The difference between commerce and retail media

Both commerce media and retail media have emerged as important ways to connect with ready-to-purchase consumers. While they share common foundations, they differ in the audiences, data sources, measurement capabilities and scale they provide. Understanding those differences can help advertisers select the right approach for their objectives and help publishers identify the right monetization strategy.

Let’s dive into the differences between commerce media and retail media, and what to consider when choosing between them as a marketer or publisher.

Commerce media is powered by consumer interactions, subject to applicable consent requirements, across categories and markets. Differentiators like closed-loop attribution enable advertisers to quantify return on ad spend (ROAS), reach and activation both online and offline, across dozens of channels.

The result? The entire marketing funnel can be contained within a single network, spanning the full customer journey.

A commerce media network (CMN) connects three groups: advertisers, publishers and consumers. The CMN sits in the middle, using permissioned data, audience segmentation, activation tools and measurement to find the right audience, serve them the most contextually relevant content and measure its impact. The more expansive and robust the network’s data insights, the more it can link exposure to outcomes.

The appeal is not just better personalization and segmentation. It is accountability. As questions around measurement, interoperability and the impact of AI proliferate, commerce media ties together a wide array of industries, channels and moments into a singular experience that can be optimized at any touchpoint.

Take Mastercard's commerce media ecosystem. With visibility across thousands of merchants, a payments network offers richer signals than any single business can provide alone. This broader view, when paired with omnichannel campaign measurement across key metrics, helps brands understand spending patterns throughout the customer journey.

While commerce media spans the broader commerce ecosystem, retail media refers to advertising that takes place on a retailer's owned digital properties, which can be delivered at the right time to the right person using the retailer's permissioned data. 

Think sponsored search results on a brand’s website, display ads on its app, offsite ads powered by retailer audiences or in-store media that reaches shoppers at the checkout line. The strength of retail media lies in its proximity to the point of purchase. 

Advertisers can reach consumers who are actively shopping and ready to buy, or those who have bought highly related items. An airline could advertise a travel offer to shoppers who just purchased a high-end suitcase, for instance. Retailers, on the other hand, benefit by monetizing their digital real estate and aggregated and anonymized data, creating a new revenue stream beyond product sales.

With relevant audiences, a trusted environment and a clear line between exposure and outcome, RMNs have grown significantly in recent years. Today, marketers recognize the value of their data insights, especially in a privacy-conscious advertising environment.

That said, retail media is not being replaced by commerce media but becoming integrated into it. Although retail media rose in popularity first, it’s best to consider it a subset of commerce media that operates within a single retailer's owned properties. A brand may employ an RMN to win share at a key retailer, or use a CMN to do the same, while also reaching consumers across a broader set of purchase journeys, including travel, dining, entertainment, financial services and more.

Selecting the right media network depends on larger business or advertising campaign objectives.

Consider these benefits:

• RMNs: For driving retailer-specific conversions, RMNs may be more effective, as advertisers often gain greater access to shelf inventory, product search and in-category sales. Depending on the goals of the business, partnering with an RMN can also lead to better trade/media alignment.
• CMNs: A commerce media platform typically offers broader reach and cross-merchant measurement.

Many RMNs operate primarily within retailer-controlled environments, which can limit visibility outside that retailer, unless supplemented by partner integrations or external measurement. Thus, scope may be more limited than a CMN; however, this is not a hard fast rule; some commerce media platforms may have limitations depending on data coverage, merchant participation, channels, matching, attribution methodology and reporting thresholds.

Advertisers evaluating retail or commerce media partners should assess measurement capabilities across several dimensions:

• Data sources and methodology: Does the platform leverage deterministic data insights, propensity modeling or both? Deterministic data consists of actual patterns and purchase trends, making it more accurate, but modeling creates a better experience for first-time and unknown customers.
• Incrementality testing: Can the platform run holdout experiments to isolate true campaign impact from baseline sales?
• Cross-channel visibility: Does measurement span online and offline purchases or only one channel?
• Privacy and compliance: How does the platform protect consumer data insights while enabling measurement? Look for aggregation, anonymization and consent-based frameworks.
• KPI alignment: Does the platform report metrics that matter to your business, such as incremental return on ad spend, reach, activation or customer lifetime value?

Publishers considering commerce or retail media networks are often looking to unlock new revenue streams, but they must also be mindful of their ability to demonstrate positive outcomes to prospective advertising partners. To that end, they should evaluate networks based on the following factors:

• Clarity: Is the network able to provide transparent measurement tools, like real-time reporting dashboards and visible auction dynamics?
• Technical readiness: Does the network offer flexible integration options, such as API integration? And will integration degrade the customer experience of your app or site? For a turnkey solution, look for an end-to-end managed service that handles audience engagement, delivery, measurement and optimization.
• Privacy and consent: Are the network’s data insights consented, robust and built for a cookieless future? Partners should have a strong consent management and compliance framework.

Partnering with networks that meet these criteria is a path to higher-value inventory monetization. Advertisers pay premiums for audiences centered on permissioned data, and a strong network allows publishers to highlight those audiences.

Interested in partnering with a commerce media network? Mastercard Commerce Media enables advertisers to reach the right shoppers with personalized content and pinpoint ROI using closed-loop attribution and sales lift measurement. With access to permissioned insights across billions of transactions, Mastercard Commerce Media may help brands to boost repeat spend, strengthen loyalty and extend customer lifetime value.