Commerce media network (CMN)

What is a commerce media network?

A commerce media network, or CMN, is a digital advertising ecosystem that uses a company’s first-party customer data to enable advertisers to connect with those customers across multiple marketing channels. 

Most large companies already use the first-party customer data they collect to power their own marketing, sales, and product development strategies. A CMN packages the same first-party data for other brands, which in turn use it in their own marketing efforts.

Because the same company controls all the channels in a commerce media network, advertisers can orchestrate marketing campaigns across multiple channels more efficiently, target prospects more effectively, and connect with prospects and customers more easily throughout their purchasing journey. This improves their return on ad spend (ROAS). 

Building a CMN enables its owner to turn existing first-party data into a new, high-margin revenue stream without detracting from its primary business. Their effectiveness is reflected in their rapid proliferation and growth: CMNs are projected to capture more than 20% of corporate advertising budgets by 2027 — more than $100 billion in revenue. And their compound annual growth rate from 2023 to 2027 is projected at 21%, far outpacing display, connected television, and even search-based ads. 

What’s the difference between a commerce media network and a retail media network?

To understand the difference between commerce media networks and retail media networks, it is helpful to first know what a commerce media network is and how it operates, and vice versa.

Retail media networks (RMNs) are a subset of commerce media networks: They are essentially CMNs owned by and designed for consumer packaged goods (CPG) companies and other online retailers. Each RMN is a large group of affiliated online and in-store locations where marketers can purchase ad space. The first-party data the RMN provides comprises information about demographics, transactions, and engagement; the ads are intended for buyers who are already browsing for and purchasing other products.

Commerce media networks move beyond the retail sector. They’re run by online travel agencies, delivery and ride-share apps, sports and entertainment conglomerates, automobile marketplaces, as well as real estate, financial services, and healthcare companies. Each vertical can provide information about consumers specific to their business and/or an industry-specific pool of prospects for advertisers, adding value to the first-party data the CMN offers. 

For that reason: 

• More than 50% of advertisers say they plan to shift up to 21% of their budgets from social media, digital display, and search ads to a CMN. 

• Eighty-six percent of advertisers surveyed believe that ads on CMNs perform better than those on other digital channels

• Eighty percent are already advertising or planning to advertise on a CMN. Those advertisers come from a wide range of verticals: electronics, automotive, finance, healthcare, travel, and even consumer package goods, which have traditionally favored retail media networks. 

• 58% of brands and 51% of agencies that advertise on RMNs say they’re interested in moving some of their ad spend to a CMN. This trend is reflected in the growth of vertical-specific CMNs: Those owned by financial services companies, for example, are projected to capture $1 billion in ad spends in 2026.

Examples of commerce media networks

Finance

While the source of a retailer’s first-party transactional data is limited to its own website, a credit card company’s first-party data provides a holistic view of all purchases a consumer makes. This enables advertisers across many verticals to build better audiences based on a broader understanding of each prospect’s purchasing history and behavior. 

MasterCard and PayPal operate two of the world’s largest financial media networks.

Travel and media

Conversely, a ride-share app’s CMN provides brick-and-mortar retailers a way to target prospects in a specific location. This is a practical example of what a commerce media network is in action, showing how first-party data can be leveraged outside traditional retail. UberMedia, DoorDash Marketing, and T-Mobile’s Octopus Interactive are examples of such a CMN. 

Similarly, United Airlines’ in-flight ads leverage data on travelers to deliver content personalized based on destination and travel history via the entertainment panels passengers are already viewing.

Other large companies leveraging their first-party data in a commerce media network include Instacart, FreshDirect, Chase, Credit Karma, Expedia, Planet Fitness, and Tripadvisor.

How do commerce media network campaigns work?

Types of advertising

Advertisers typically work with a commerce media network’s team through a direct sales process to target specific audiences and run tailored ad campaigns on behalf of the advertiser on the retailer’s owned channels (website, app, or email) or offsite through a demand-side platform (DSP). 

 ads can include:

• Display or banner ads on websites

• Video ads on social media platforms like YouTube, Facebook, LinkedIn, and TikTok

• Native ads designed to blend in with the content on a specific webpage

• Sponsored ads on search engine result pages (SERPs) as well as product detail and browse pages

• Offsite or “up-funnel” ads that appear farther from an actual point of sale, on affiliated CMN channels such as mobile apps, promotional emails, streaming platforms, public WiFi portals, and real-world digital billboards and displays. 

Alternatively, the CMN can make the audience available to the advertiser to use offsite as they choose.  

Programmatic advertising

While most CMNs still rely primarily on direct sales, some incorporate autormated programmatic activation for offsite use cases. Programmatic advertising is an automated way to buy and sell digital ad space via real-time auctions for ad impressions on DSPs or SSPs. Many CMNs rely on programmatic direct or private marketplace (PMP) deals executed through DSPs such as The Trade Desk or DV360, which are often facilitated by SSPs like Magnite on the sell side.

