Commerce media is promising, but its measurement lags behind

Walk into a farmers market and the vendor selling peaches already knows you bought a dozen eggs from the stall next door last week. She knows which days you usually shop, what you buy in bulk, and that you skipped citrus season because you switched grocers. Now walk into a mall. The store you're passing has no idea who you are, what you've bought before, or whether you're even in a buying mood today. Both are trying to sell to shoppers, but only one of them is working with real information about you.

That's roughly the gap commerce media is trying to close in digital advertising. Ad dollars are moving toward platforms that can prove a real purchase happened, not just a click, and that shift is happening fast. Ensuring you understand where commerce media fits into a media plan prevents marketers from making one of two common mistakes: overinvesting in a channel that sounds sophisticated but doesn't actually reach new customers, or underinvesting in one that's promising.

Key takeaways

• Commerce media is digital advertising powered by first party data tied to real purchases instead of just browsing behavior or demographics.
• Retail media is the most familiar piece of commerce media, but the category is much bigger. Any business sitting on transaction data, like airlines, hotels, or delivery apps, can become one of the media owners in this space.
• Ad inventory in commerce media shows up across multiple platforms, including paid search, social platforms, connected TV, and the open web, not just on a retailer's own site.
• Third party cookies are going away, which makes first party customer data (and the commerce media ecosystem built on top of it) more valuable than it used to be.
• Closed loop measurement can show you what happened inside a single platform, but it can't show you the full customer journey across every channel that touched that same purchase.
• Before you commit ad spend to commerce media, it's worth asking how a platform's reported campaign performance compares to what actually drove the sale.
• A strong commerce media strategy treats the category as part of a broader media strategy instead of evaluating this channel in isolation.

What is commerce media?

Commerce media is digital advertising that's built on first party data collected from actual transactions and purchase history, rather than the kind of general demographic or interest-based targeting most advertisers grew up with using traditional media. Instead of guessing who might be in the market for hiking boots based on browsing history alone, a commerce media platform can point to actual purchase data: this person buys hiking boots every 18 months, and they're due. Commerce media offers that kind of specificity because it uses data to deliver ads based on what someone has actually bought.

The data points that make commerce media valuable are things like:

• what someone bought
• how often they buy it
• what they browsed for before checking out
• general purchase history and behavioral data that build up around a customer relationship

These intent signals give advertisers a level of confidence that's hard to get from cookies or third party data providers, especially with privacy rules and cookie deprecation eating away at other targeting.

For the media owner, there's a value exchange at the center of all this: the retailer or platform gets a new revenue stream from advertisers, and the advertiser gets access to first party data it could never collect on its own.

A quick example

Retail media networks like Walmart Connect are the version of commerce media most marketers know because they've seen sponsored product ads sitting right in search results on a retailer's site. But commerce media is a broader category. An airline that knows a customer's travel history and price sensitivity can sell ad space to hotel chains and rental car companies wanting to reach prospective customers who are already planning a trip. A food delivery app that knows a customer orders Thai food every Friday can offer relevant offers from a coupon partner or a new restaurant trying to build brand visibility in that customer's neighborhood. Neither of those businesses is a traditional retailer, but both are sitting on customer data valuable enough to build an ad business around.

Commerce media vs. retail media: what's the key difference?

People mistakenly use these terms interchangeably. Part of that confusion is due to retail media networks getting so much attention first. But they are different, and you need to understand how they differ before you put a commerce media strategy together around either one.

Retail media refers specifically to advertising on a retailer's own digital properties, think sponsored product listings on Amazon, Target, Walmart, or Ulta, or sponsored content built into a retailer's app. It relies on that one retailer's first party data about its own shoppers and its own physical stores.

Commerce media is the umbrella. It includes retail media, but it also includes any business—an airline, a hotel chain, a bank, a delivery app—that can connect brands to active shoppers using transaction data, whether or not that business operates a store. Some of the biggest media owners to emerge over the last few years, and some of the fastest-growing corners of the broader commerce media networks landscape, aren't retailers at all.

Here's a simple way to see the two side by side:

A simple way to keep the two straight: all retail media is commerce media, but not all commerce media is retail media. Most brands build their commerce media strategy by starting with the retail media networks they already work with, like Target or Walmart, before testing other commerce media networks in travel, delivery, or financial services.

