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!