Programmatic advertising campaigns typically include these steps: 

1. The CMN owner provides information on the ad space, audiences, and channels available to advertisers.

2. The advertiser defines the campaign, selecting audiences, budget, ad formats, and channels.

3. The advertiser bids on the ad space or agrees to a fixed CPM for a programmatic direct deal.

4. The ads of the winning bidder are served to the appropriate channels and targeted to the specified audience.

5. The advertiser is provided with insights based on campaign performance. 

6. Those data-based insights are analyzed and used to optimize future ad spend, ad targeting, and campaign design.

Other advertising models

Some large CMNs, including Amazon, Roku, and Uber, offer self-service platforms that allow advertisers to control their campaigns directly in the CMN ecosystem rather than through programmatic advertising.

Other CMN owners partner with their advertisers, negotiating media buys and ad placements directly rather than via an automated platform. Such partnerships often include sponsored listings and custom content placements, and the partnership may extend beyond the realm of advertising. For example, streaming media services are partnering with retailers to enable viewers to purchase products featured in a TV show or move in real time, without ever leaving the streaming app.

In highly regulated industries like financial services and healthcare, where data privacy is paramount, CMNs may create cooperatives where anonymized aggregated data is shared only with strictly vetted advertising partners that buy access to the cooperative rather than to the first-party data itself, so network owners can ensure that they remain in compliance with data governance regulations and laws.

Benefits of commerce media networks

Commerce media networks are successful in part because they benefit all parties involved: advertisers, owners, and customers.

Benefits for advertisers:

• Increased return on ad spend - Because CMNs use first-party data and provide access to channels and platforms that are otherwise beyond an advertiser’s reach, they help marketers personalize their messaging more effectively and target their ad spends more efficiently across a wider range of channels. This leads to better engagement with prospects and customers, higher conversion rates, increased purchase frequency and sales revenue, elevated brand awareness, and improved customer lifetime value.

• More accurate ROI calculations - CMNs are data-driven and accurately link ad impressions to purchases; the analytics they provide enable advertisers to understand audience behavior and refine decisions about inventory, sales, marketing resources, and ad budgets. 

Benefits for owners:

• Increased revenue via nontraditional revenue streams - By capitalizing on an existing commodity — first-party data and audiences — CMNs provide an ongoing high-margin revenue stream separate from their core business. Owners also realize revenue from the ads themselves.

Benefits for customers:

• More personalized online experiences - The precision targeting that CMNs enable means that consumers see ads for products and services in which they have an active interest, helping them discover new brands, engage more deeply with their favorite brands, and making it easier to comparison shop.

• Cost-savings - Revenue from CMNs may offset overhead costs, allowing CMN owners to price their own products and services more competitively.

How do I build a commerce media network? 

Underlying a typical commerce media network is a tech stack comprising the following four platforms:

1. A cloud-based enterprise data warehouse 

A modern commerce media tech stack starts with your data cloud and golden record data store as the anchor. 

A data cloud-based warehouse unifies first-party data creating a single source of truth and enabling zero-copy, which eliminates data silos. This centralizes all first-party data, enabling the CMN to provide an accurate, 360-degree view of each customer. It also eliminates risky imports from and exports to data sources often housed in siloed adtech and martech platforms. 

Among the most commonly used cloud-based data platforms are Google’s BigQuery, Amazon’s Redshift, Snowflake, and Databricks.

2. An audience and intelligence layer

This type of platform — often a composable customer data platform (CDP) or Compound Marketing Engine — sits atop the data warehouse. It provides tools for audience building, campaign performance analysis, and campaign optimization across all available marketing channels, as well as the other platforms in the tech stack. 

These platforms often employ AI to surface new opportunities and insights. They also typically include self-service technology to empower marketers to work with data directly, relieving the ad ops team from rote data-related tasks. 

Most importantly, these composable tools feature a closed-loop architecture that feeds CMN campaign performance insights back to the data warehouse, so advertisers can use it to optimize campaigns more effectively.

3. An on-site ad server

An on-site ad server powers monetization of your owned digital property inventory. It delivers sponsored search, homepage banners, and product ads directly within your ecosystem, turning shopper traffic into high-margin media inventory.

Moloco, Kevel, Koddi, and Criteo are all well-known onsite ad servers.

4. Demand-side platform for off-site activation

This provides a single interface for bidding on and purchasing different types of digital ads from the CMN’s various channels, or even other CMNs. It is an integral part of programmatic advertising. 

A demand-side platform may also serve those ads across many types of channels, from banners on search engine results pages to in-app ads on cell phones to native videos in social media feeds. 

Popular platforms include Kevel, Koddi, The Trade Desk, Xandr, and StackAdapt.