Commerce Media vs. Retail Media: Understanding the Value Exchange

The growth of retail media has been stratospheric, with spend forecast to reach more than $176 billion in 2025. Retail media networks (RMNs) are an increasingly popular advertising channel for brands needing to access audience insights, plan and activate campaigns at scale.

As this channel evolves, new opportunities are emerging not just for retailers but other organizations with rich, first-party data sets as well. And with the growth of the wider commerce media landscape, advertisers will have more chances to reach their target customers.

But there's a key challenge to overcome. To be successful, commerce media propositions need high rates of customer consent. Central to this is the value exchange — i.e., what the consumer gets in return for their data. Here's why it's critical for commerce media players to understand this.

Where Retail Media and Commerce Media Differ

Firstly, let's take a moment to explain the difference between "retail media" and "commerce media" to fully comprehend the potential opportunity. Sometimes the terms are used interchangeably, but they are not the same thing.

Traditionally, retail media is defined as retailers advertising partner brands in their store or on their online channels. But RMNs can also expand to off-site properties as well; retail media collaborations with CTV providers are increasingly common, offering both scale and a quality, brand-safe environment for advertisers.

Commerce media is a broader term, referring to advertising solutions that encompass organizations from vertical industries — including but not limited to retail — that have rich, first-party data, in collaboration with a wide network of media owners across the open web and other digital channels.

While much of traditional retail media's value to advertisers is at the bottom of the funnel — driving click-throughs, downloads, and conversions — commerce media offers a more holistic solution that covers the whole funnel.

Players in industry sectors such as travel, automotive, and finance are setting up commerce media networks. They have rich, first-party data sets that can uncover a host of insights into consumer preferences and behaviors that advertisers will be keen to tap into. But any organization that wants to extract value from their first-party data, by partnering with other brands and media networks to enable effective advertising, must get the value exchange right.

The Importance of the Value Exchange

Consented, first-party data is the key to commerce media. Therefore, stakeholders need to think hard about how they incentivize consumers to share their data. Both how and when advertisers, retailers, and media companies ask customers for consent are crucial.

With retail media, the proposition is generally very clear. With the loyalty card model, customers are asked for consent to data collection, and in exchange they get discounts and special offers. With commerce media, there is less clarity around the value exchange, so organizations must think carefully about how to gain this position.

Take the automotive sector as an example. Providing exclusive access to new car reviews, configurators, and price comparison services, in exchange for consent to data collection, offers an excellent route to building a trusted, first-party data relationship with customers.

But in circumstances where a clear value exchange is harder, the offer of a more personalized experience can be a draw. Nearly eight out of 10 consumers feel more positive toward brands and retailers that tailor their ads based on their preferences.

This value exchange has to be underpinned by a customer-first approach. It's not just a matter of regulatory compliance — it's necessary to build trust with customers to ensure their long-term loyalty. And as part of the value exchange, there has to be a cast-iron guarantee that customer data will only be used in the way that has been described, and is not going to be misused or inadvertently exposed.

Customers want benefits, but must be assured that there are no risks. And they must be in full control. Complete privacy should be the default setting, and with research showing that 47 percent of consumers are prepared to share data with a business on their own terms, companies who get these terms right can build substantial first-party data assets. From this, they can provide a more personalized service, boost loyalty and maintain the all-important bond of trust with the customer.

Unlocking the Commerce Media Opportunity

Getting the value exchange right is key to unlocking the potential of commerce media networks. More personalized, relevant campaigns are better for consumers. They also benefit advertisers who can target consumers at scale, measure the effectiveness of their campaigns through incrementality, and see a better return on ad spend (ROAS).

It's clear that the real opportunity for retail media networks lies off-site. But moving the needle for retail media — and wider commerce media — might require key players to start thinking the unthinkable.

Data collaboration between retailers, partner brands and media owners will only go so far — to build better advertising networks that offer peak scale to advertisers, further collaborations between organizations that traditionally are seen as competitors will be necessary. In the future, it's entirely possible we may see retailers and media owners collaborate with their erstwhile rivals to build huge networks that have a greater pull for advertisers.

When — and I do believe it's a matter of when, not if — these collaborations happen, they must completely protect precious consumer information, and enable all stakeholders to realize the value of their first-party data without ever sharing it. The value exchange must be clear, smart, and offer tangible benefits for the consumer. Get it right, and the digital advertising landscape will change forever.

Nick Henthorn is the senior vice president of Europe at InfoSum, where he leads regional growth and strategic partnerships across the data collaboration ecosystem.