Where commerce media ad inventory actually shows up

One of the more common misconceptions is that commerce media only lives inside a retailer's own website or app. Retail media networks were the first to build this kind of ad business, and the commerce data behind their placements is what makes them different from a typical programmatic buy. In practice, media owners have expanded well beyond their own digital environments and now sell ad placements across several digital environments and ad formats, including:

• Paid search, through sponsored product listings and sponsored ads that show up directly in on-site search results
• Social platforms, where retailer audiences can be targeted off-site with targeted ads built from the retailer's own first party data
• Connected TV, where streaming inventory gets sold using purchase-based targeting instead of broad demographics
• The open web and open internet, where non endemic advertisers (brands that don't sell products on that retailer's site) can still reach relevant audiences through sponsored listings and other ad placements, using first party data to deliver targeted ads built on the retailer's customer data

This matters for your commerce media strategy because it means the category isn't a single ad placement you either buy or skip. It's closer to a programmatic advertising layer that uses contextual data and audience insights built from real purchases, wherever that inventory happens to run across the open internet.

Why commerce media is gaining ground

Several forces are simultaneously pushing ad spend toward commerce media, which why this category keeps showing up in more media plans, from retail media networks to airlines and delivery apps, and why the commerce media market continues to grow. For a brand advertiser, commerce media offers a shortcut to reaching people who are already close to buying.

Third party cookies are on their way out. As browsers phase out the tracking that used to power a lot of digital advertising, first party customer data becomes one of the few reliable ways left to target the right person. Businesses that own first party data, whether that's a retailer, an airline, or a delivery app, suddenly have leverage they didn't have before, and fewer third party cookies in the mix means that leverage keeps growing.

Artificial intelligence is making the data more usable. Data clean rooms and other privacy-safe matching technology let brand advertisers use a retailer's customer data to optimize campaigns without either party handing over raw customer records. Commerce media creates new ad formats faster than most marketers can track, and those same data clean rooms are becoming a standard piece of how any serious commerce media strategy gets built. More data clean rooms keep customer data protected while still letting advertisers use it, and more retail media networks are adopting them every quarter.

It's a new revenue line for media owners. Any business with a meaningful base of online shoppers and enough advertising investment behind it can start selling ad space to brand advertisers wanting relevant offers in front of prospective customers who are already close to buying, based on the same commerce data that powers the platform's own product recommendations. Even for businesses that never thought of themselves as media companies, that's a real opportunity to diversify revenue and use first party data to deliver something advertisers will actually pay for. As commerce media continues to expand into new formats, the businesses that get there early tend to build the strongest advertiser relationships.

There's a measurement blind spot hiding here

Closed loop measurement sounds like exactly what marketers want: a commerce media platform can point to a click and then point to a purchase on the same platform, and hand you a clean number to report up the chain. The problem is that closed loop measurement only tells you what happened inside that platform's walls.

It can't tell you whether that same customer had already been shopping around because of a connected TV spot they saw the week before. It can't tell you whether the sale would've happened anyway because of an email campaign or word of mouth. And it definitely won't tell you how that commerce media buy affected commerce outcomes somewhere else entirely, like a physical store the customer walked into two days later.

That's not a reason to skip commerce media, but marketers need to ask harder questions about what a platform's reported campaign performance is actually measuring before they use it to justify next quarter's budget, especially since the underlying commerce data rarely gets shared outside the platform. A commerce media touchpoint early in the buying journey deserves credit even if the sale closes somewhere else, and not all media owners make that easy to see. A few questions worth asking before you trust the key metrics a commerce media platform hands you:

• Does this number account for purchases that happened outside the platform?
• Would this customer likely have bought anyway, with or without this ad?
• How does this campaign's reported performance compare to what an independent, cross-channel view shows?

The data most commerce media platforms are built to deliver is useful, and it can help you understand commerce outcomes at a glance, but it's not complete. It's the full picture that tends to go missing.

How to evaluate commerce media as part of your broader mix

The commerce media market continues to grow quickly, and it's tempting to feel like you're winning if you just shift some budget toward it. But commerce media creates the most value when it's evaluated alongside the rest of your media strategy, not as a standalone line item competing for credit.

