The retail media category has hit a definitional inflection point. What started as sponsored product placements on Amazon’s search results page has expanded into a full-funnel advertising category that now encompasses off-site programmatic display, connected television, social media buys, and in-store digital screens — all powered by retailer first-party transaction data. The industry is increasingly adopting a new term for this expanded category: commerce media.

The terminology shift matters because it reflects a genuine change in what buyers are purchasing. Commerce media is now outpacing paid search as the fastest-growing digital advertising category — and the structural reasons why have implications for media mix strategy across nearly every consumer-facing vertical.

Why “Commerce Media” Is Replacing “Retail Media”

The retail media framing was accurate for the category’s first phase: advertising on retail-owned properties (Amazon, Walmart.com, Target.com), bought primarily by the brands sold through those retailers (CPG, consumer electronics, apparel). The term had natural limits — it implied retail industry context, onsite placement, and a specific set of direct-to-consumer measurement dynamics.

Commerce media is a broader category that better describes what’s happening now. The core capability is still retailer transaction data — shopper purchase history, loyalty card behavioral patterns, basket composition data. But that data is increasingly powering advertising beyond the retailer’s own properties.

Amazon’s DSP now reaches audiences across tens of thousands of third-party websites and apps using Amazon’s shopper data as the targeting signal. Walmart Connect’s offsite advertising program places media across the open web against Walmart customer audiences. Kroger Precision Marketing activates its loyalty data across programmatic channels through partnerships with DSPs. The “closed loop” that makes commerce media valuable — the ability to link ad exposure to purchase — now works across channels that aren’t the retailer’s own inventory.

The addition of CTV is particularly significant. Walmart Connect’s CTV capabilities, activated through Walmart’s acquisition of Vizio, allow buyers to reach Walmart shopper audiences on connected television with attribution connected to Walmart purchase data. This is meaningfully different from traditional TV advertising, where audience proxies and panel-based measurement are the standard.

The Paid Search Growth Comparison

Paid search has been the dominant digital advertising category for two decades, primarily because it captures purchase intent at the moment it’s expressed. The brand’s message meets the customer’s commercial intent in real time — which is why search advertising commands premium CPMs and generates strong direct attribution.

Commerce media is surpassing paid search’s growth rate (not its total volume — search remains larger in absolute spend) for a structural reason: commerce media can do something paid search cannot, which is activate against demonstrated purchase behavior rather than inferred intent.

When Amazon targets a user who purchased camping gear six months ago with a new tent SKU, it’s not inferring that the user might be interested in camping based on search queries — it’s using actual purchase history. When Instacart activates a “lapsed buyer of organic snack brands” segment for a challenger brand campaign, it’s using precise transaction data to define the audience. This precision is not available in search advertising, which relies on keyword intent as the audience proxy.

The measurement advantage is also structural. Commerce media closed-loop measurement — linking ad exposure to purchase in the retailer’s transaction database — provides causal attribution data that search’s last-click pixel model can’t match for brands whose conversion path runs through retail rather than direct e-commerce.

Who Benefits and Who Is at Risk

The commerce media expansion is producing clear winners and losers across the media ecosystem.

Winners: Amazon (dominant commerce media platform across all channels), Walmart (Vizio acquisition is proving strategically prescient as CTV commerce media demand grows), Instacart (unique position as grocery data platform for challenger brands), and regional grocery chains running their own networks (Kroger, Albertsons, H-E-B each have first-party data programs that are producing measurable CPM premiums).

At risk: Traditional TV and CTV platforms that lack first-party transaction data. Programmatic display networks that compete on contextual targeting rather than shopper data. Mid-tier publishers who have competed on premium context but can’t offer purchase-linked measurement.

The risk for traditional media isn’t that commerce media replaces it — it’s that commerce media sets a measurement standard that traditional media can’t match. When a CMO can show the CFO that Walmart Connect CTV produced a measurable ROAS through closed-loop grocery data, the brand safety and brand building arguments for traditional TV become harder to justify without equivalent measurement.

