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10 minutes of expert insights every weekday. Your morning ritual for staying ahead in retail media.
Six Paths Through the Commerce Media Squeeze
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[00:00:00] Kiri Masters: Last month, I wrote a piece for my column at The Drum defending retail media against the people who call it a tax on brands and a rounding error dressed up as a channel, and I stand by all of it.
[00:00:12] So it might read as a strange pivot to [00:00:15] open this week by saying that a good chunk of the networks now in market are not going to make it. But both things can be true. Hear me out.
[00:00:24]
[00:00:25] Kiri Masters: The dismissers of retail media build their case [00:00:30] on two facts that are correct. Retail media is mostly Amazon. Retail media is mostly sponsored product ads, and therefore the rest doesn't matter.
[00:00:42] But it's that last part, the [00:00:45] logical leap that the rest doesn't matter, that is the fallacy that I took apart last week. But the opportunity being real doesn't mean that there's room for everyone. You can believe, as I do, that non-Amazon retail [00:01:00] media is a serious and generally under-executed business, and still do the napkin math and wince.
[00:01:07] US retail media ad spend
[00:01:10] will hit $69 billion in 2026 per [00:01:15] eMarketer. And of that 10 and a half billion in new spending 9.4 goes to Amazon and Walmart. That is 90% of the growth in this space shared amongst the two companies that [00:01:30] already dominate the space. A database maintained by a software company, Mimbi, currently tracks two hundred and seventy retail media networks worldwide, and that's before you count the commerce media crowd now [00:01:45] spilling out across financial services, payments, travel, mobility, and education.
[00:01:51] So that's a couple hundred plus networks eyeing a tenth of the year's growth.
[00:01:56] Some of these networks were always going to be [00:02:00] disappointed, and not because the opportunity isn't there, but because they were sold a number that never had a chance. The management consultants arrive, they size the opportunity, they unfurl a hockey stick chart that looks [00:02:15] magnificent on a boardroom screen, ~and stay available to course-correct when it doesn't pan out.~
[00:02:17] ~What luck. ~And stay available to course-correct when it doesn't pan out. What luck. ~Though current and former consultants tell me that it's often the retailer's own leadership team that demands the numbers get pumped up because a sober forecast doesn't get a media business funded. Either way, we're left with the same hangover.~
[00:02:23] ~I'm just gonna go back and re-do that part. ~Though the current and former consultants tell me that it's actually often the retailer's own [00:02:30] leadership that demands that the numbers get pumped because a sober forecast doesn't get a media business funded. Either way, we're left with the same hangover. The canny leaders decline the jobs where they'd be set up to [00:02:45] fail
[00:02:45] Which brings me to the point of today's episode, and that is that the IAB, the Interactive Advertising Bureau in the US has put a name to this reckoning. In April, they [00:03:00] released a white paper named Building a More Competitive Commerce Media Ecosystem, and it opens with a line that hits pretty hard.
[00:03:09] "Over the next 24 to 36 months, networks that don't make explicit [00:03:15] strategic choices will be implicitly sorted by the market, often in ways they did not intend." The paper's real argument is that chasing scale is the wrong default for almost everybody, and that many networks [00:03:30] have quietly assumed that they're in the small club that is going to make it Flywheel's 2026 Commerce Trends Report sizes up the gravity they're fighting.
[00:03:40] Global leaders led by marketplaces will account for [00:03:45] 57% of all sales added between 2025 and 2030. When more than half of the growth is spoken for before the gun goes off, we'll get there on volume isn't a viable plan. [00:04:00] So the IAB offers six paths through the commerce media crunch instead And as I read this white paper, it reminded me of so much of the profiles that I've done of retailers who are knowingly or not [00:04:15] already running most of these playbooks.
[00:04:18] So now I'm gonna recap these six paths through the commerce media crunch. Path one is the one everybody wants and almost nobody can realistically afford, which [00:04:30] is to build the full stack, full funnel self-serve platform and go after national brand budgets head-on.
[00:04:38] Now, the IAB is very blunt about the investment required here. You need a marketplace model. [00:04:45] You need a mountain of first-party data. You need the stomach to lose $100 million-plus over several years before things start to turn around. Now, Best Buy is a great case of ~a category retailer making this bet without...~
[00:04:56] ~Oh, gosh, that's not true. They do have a marketplace. Now, Best Buy, now Best Buy is ~a category retailer making this bet. The [00:05:00] president of Best Buy Ads. Lisa Valentino, her ambition is to grow the off-site aspect of Best Buy Ads meaningfully larger than on-site, and this is a company that is rebuilding itself around [00:05:15] media, not simply bolting on an ad business onto the side.
[00:05:18] Path number two is the one with no press release in it. You take a modest share, you run lean, you stay genuinely [00:05:30] profitable, and the IAB frames this path as treating media as a margin lever rather than a growth engine. But here's the harsh truth: it requires saying no to scale ambitions.
[00:05:42] Now, this is the path that the hockey stick [00:05:45] problem makes almost impossible to choose because declaring yourself a path two business reads as a failure to a board that may have been sold on path one. Molly Gelm at Ace Hardware's [00:06:00] Red Vest Media got the rarest gift in this category. When she asked what the year one expectations were for Red Vest Media, leadership said, you come in and you tell us.
