Data Management

The rise of commerce media and leveraging data for optimal insights

Advertising is being transformed by commerce media. This new form of advertising closes the loop between media impressions and commerce transactions via instore and online measurement systems. Retail media networks (RMN) deliver improved targeting, provide new audience insights, and provide more relevant and valuable shopping experiences for consumers. Amazon pioneered retail media when they launched their network in 2012 and  according to a recent Forbes article, Amazon generated more than $31 billion in ad revenue in 2021, up 32% from 2020.

The RMN space is becoming increasingly more competitive. Many major retailers have recognized the winning opportunity to monetize their shopper loyalty program data and have launched their own retail media networks (RMN) including: CVS, Lowes, Target, HomeDepot, Kohl’s, Walmart, Walgreens and  Kroger. This Tuniti blog, calls out the Top 12 RMNs. RMNs have  the potential to generate over 1.3 trillion of enterprise value in the United States alone, and nearly 70% of advertisers say their RMN spend showed better returns than  their spend on other channels.

There is no doubt that measurable ROI is inspiring advertisers to adjust their media strategies amid the proliferation of e-commerce media options. Ad dollars have been moving to RMNs at a significant pace! Retail trade dollars are shifting, programmatic display budgets are shrinking and the incremental growth of measurable media budgets are feeding this trend. eMarketer forecasts that US Retail Media Networks will exceed $52 billion in ad sales by 2023.

US digital retail media ad spending 2019-2024
Image via eMarketer

What is Commerce Media and how does it work?

Let’s say you are Capital One, looking to invite new consumers to apply for the Walmart Co-Branded Credit card. When a consumer is shopping at Walmart’s website, a Capital One ad unit is displayed during the Walmart shopping experience (image below) and provides an invitation to apply.

 

Example of commerce media - Capital One and Walmart - Co-Branded Credit card
Image via Walmart

With an ad like this, the RMN, or Walmart in this case, will use the data they collect from your customer purchase history and shopping  experience to decide which customers are most likely to qualify for the CapOne card. When it comes to credit offers, Walmart’s first party data is certainly predictive, but the RMN could also benefit from leveraging dimensional data from an organization like Data Axle. Attributes like income, socioeconomic status, household make-up and number of outstanding credit lines have a long history of performance for credit card marketers and could assist in helping Walmart’s RMN formulate a winning customer audience to display the Cap One ITA to.

CPGs that have long relied on mass broadcast media to inspire consumer purchases. The evolution of RMN’s mean CPGs can now gain tremendous insight into consumer shopping behaviors, as well as quantifiable ROAs. In the example below from the Roundel Target experience, note the sponsored ad from Danimals promotion from Danone North America.

 

 

example of commerce media targeting - Daminals ad with Target
Image via Target

When you click on the sponsored ad, it takes you to the Danimals landing page so a shopper can add this item to their cart. This promotion by Dannone gives them access to detailed  information about how a shopper interacted with the Danimals ad. Commerce media targeting considers information such as page and product views, what items are added to the cart and/or purchased, which ads are clicked, contextual data like URLs and keywords, product information like categories, SKUs and prices, and identifiers like visitor IDs. Retail media provides an incredible opportunity for marketers to reach highly relevant audiences at the moment when they are in a shopping mindset.

Commerce media–everyone’s talking about it

At the heart of media and advertising is always the question, “did I get a return on my ad spend?” In a world where the advertising occurs on a publisher’s website but the actual transaction occurs somewhere else, how do you attribute a sale?

Commerce media provides a winning alternative because it closes this gap and delivers quantifiable ROI. Everyone’s talking about it because it’s a paradigm shift in the way we do digital advertising. “When we can match unique customer IDs and ad impressions with the exact item they bought, we can compress the marketing funnel significantly, getting you answers to your constant question “did that ad make a difference.”  Retailers like Walmart, Amazon and CVS are already creating and boosting high-margin, rapid growth media businesses.

Future Proof

In a world without third party data and cookies, marketers and advertisers are scrambling to figure out how to get the information they need to deliver relevant and personalized ads at scale. The pending deprecation of third-party cookies is forcing marketers to change ad-targeting tactics as they gravitate to media placements closer to the point of sale. Commerce media is rooted in verified, first party data and shopper personally identifiable information is protected by the RMN. Shopper information remains anonymous and secure, while still providing advertisers and brands the inherently quantifiable return on ad spend information they need to inform their media investment decisions.

RMN innovation includes extending their shopper audience reach beyond RMN walled garden websites and the addition of shopper data to agency platforms. The Roku and Walmart recent partnership powers purchases and shopping by remote. In September, Kroger announced their CTV solution featuring known purchase segmentation and closed loop ROI reporting. The big agencies are bolstering their RMN strategies by actively curating their  retail media collaborations. At Cannes, Omnicom announced their collaborations with Walmart, Kroger and Instacart in support of their clients. Horizon Media announced the addition of Catalina shopper loyalty data into their proprietary blu. marketing platform.

Today, demand side platforms, supply side platforms and retail media platforms operate separately. Commerce media is more advantageous because it streamlines this notoriously disjointed  path and unifies these ad hoc media plan pieces into a single, measurable channel. Marketers continue to change and adapt their commerce media strategies to accommodate consumer evolving tastes in  our  changing digital world.

In the end, RMNs are extending impressions across a variety of channels including video, CTV, display, contextual, and sponsored product pages. RMN’s do all of this while providing media owners a way to use first party data to show advertisers exactly what sales and conversions their ad spend got them.

Leverage data to enhance your omnichannel strategy

The onus is on RMNs to offer measure-up to long standing  publisher standards and they are killing it!

Commerce media opens up countless ways to enrich your omnichannel strategy by giving advertisers opportunities to retarget. Not only can you retarget the customer who clicked on your ad, but you can also retarget people like that customer, who have similar psychographics.

Data Axle offers 400-dimensional attributes including deterministic demographic attributes as well as a host of lifestyle and behavioral audience segmentation. RMNs can license data to gain deeper insights and better understand your customers, analyze behaviors, trends, and deliver impactful messages and experiences.

With this kind of power and information backing up the RMN, retargeting becomes more precise. You can use look-alike modeling to put your ad in front of people who are similar to others who bought your product on that website. This helps customers, who expect more personalization. They want to see ads that interest them and fit their needs to a tee, and with first party data from the RMN as well as enhanced data, you can show your ads to people who want to see them.

Commerce media helps you connect better with your customer

Your customer is on the open internet, looking for products and experiences that help them build and enjoy their life. Building a relationship with that customer – not just for one purchase but throughout their time with your brand – helps you keep up with customer needs. When you have data to understand where your customer is on their path, and when you have the ability to use that data effectively, you can personalize content to increase sales and achieve that personalization at scale.

In conclusion, it’s easy to see why the commerce media space is taking the advertising world by storm. As it becomes more competitive to enter into this space, advertisers need to have a comprehensive strategy to make sure they reach their audience.

Want to get started? Or have more questions about commerce media? Get in touch.

Lisa Moore
Account Director

With over 25 years of data industry experience, Lisa owns a deep knowledge and understanding of customer purchasing behaviors and the markets they represent. She is passionate about architecting data-driven solutions that fit customer needs and helping them exceed their business goals. She owns avid listening skills, has an insatiable sense of curiosity, and loves to network with like-minded professionals.

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