Retail and commerce media: ads where people buy

Search for toothpaste on a shopping app and the first results often say Sponsored. The brand paid the retailer to be there. That is retail media, and it has become one of the biggest forces in advertising, because retailers know something most media owners never could: what you actually bought.

Retail media is the digital version of paying a supermarket for the shelf at eye level. The difference is that the supermarket can now tell the brand exactly how many people saw that shelf and how many of them put the product in their basket.

From retail media to commerce media

A retail media network (RMN) is a retailer's own ad business. The idea spread from retailers to anyone with transaction data: delivery apps, travel sites, payment companies, ride-hailing and marketplaces. The umbrella term is commerce media.

On-site vs off-site

There is also in-store retail media: screens in aisles and at checkouts, sometimes sold programmatically like DOOH.

The closed loop

The magic word in retail media is closed-loop measurement. Because the retailer sees both the ad exposure and the purchase, it can tie them together without relying on third-party cookies. It does this inside its own systems or through a data clean room so the brand sees aggregated results, not customer lists.

1. Retailers know what you buy: Every loyalty card swipe and online order is first-party data: what was bought, when, and by whom.
2. Brands pay to reach those shoppers: A cereal brand pays the retailer to advertise to people who buy breakfast foods. The retailer runs a retail media network.
3. Ads on the store itself: Sponsored products appear right where people shop, at the moment of decision.
4. And off the store: With off-site retail media, the retailer’s audiences are used to target ads on other websites, apps and streaming TV.
5. Closing the loop: Because the retailer sees both the ad and the purchase, it can report sales driven by the campaign: closed-loop measurement. That proof is why budgets moved here fast.

1. Shopper dataLogged-in shoppers' browsing and purchase history builds audiences such as bought baby food in the last 90 days.
2. Ad servedA brand targets that audience on-site or off-site.
3. PurchaseThe shopper buys, online or in a store with a loyalty card.
4. ReportThe retailer reports sales, ROAS and new-to-brand customers tied to the campaign.

Why retailers love it

Selling groceries or electronics is a thin-margin business. Selling ads on the same digital shelves is a high-margin one, because the retailer already has the traffic, the logged-in customers and the sales data. Brands also often fund retail media from trade marketing budgets they once spent on in-store promotions, so the money is not always new to advertising. That combination explains why so many retailers, from supermarkets in the UK to quick-commerce apps in India and marketplaces in Brazil, have launched ad businesses in just a few years, and why the biggest networks increasingly look like full ad-tech companies with their own DSPs and clean rooms.

Fragmentation and standards

With hundreds of retail media networks, each with its own metrics, buying tools and attribution windows, brands struggle to compare them. Industry bodies including the IAB and the MRC have published retail media measurement guidelines to standardise definitions of impressions, clicks and attributed sales.

Invalid traffic in retail media

• Bot clicks on sponsored listings: price-scraping bots and competitors' bots can click on CPC ads, draining budgets.
• Off-site inherits open-web risk: once retailer audiences are activated on the open web, made-for-advertising sites, domain spoofing and bots apply.
• Fake engagement: fake reviews and fake accounts can distort which products the retailer's own algorithm promotes.
• Measurement gaps: if on-site IVT filtering is not independently verified, brands have to trust the retailer's numbers.