[00:06:13] And that breathing room is the whole [00:06:15] precondition for path two. it, a perfectly healthy business gets managed like a dying one, which is precisely how the doom loop gets started. Path three is merchant integration. Path three treats media as a tool for category growth and merchant outcomes rather than a [00:06:30] standalone ad shop.
[00:06:30] The
[00:06:36] IAB's own risk note gives the game away. Media can go invisible clear ownership, and the model demands [00:06:45] the kind of cultural change that most organizations would rather not attempt.
[00:06:49] The Home Depot is the most committed version of this that I've seen. At its In Front event this year, the company did something that you'd never catch at Amazon's [00:07:00] Unboxed event. It put the merchants on the stage and on the agenda first. The opening keynote came from Billy Bastick, the head of merchandising.
[00:07:10] Merchandising VPs dominated the morning panels. Orange [00:07:15] Apron Media's own product leaders didn't appear until the afternoon. Bastick gave the philosophy a name, merchant-aligned media, and a memory to anchor it. Five years ago, a [00:07:30] merchandising colleague asked him whether he was gonna turn the website of Home Depot into Times Square with ads everywhere, and his answer was no, because product authority, not ad load, is the [00:07:45] asset that Home Depot can claim.
[00:07:47] A curated catalog earns the customer's trust that what they find belongs there, and an ad business that corrodes that trust damages the thing that the whole company is built on.
[00:07:59] This [00:08:00] positioning as merchant-aligned media is easier for a category specialist than for a mass market retailer. When you sell door locks and lumber rather than everything else from groceries to fashion, [00:08:15] the merchant's category expertise is the product, and media can credibly serve it
[00:08:20] And that's the subtext of this white paper from the IAB in my reading at least. For networks that never reach scale, the media business may be best governed [00:08:30] by the merchant. And that's an uncomfortable idea for both sides, both the media leader that is running a standalone P&L and the merchant who never really imagined themselves running an ad network [00:08:45] Miracle Ads is the Ad Tech solution trusted by Rakuten and over 50 global enterprise retailers. That's because Miracle Ads was built with both three P Marketplace [00:09:00] sellers and one P suppliers in mind. Both advertiser audiences demand a seamless advertising journey from onboarding to reporting.
[00:09:09] You can offer everything from sponsored products to video ads all in one solution. [00:09:15] Learn more@miracle.com. That's M-I-R-A-K l.com.
[00:09:21] Path number four is experience-led media, and this is where media is used to enhance the shopping experience rather than [00:09:30] interrupt it. Native formats, discovery context, and the IAB grants that this is difficult to scale and standardize and only works for a narrow set of players. But this is an exciting new realm for retail [00:09:45] media.
[00:09:45] Sam's Club's parking lot activations belong here with their race car simulators and all. The catch is that experience-led media at scale costs real capital and real organizational [00:10:00] alignment. It's defensible because it's very hard, which is why most networks would rather watch than copy The last two paths through the commerce media crunch have the least ego in them, which may be why they get the [00:10:15] least airtime.
[00:10:15] Path five is becoming the infrastructure that other networks run on, creating white label tech, data measurement, and making peace with vanishing from the advertiser's line of sight. Path six is competing by collaborating, [00:10:30] pooling reach across networks until you've built something that brand budgets will actually write a check for.
[00:10:36] Now on paper, path six is the obvious lifeline for the long tail of commerce media networks. If no single [00:10:45] regional retailer has the reach to really matter, a dozen of them together might make that case better. In practice, the US track record here is thin. I dug into this last year in a series about [00:11:00] federations and consortiums, and the picture hasn't really improved very much.
[00:11:06] Amazon's retail ad service landed Macy's as a marquee partner and has gone quiet on adding more. Best Buy's Lisa Valentino [00:11:15] pitched an open collaboration model last year, And as far as I can tell, no retailer has publicly taken her up on it. Ripple, a retail media network offered through Cardlytics Bridge platform, last signed up Hy-Vee's Red Media in [00:11:30] July of last year while banging a very loud PR drum, but has since gotten rather quiet.
[00:11:37] And the independent technology that these coalitions need is consolidating with publicists acquiring LiveRamp, a [00:11:45] backbone of the neutral coalition stack
[00:11:47] Ultimately federation models are difficult and they only work when governance, measurement, and incentives are explicitly aligned, says the IAB. Now I closed last week's column where I [00:12:00] rebutted the concept that retail media is mid With a worry that someone in the industry passed to me anonymously that retail media is feeling a little bit mid right now, but it doesn't have to be.
[00:12:13] It feels mid [00:12:15] because too many networks are running the identical playbook in fresh packaging and bracing for a different outcome. Outsource the selling, buy the cheapest tech, shelve the change management, ride the early sponsored product [00:12:30] margin. The IAB framework is really just a long way of saying you get out of this business what you put into it.
[00:12:37] What no framework can do is make the choice comfortable. Picking a path means saying out loud in a room full of people who'd rather keep [00:12:45] dreaming that your company is not the next Amazon. The IAB created the vocabulary for that conversation. Whether the networks can have it honestly is up to them
[00:12:56]