How the Digital Media Supply Chain Needs to Evolve for Commerce Media to Thrive
By Alena Morris
Commerce media is at an inflection point. While the revenue and ROI opportunities for commerce media networks and advertisers have never been bigger, the challenges to continued growth and diversification are substantial on both sides of the equation.
The advertising revenue being generated on retailer-owned e-commerce sites will reach $125.7 billion this year and is on track to surpass TV ad revenue by 2028, according to Reuters. This astounding rate of growth isn't surprising when you consider the unique conversion-oriented value being driven by today's commerce media networks — but it's also such a new growth category that the digital supply chain has yet to catch up with the marketplace opportunity.
Let's take a look at how the supply chain needs to evolve in order to facilitate continued growth and long-term sustainability for commerce media.
Challenges to Continued Commerce Media Growth
While commerce media ad revenue growth figures are impressive, it's important to acknowledge that a tremendous amount of that value is going to just a handful of players — Amazon, Walmart, and other retail titans. However, the opportunity for more niche players is still tremendous, and it's within those more-targeted networks that advertisers stand to unlock a lot of unique value and growth opportunities.
The biggest challenge facing commerce media networks right now is the sheer complexity that comes with setting up and tying together on-site and off-site components of an advertising offering. The first-party data available to commerce media networks has the power to drive robust unified offerings across all digital channels.
However, the process of enabling these cross-channel offerings — not to mention reconciling, reporting on, and optimizing performance across them — is incredibly disparate from a tech perspective right now. Commerce media networks often must log into and manage different components of their offerings via a variety of different platforms, limiting their ability to tie together performance reporting for their advertisers.
From the advertiser perspective, it's the same problem — multiplied. Like the commerce media networks themselves, advertisers are tasked with logging into and reconciling multiple tech components for a given commerce media buy — and then they must duplicate that process for every network in which they're buying. Given the number of tech platforms involved in not just one but multiple commerce media buys, it becomes nearly impossible to connect the dots on which campaign elements are moving the needle.
How the Commerce Media Supply Chain Needs to Evolve
The disorganization and fragmentation of the current commerce media landscape and the cost of implementing commerce media technology is unsustainable. Networks and advertisers alike need the supply chain to evolve to simplify the planning, execution, and reporting of their advertising efforts across channels.
Commerce media networks — particularly niche players looking to unlock their high-value audience data for advertisers — need to be able to combine their core monetization and audience acquisition strategies in one platform. They need to be able to give their buyers a way to use their audience knowledge to execute high-conversion ad campaigns across sponsored product listings, display, video, and CTV inventory, not only on their properties but also across the open internet — and this needs to happen in one place.
In this regard, forthcoming commerce media platform offerings need to take a page from the evolution of programmatic media buying. Advertisers today are demanding buying flexibility, fee and pricing transparency, data privacy, and scalable automation within their programmatic buys, as well as a simplified route to making their purchases. They should expect nothing less from their commerce media platforms.
On the advertiser side, they want the same unified tech platform that commerce media networks want — and then some. They need to be able to unite not just the tactics being leveraged with one commerce network, but rather with all the players with which they want to do business. They need a single platform that brings together access to many retailers, cutting down on individual media network experiences. This single layer of technology should also allow them to aggregate and simplify reporting and optimization, reducing jumps between platforms.
As the retail media opportunity grows, we need to be creating an environment in which a diverse playing field of smaller players can thrive alongside the Amazons and Walmarts. The commerce media opportunity is built on the strength of retailers' relationships with their customers, and the relationships that exist between niche commerce players and their clients are immensely powerful from an advertising standpoint. It's time we unite commerce media from a technology standpoint to unlock this tremendous power for everyone.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Alena Morris is senior director of product marketing at PubMatic.