Commerce media has been stirring up a ton of buzz as the next big disruptor in digital marketing. What lies behind this buzz? Cutting through the hype is as simple as following the numbers.
In the five years since its birth, commerce media has hit $200 billion in revenue. As a benchmark, Search advertising is currently at $285 billion, and it’s had 25 years to get there. Moreover, McKinsey predicts that, by 2026, commerce media could be a gold mine with $1.3 trillion of enterprise value stashed in it.
As ad pros start scrambling to make their commerce play and stay relevant, there will be more than a few sets of best practices that emerge. But there’s one lesson that’s already starting to peek above the horizon of the next few years of commerce media. Context is king.
Wait, why is commerce media so great?
Over the past two years, retailers have embraced the commerce media trend by launching retail media networks (RMNs) – advertising platforms that allow retailers to sell ad space across their website, mobile app and other owned channels. And while brands like Amazon and Walmart have been making headlines for their dominance in the space, commerce media is inclusive of much more than large retailers and RMNs.
Commerce media helps to level the playing field, giving any company that facilitates transactions with consumers (e.g., sales, sign-ups, etc.) new opportunities to engage and monetize their audience. From online ticketing sites to travel and hotel providers, any brand with access to first-party consumer insights and a loyal customer base is well-positioned to launch a commerce media offering.
McKinsey speculates that two factors teed up commerce media to take advertising by storm. The pandemic put rocket fuel in ecommerce’s engines, boosting customer expectations of seamlessness in purchasing and shedding new kinds of behavioral data. In addition, the death of the third-party cookie has threatened to compromise attribution, making access to first-party data and closed-loop measurement more valuable to advertisers than ever.
Commerce media delivers just that, creating a clear breadcrumb trail between audience impressions and real customer purchases. In the past, advertisers had built up a whole system of sometimes dubious science and analysis to determine whether or not they were getting the most out of their marketing spend.
Commerce media closes the attribution loop, helping marketers see the link between an ad they serve and the purchase that’s made – because it all happens within the media itself. And as advertisers relish in the glory of true attribution, consumers benefit from a seamless ad experience, receiving offers based on their shopping behaviors and preferences.
Maybe you’re beginning to anticipate the importance of context in this kind of advertising. But let’s spell it out.
Rethinking the Holy Grail
The Holy Grail of digital advertising for the last 20 years has been “the right ad to the right person at the right time.” But there’s an important missing piece to this undoubtedly neat trinity: the right context.
This seems obvious, in a way. We often talk about “the buying journey.” Trying to understand the path to purchase without actually considering the environments that users are engaging with is a bit like asking someone to give you their life story through the personal stats on their driver’s license.
Contextual data has bullied its way onto the list of priorities for marketers wanting to make the most of their ad spend in commerce or retail media. The reasons why are sundry. But cookie woes have made relying on audience data alone a losing proposition. While it can be helpful for auxiliary concerns like verification and frequency capping, it’s contextual ad triggers that are poised to become far more useful and reliable in the age of commerce media.
Meeting shoppers in the post-purchase moment
Fluent recently launched a product called adflow that epitomizes this emerging trend. Adflow is a post-transaction advertising solution, allowing retailers to surprise and delight customers with exclusive offers on their purchase confirmation pages. Riding the dopamine kick of a new purchase, the shopper is presented with relevant offers tempered by first-party insights from Fluent and its commerce partners.
While audience data is being brought to bear on certain elements of an ad like this, the key thing is where the ad is being placed: in an environment where the appetite to buy has already been expressed. Leaving aside the cookie debacle, you don’t need to know as much about an audience if you already know what they’re buying and where they are on the customer journey. The context is telling you everything you need to know to serve relevant advertising.
This kind of approach helps advertisers extend their reach across the open web and gain access to new audiences. And in a world of low margins, retailers and publishers are eager to find ways to leverage their existing inventory to unlock new revenue streams. This meeting of interests is creating an opportunity for brands to contextually target their ads in curated shopping moments that are sharpened by smarter and smarter applications of data.
The one true king
As commerce media continues to grow, advertisers will work toward elaborating new strategies to make the most of its huge potential. Its ability to allow advertisers to tap into contextual data – where consumers are, what they’re doing and what they’re interested in – will make it an attractive option for those coming to grips with the reality that cookies are, in fact, toast.
Those making the jump will have to learn quickly and on their feet. But at least they can come to the table equipped with learning from the first wave of experimentation. We’ve all been saying in this industry that data is king. But commerce media puts a bit of a spin on it: Contextual data is the true king here.
