Unpacking The Shift To Commerce Media In Digital Advertising

Yet another big shift is happening in digital advertising - a few years into retail media’s rise, and experts now expect “commerce media” to supersede retail media in conversations moving forward. Experts also predict that the commerce media industry will be one of the most important playgrounds for AI in advertising.

To date, “commerce media” has often been used interchangeably with “retail media.” In order to determine whether the two terms actually are interchangeable, I connected with experts at Koddi, a leader in retail and commerce media technology that builds infrastructure for several top commerce media networks. They have an inside understanding of the intricacies that make these ad channels tick, and how networks can differ from one another based on verticals.

The short answer: commerce media is not interchangeable with retail media. Furthermore, according to Koddi, moving forward commerce media will become the top ad channel everyone refers to as an umbrella including verticals like retail, travel, hospitality, and finance.

Read on for more about what this means for digital advertising.

Beyond Retail Media

“Retail media evolved naturally from trade marketing; a practice rooted in decades of experience. While it initially centered on optimizing product visibility within ecommerce, that scope has expanded rapidly in recent years. Commerce media now captures how this model applies beyond retail—whether in travel, finance, or automotive. It’s about seeing the bigger picture of how these different sectors converge. As we move forward, commerce media will be the framework for creating a more integrated and personalized ad experience, improving how consumers engage across industries every day, “ said Koddi President and Co-founder Nicholas Ward.

From Koddi’s perch, commerce media encompasses individual sectors like retail or finance, optimizing and bridging media touch points more holistically across the consumer experience. This tracks with what we’ve seen over the past year or so, with a bevy of drastically different companies entering the space. New commerce media players include not only retailers, but also banks, airlines, payment processors, and hospitality and travel networks.

The single biggest shift driving the rise of commerce media is this widening of focus beyond ecommerce retailers. Other companies are recognizing that the same person who buys milk at Kroger is also shopping on Amazon, as well as traveling, purchasing cars, using PayPal and banking online. Commerce media looks at all of these touchpoints, rather than zeroing in on a single moment in a consumer’s experience.

The Tech Story
The expansion beyond retail is also spurred by technological advancement. While retail media may have its roots in the decades-old practice of trade marketing, the modern digital landscape has opened up new spaces to apply this model in other industries.

"Delivery apps didn’t just streamline delivery—they redefined customer acquisition. Restaurants can now engage high-intent customers exactly when they’re ready to order, turning what used to be passive discovery into immediate action," said Koddi VP of Product Trevor Narayan.

Nowadays, with membership programs like Amazon Prime, companies can amass a huge repository of signals to track consumer interest, which advertisers can leverage to deliver extremely timely, targeted messaging on-site and elsewhere. According to a recent Prosper Insights & Analytics survey, over 50% of Gen-Z (the generation that shops online the most, according to Capital One) have an Amazon Prime membership. Technological advancements, in combination with the increasing prevalence of tech-native generations, opens the door for more companies to succeed using Amazon’s model.

As a result of digital evolution, companies from a variety of backgrounds can now activate data better than ever. This is a major part of why experts predict that retail media will quickly come to be viewed as a subset of commerce media - with commerce media being the overall category for this type of advertising engagement where companies leverage first-party data to enable brands to connect with customers in ways that enhance the consumer experience.

A great non-retail example of this expansion is PayPal, which recently announced plans for its own commerce media ad platform. The Prosper Insights & Analytics survey also found that 56.2% of Millennials, 48.8% of Gen-Z and 48.7% of Americans age 18+ use PayPal. As a result, PayPal sits on a wealth of commerce signals that are invaluable for optimizing all manner of marketing and advertising efforts. As payment options are increasingly woven directly into various consumer touchpoints on the shopping journey​, this positions PayPal to create value for advertisers and (hopefully) an enhanced experience for consumers who frequent the payment platform.

AI is perhaps the most exciting piece of the commerce media tech story. Commerce media offers a virtually limitless proving ground for all kinds of AI models - during a time when investors are hungry to see AI working profitably.

“Commerce media is an amazing stage for AI, particularly because you can observe different AI models creating value in many different ways, on all sides of the performance advertising business,” said Nanda Lella, Koddi’s Chief Technology Officer.
It’s still early, but Koddi’s team pointed out three types of AI already showing outsized impact across commerce media:

● Deep Learning in Trend Prediction

The predictive nature of AI takes center stage in commerce media because data is truly king in commerce media. With strong zero and first-party data, AI can help buyers analyze historical customer interactions, purchasing behavior, and contextual signals in real time. Deep learning models can also anticipate user needs, show relevant content, and predict future trends.

Machine Learning in Campaign Optimization

Insight-driven campaigns are the new normal. Until now, the bulk of marketing and ad campaigns have been largely reactive. AI shines here because it encourages marketers into a much more proactive approach to planning budgets and initiatives.

