The importance of commerce media for the addressable future

Sukesh Singh, head of activation (SEA) at Criteo, and Arshan Saha, chief executive officer of GroupM Nexus APAC, sat down with The Drum’s APAC editor Danielle Long to discuss the importance of commerce media and the factors driving its growth at the recent APAC Trends Briefing. Catch up on the full session here.

From a technological standpoint, commerce media involves the convergence of retail media owners who are now also media suppliers, the open internet, and brands seeking to engage with audiences. This blending of technology with commerce media has resulted in a new and powerful way for brands to reach customers through programmatic advertising.

Singh and Saha note the ongoing evolution of addressability without third-party signals as well as the seismic shift in consumer shopping habits post-Covid, has fueled the growth of e-commerce as it opens vast opportunities for marketers and media owners to share consent-based, opted-in, first-party data.

According to GroupM’s This Year, Next Year e-commerce forecast, more than $3tn (nearly 61%) of e-commerce sales can be attributed to seven global markets including three Asian economies – China, Japan, and Australia. By 2027, 25% of all retail sales will come from e-commerce, currently worth $5.4tn globally.

“This rise of e-commerce has forced advertisers and retailers to adapt and move online by creating retail stores or partnering with e-commerce platforms”, says Criteo’s Singh. “As a result, commerce media has exploded, enabling brands to engage with audiences in new ways, leading to significant growth for the industry.”

With commerce media becoming such a critical component of digital marketing and advertising, it’s essential for brands to understand its importance and potential, says Saha. “The ability to engage with customers where they are shopping has never been more important, and commerce media provides a powerful way to do so. As the industry continues to grow, brands that embrace commerce media will be better equipped to reach customers and grow their businesses.”

What makes retail media so important is its ability to deliver granular audience insights, which enable brands to retarget their customers more effectively. Through machine learning, brands can gain a better understanding of their audience's purchase intent and use this information to deliver highly targeted ads at the point of purchase.

“As we move towards a cookieless future, first-party data will become even more important in driving successful advertising campaigns,” says Singh. “Commerce media allows brands to use their first-party data in a more scalable form, ensuring that they can continue to engage with their audiences effectively.”

The experts also discussed challenges such as how advertisers must juggle between partnering with commerce platforms and retailers, or setting up their own credit.com, and determine where to invest in the value chain. There is a need for consolidation to grow the pie and use the platform that enables demand and supply.

The growth trajectory of the commerce and retail industry presents opportunities for expansion and adoption – but with intertwined challenges, consolidation and partnerships will be key to leverage these opportunities to build performance across the full funnel, including off-site capabilities and offline capabilities.

Summing up the key takeaways from the session, the panelists shared some top tips for marketers to embrace this new digital future:

1. Plan media on a cross-channel level in an agile form using predictive data and optimize using real-time data to see how consumers are moving

2. Consider shifting retail marketing budgets towards commerce media to drive performance and growth

3. Focus on creative as a big area of opportunity for brand-related translation

4. Consider media fragmentation and how consumers move across devices and platforms when planning and executing media campaigns.

To learn more about how commerce media is changing the digital advertising landscape, check out the full session on The Drum TV.