The Measurement Evolution: From ROAS to Full-Funnel Commerce

The measurement architecture for commerce media is evolving rapidly beyond the simple ROAS reports that defined the category’s first generation.

Early retail media measurement was essentially performance advertising measurement — attributed sales divided by media spend, with the retailer’s transaction data as the attribution source. Simple, direct, and often misleading because it didn’t account for baseline purchase rates or incremental media effect.

The current evolution is toward full-funnel measurement that maps commerce media’s role in awareness, consideration, and conversion. Amazon Marketing Cloud’s clean room capabilities allow advertisers to run path-to-purchase analyses that show which combination of Sponsored Product, Streaming TV, and DSP display touchpoints drove the highest conversion rates. This is genuinely useful incremental measurement.

The IAB’s Commerce Media Committee, launched in late 2024, is working on measurement standards that would allow cross-network comparability — the persistent problem identified in retail media’s $60B measurement-standards-not-keeping-pace narrative. Progress has been modest, but the committee’s existence signals that the industry recognizes standardization as a prerequisite for the category’s next phase of growth.

What This Means for Media Planning in 2025

Commerce media’s growth at the expense of paid search growth implies a media planning shift that isn’t yet reflected in most brand planning frameworks.

The traditional media mix model treated paid search as the intent-capture layer, programmatic display as the reach layer, social as the engagement layer, and TV as the awareness layer. Commerce media doesn’t fit cleanly into this framework because it can function at multiple funnel stages simultaneously — driving awareness of a new SKU at scale, retargeting lapsed buyers, and capturing purchase intent in a retailer’s own search results.

Brands that are planning commerce media as a “trade marketing” budget separate from “media budget” are misallocating resources. Commerce media, particularly off-site and CTV activations against retailer audiences, is full-funnel media. It should be planned, measured, and optimized as part of the integrated media strategy — not siloed in a trade promotion line item managed by the shopper marketing team.

The brands executing most effectively on commerce media in 2025 are treating it as a first-party data activation program — working directly with retailer data teams to build audience segments, running incrementality tests to establish causal contribution, and integrating commerce media reporting into their unified measurement models.

FAQ

Q: Is commerce media relevant for brands that don’t sell through major retailers like Amazon or Walmart? Relevance decreases significantly without a retail partnership that provides transaction data. Brands sold primarily direct-to-consumer can build their own commerce media equivalent using their own first-party purchase data — which is essentially what DTC “retention marketing” has always been. The structural advantage of retail commerce media specifically is access to transaction data at a scale that most brands can’t replicate independently.

Q: How does Instacart’s commerce media platform compare to Amazon and Walmart for CPG brands? Instacart’s unique advantage is grocery-specific purchase data across multiple retailers — because Instacart operates as a delivery layer on top of multiple grocery chains, it has transaction data that spans more retail touchpoints than any single retailer. For CPG brands in food and household, Instacart’s cross-retailer audience data is differentiated. For brands that primarily sell through non-grocery channels, the relevance decreases.

Q: What is the minimum spend threshold for commerce media to be worth measuring incrementally? Meaningful incrementality measurement requires sufficient statistical power — typically $100K+ per network per quarter to run a holdout test with valid confidence intervals for most CPG categories. Below that threshold, directional ROAS reporting from the network’s own attribution is the practical measurement option, with appropriate skepticism about baseline purchase behavior.

Q: How should brands handle the complexity of running both search ads on retailer platforms and off-site commerce media through the same retailer network? Unified planning matters here — treat onsite retail search and offsite commerce media as parts of the same customer acquisition funnel rather than separate programs managed by different teams. Audience sequencing (offsite awareness for new-to-brand users, onsite sponsored products for consideration-stage users who are actively shopping) is the optimization approach that sophisticated commerce media buyers are using.