● Generative AI in Advertising Creative

Generative AI greatly reduces the cost to scale creative, requiring a much smaller initial investment of resources. Koddi predicts that this kind of AI will make static ads a distant memory, based on its ability to automate the timely creation of personalized, custom creative that is informed by contextual data like geographical location, local pricing or even weather conditions.

The industry is leaning into AI applications because by and large they enhance workflows, as well as enrich interactions between publishers, brands, and consumers. As such, it makes sense that AI would be a key tool for enhancing the customer experience and creating a sustainable ecosystem, if commerce media is to become a top advertising channel, as it seems to be moving toward.

As digital advertising expands, commerce media seems poised to reshape the landscape in profound ways. The driving force behind this paradigm shift is its ability to leverage consumer signals from more than just retail to seamlessly bridge every stage of the consumer journey. And extremely close to the heart of this trend is AI. As AI models become more and more integrated into commerce media strategies, experts expect that advertisers will hone their ability to deliver more timely and targeted ads that better cater to each consumers’ needs and preferences. This fusion of technology and data is what makes commerce media not only the next frontier of digital advertising but also a crucial proving ground for AI innovation, driving value for both businesses and consumers alike.

Credit : Forbes Magazine

Byju’s founder says his edtech startup, once worth $22B, is now ‘worth zero

Byju Raveendran, the founder of the embattled edtech group Byju’s, acknowledged on Thursday afternoon that he made mistakes, mistimed the market, overestimated growth potential, and that his startup, once valued at $22 billion, is now effectively worth “zero.”

Speaking to a group of journalists, Raveendran said the company’s aggressive acquisition of more than two dozen startups to expand into new markets proved fatal when financing dried up in 2022. Byju’s was planning to go public in early 2022 with several investment bankers giving the firm valuation as high as $50 billion, TechCrunch reported earlier.

He alleged that many of his more than 100 investors had urged him to pursue aggressive expansion into as many as 40 markets. But, he added, those very investors got cold feet when global markets tumbled following Russia’s invasion of Ukraine, sending the venture capital market into a downward spiral.

Raveendran said many of his investors “ran away,” and the departure of three key backers — Prosus Ventures, Peak XV, and Chan Zuckerberg Initiative — from the company’s board last year made it impossible for the startup to raise additional funds.

Representatives of the aforementioned three firms as well as auditor Deloitte left the startup’s board last year, citing governance issues.

Byju’s has since entered insolvency proceedings, and Raveendran, who no longer controls the company, said: “It’s worth zero. What valuation are you talking about? It’s worth zero.”

Byju’s, once India’s most valuable startup, counts BlackRock, UBS, Lightspeed, QIA, Bond, Silver Lake, Sofina, Verlinvest, Tencent, Canada Pension Plan Investment Board, General Atlantic, Tiger Global, Owl Ventures, and World Bank’s IFC among its backers. It has raised more than $5 billion to date.

Raveendran said he remains hopeful that his startup will make a comeback. “I have nothing to lose. I came from a small village. I invested everything I had into the startup.”

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Many years ago, while in primary school, I remember having to complete an experiment on soil. I think the subject was called Environmental Studies and I had to present a project to show how soil worked.

We were told to get a jar, go into the garden, and get sand, pebbles, stones, and small rocks. We then had to put all these ingredients into a jar.

At first, I tried to put the sand in first then the pebbles, and then the stones. Unfortunately, I could not get the small rocks in – there just wasn’t any space!

With my mother’s help, and after following the instructions, I tried the experiment again, this time getting the order right: I needed to get the big rocks in first, followed by the stones, then the pebbles, and finally the sand. By following this order, everything fitted in and the fine sand easily flowed between the pebbles and rocks. The experiment worked and I also learned a little about soil that day…

“Fools think their own way is right, but the wise listen to others.” (Proverbs 12:15)

This illustration is also a great money management principle. When you look at your budget, you often have it filled with a bunch of small items, and then when you try and fit the bigger (more important) items in – it just doesn’t fit.

“Do your planning and prepare your fields before building your house.” (Proverbs 24:27)

It is important to get our financial priorities into our budget first. We first need to put “the rocks” into our budget: important elements like first giving to God, followed by our savings and investments. The truth is if these “rocks” are not put in first, they just won’t fit in. We also need to include our other “rocks” like our bond or rent payments and living expenses. Only once these “rocks” are in our budget, should we start adding the “pebbles”, our nice-to-haves, and the “sand” items, which are the luxuries.

You need to get your priorities in the right order. I want to encourage you to get the ROCKS into your budget first. These rocks will help you build towards a more secure future and will lead to a brighter tomorrow.

By the way, one thing I learned from the soil experiment is that by having the rocks in first, followed by the stones, then pebbles and sand, is that this soil composition leads to healthy fertile ground, with good drainage that really helps plants to flourish and thrive.

If you get the rocks in your budget first, with your priorities in the right order, just maybe you will set your finances up to be fruitful and flourishing over the next 10 years.

“The Lord will greatly bless his people. Wherever they plant seed, bountiful crops will spring up.” (Isaiah 32:2