants, Shopify provides advertisers with entry to a multicultural and highly involved audience composed of consumers who already have a buying mentality.

Shopify's ad network helps brands target campaigns within the Shopify ecosystem, showing ads on merchant sites, within their online stores, and across multiple partner sites. Brands are able to capture potential customers while they are actively engaged with browsing products, leading to more timely and relevant ads.

The Evolution of Commerce Media: From Print to Precision

The concept of advertising within transactional contexts isn’t new. For decades, brands have placed ads in in-flight magazines, on hotel room key cards, or within coupon booklets from platforms like Ibotta and Honey. What’s changed is the shift from static, broad-reach advertising to data-driven, precision-targeted campaigns.

From Generic to Personalized: In the past, an ad in an in-flight magazine was seen by all passengers, regardless of their interests. Today, airlines like Delta use first-party data to serve personalized ads based on travel history, preferences, and purchasing behavior.

From Guesswork to Attribution: Coupon platforms like Honey and Ibotta have long offered advertising opportunities, but now they provide detailed attribution metrics, allowing brands to track how ads drive specific actions, such as clicks, redemptions, and purchases.

From Mass Marketing to Micro-Targeting: The integration of first-party data enables brands to target niche audiences with unprecedented accuracy, ensuring ads are relevant and timely.

The Pros of Commerce Media

Commerce media offers several advantages over traditional retail media:

Scale: Retail media networks are often siloed. For example, to reach grocery shoppers, a brand might need to partner with multiple grocery retailers. Commerce media platforms like PayPal, however, can offer access to a much larger, more diverse audience in one go.

Diverse Data Sources: Commerce media taps into a wider range of transactional data, from travel bookings to peer-to-peer payments, enabling more nuanced targeting.

Innovation: Platforms like Klarna and Shopify are blending the best of both worlds—capturing customers in a shopping mindset while offering scale across industries.

The Challenges of Commerce Media

While commerce media presents exciting opportunities, it also comes with limitations:

Contextual Relevance: Not all commerce media platforms align with a purchasing mindset. For example, seeing an ad while Venmoing a friend might feel intrusive, whereas an ad on Walmart.com feels natural.

Nascent Industry: Commerce media is still in its early stages. Many platforms lack the sophistication and measurement capabilities of established retail media networks.

Trust and Transparency: With so many new players entering the space, brands must be cautious about guarantees and ROI promises. Not all platforms or partners are equally reliable.

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What to Watch in 2025

As commerce media matures, several trends and players are worth monitoring:

Klarna and Shopify: These platforms are poised to lead the charge, offering both contextual relevance (shopping mindset) and cross-industry scale.

Measurement and ROI: As the industry evolves, expect advancements in tracking and attribution to help brands measure the true impact of their campaigns.

Testing and Experimentation: Brands with the budget and infrastructure should consider running controlled tests on new platforms to identify what works and what doesn’t.

Advice for Marketers

To succeed in the commerce media landscape, marketers should:

Experiment Strategically: Allocate budget for testing new platforms, but ensure you have the talent and infrastructure to measure outcomes effectively. While testing new platforms can provide short-term insights, it’s crucial to assess their scalability and alignment with long-term business objectives before committing large budgets.

Focus on Context: Prioritize platforms that align with a purchasing mindset to maximize relevance and engagement. The digital landscape is constantly evolving. Stay agile and open to adapting your strategy based on emerging trends, new platform features, and changes in consumer behavior.

Be Wary of Guarantees: Approach new platforms with a healthy dose of skepticism. Avoid over-reliance on agencies or partners that may not yet fully understand this emerging space. New platforms often promise quick wins, but their long-term sustainability and effectiveness are not always guaranteed. It's important to critically assess whether they align with your overall strategy before making significant investments.

Leverage First-Party Data: Whether through retail or commerce media, first-party data remains the gold standard for targeting and personalization. With first-party data, you can create a unified view of your customers, ensuring consistent, personalized interactions across all channels, whether online or offline, increasing the chances of conversion.

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Conclusion

Commerce media represents the next frontier in advertising, offering brands new ways to reach consumers across a diverse range of transactional touchpoints. While the industry is still nascent, its potential for scale and innovation is undeniable. By staying informed, experimenting strategically, and prioritizing contextual relevance, marketers can position themselves to thrive in this dynamic and ever-changing landscape.

As we look ahead to 2025, one thing is clear: commerce media is not just an evolution of retail media—it’s a revolution. Brands that embrace this shift early will be best positioned to capitalize on its opportunities.