As the commerce media ecosystem keeps expanding, keeping a consistent measurement approach gets more important. A few things worth keeping in mind as the commerce media space, and the broader commerce media networks inside it, keep maturing:

• Ask what the platform can and can't see. Every commerce media platform offers a version of performance reporting based on its own first party data and commerce data. That reporting is only ever going to reflect what happened on that platform, so treat it as one input rather than the full story.
• Look at how commerce media interacts with the rest of your buying journey. A customer's full customer journey rarely starts and ends on one platform. Commerce media works well as an amplifier for campaigns running elsewhere, and it's worth understanding whether it's adding incremental reach or just capturing credit for demand you already created earlier in the buying journey.
• Weigh commerce data against your other data sources. As more of the broader commerce media networks compete for ad dollars, it gets harder to compare campaign performance across them using their own self-reported metrics. A consistent, independent view across every channel keeps that comparison honest, no matter how many media owners are asking for a piece of the budget.

Where Prescient comes in

Prescient's marketing mix model measures the total impact of your paid media spend across every channel, including the halo effects that show up in places closed loop measurement will never see, like organic search, direct traffic, and even Amazon or retail partner sales that started with an ad on a different platform. Instead of relying on platform-reported ROAS from each commerce media network you're testing, you get a Modeled ROAS built from the same statistical relationships across your entire mix, so a Walmart Connect campaign and a connected TV buy get judged on the same terms.

That matters most once commerce media stops being a single test and starts becoming a real line in your budget. Prescient's model already accounts for omnichannel brands with a retail footprint, with confirmed measurement for partners like Target, Walmart, Ulta, Sephora, and DICK'S Sporting Goods, so you can see how a commerce media investment on one platform is actually influencing sales, both online and in physical stores, elsewhere in your business. If you're ready to see how Prescient can uncover what your current media strategy actually earned credit for, book a demo and we'll walk you through it.

FAQs

Is commerce media the same as retail media?

No, though the two get used interchangeably a lot. Retail media is advertising sold through retail media networks on a retailer's own digital properties, using that retailer's first party data about its own shoppers. As third party cookies keep disappearing, that first party advantage matters more every year. Commerce media is the broader category that includes retail media, but it also includes any business with valuable transaction data, like airlines, hotels, or delivery apps, that decides to sell ad space to brands.

What's an example of commerce media outside of retail?

A hotel chain that knows a guest's travel history and spending habits can sell ad space to rental car companies, restaurants, or local attractions trying to reach that guest before their trip. A food delivery app can do something similar with restaurant partners or coupon providers. Neither business runs a store, but both have first party data valuable enough to build an ad business around it.

How is commerce media different from programmatic advertising?

Programmatic advertising describes how ad inventory gets bought and sold, usually through automated auctions across the open web. Commerce media describes the type of data behind the targeting, specifically first party purchase and transaction data. The two aren't competing concepts. A lot of inventory across various commerce media networks gets bought programmatically, especially when it runs on connected TV or the open internet instead of a retailer's own site.

Do I need my own first party data to use commerce media?

You don't need your own customer data to advertise through a commerce media platform. Brand advertisers, including non endemic advertisers who don't sell on that platform at all, can use a retail media network or another commerce media owner's first party data to reach relevant audiences. You do need your own data, or a reliable way to measure results, if you want to know how well it actually worked.

Can commerce media work for B2B brands?

It's less common, but it's not out of reach. B2B commerce media tends to show up through platforms with strong first party data on business buyers, like B2B marketplaces or industry-specific commerce platforms, rather than through consumer retail media networks. The same principle applies: whoever owns the transaction data has something valuable to sell to advertisers trying to reach that audience.

How do I measure the ROI of a commerce media campaign?

Start with the campaign performance the platform gives you, but don't stop there. Closed loop measurement only shows what happened inside that one platform, so it can miss halo effects on other channels, in-store sales, or purchases that would've happened anyway. An independent measurement approach, like a marketing mix model, gives you a consistent way to compare commerce media against the rest of your media strategy instead of taking every platform's self-reported numbers at face value.