What’s the easiest way to ruin a great shopping experience? Trying to monetize every second of it.
Commerce media has created a billion-dollar opportunity, with US commerce media ad spend set to reach $83.71 billion this year alone. But for one group of commerce media players in particular — retailers — there’s a real risk in focusing too much attention on the advertising opportunity and forgetting what created that opportunity in the first place: the customer.
No matter how large a retailer's ad business is, most know that the true north star will always be gross merchandise value (GMV). GMV measures the total value of products sold — essentially, the size of a retailer’s core business. An ad format that creates friction, slows decision-making, or interrupts the path to purchase may generate ad revenue, but risks undermining that value.
So how can commerce partners, advertisers, and brands learn to walk this tightrope and create experiences that are additive, not dilutive?
TL;DR
- Commerce media is a fast-growing revenue opportunity, but for retailers, GMV remains the north star
- The most effective ads create value and enhance the shopper experience by being timely and relevant
- Dilutive ads disrupt the customer journey and can erode trust, which has long-term repercussions for revenue
- Creating an offer that’s additive is just as important in the post-transaction environment
Relevance’s Ad-vantage
As advertising continues to expand and new ad placements pop up everywhere from ChatGPT to connected vehicles, consumers are becoming more sensitive to anything that disrupts their experience. Just ask the BMW drivers who were recently bombarded by ads for the new Spider-Man film.
What’s more, according to Gartner, 81% of US consumers try to tune out ads, while 52% actively take steps to block them, using VPNs, ad blockers, or paying for ad-free content.
For brands, advertisers, and commerce partners, this disregard underscores just how important it is for ads to, well, add to the shopper experience rather than take away from it.
For advertising to be successful today, it needs to fit naturally into a moment, giving the customer something useful without getting in the way. Endemic advertising can be particularly effective at this, as it is inherently related to what consumers are already browsing for. For example, a skincare brand sponsoring search results on a cosmetics website, or a travel insurance ad appearing after a flight booking.
Other additive offers that feel natural and relevant include:
- A meal kit or wellness offer after purchasing a running shoe
- A rewards card, restaurant, or transportation offer after making a hotel booking
- Discounted transportation or nearby dining after buying a ticket to an event
The Cost of Friction
A dilutive experience, on the other hand, is the opposite of relevant and feels out of place. At best, it's annoying. At worst, it creates cost, rather than value, somewhere else in the journey. This can manifest as fewer consumer conversions, slower performance, reduced trust, or less intent to buy again in future.
Dilutive experiences often look like:
- Pop-ups, takeovers, autoplay videos, or sticky units
- Ads that slow page speed, shift content, or move buttons while a shopper is trying to click
- Multiple upsells that add unnecessary decisions and cognitive load before checkout
- Completely unrelated or irrelevant ads during product browsing or checkout
- Competing offers that undermine the value of a purchase
Extending the Experience
It’s easy to view these additive or dilutive offers as only relevant before the purchase. But it's just as important to consider how they play out in the post-transaction environment.
Many retailers and advertisers see the post-transaction moment as purely transactional. But the checkout is actually the perfect opportunity to extend engagement, with minimal disruption, at a time when intent is at its highest.
That’s why advertisers need to treat this moment with care. While an irrelevant ad or disruptive experience can’t derail the original purchase, it can still hurt trust, diminish loyalty, and consequently put future customer value at risk. Equally, a highly relevant or personalized offer can create incremental discovery and revenue.
Non-endemic ads are particularly suited to this post-purchase environment as they can reach customers who have a related need that doesn’t compete with the original transaction. For example, if someone has just purchased Taylor Swift concert tickets, an ad for her Disney+ documentary feels connected to the moment, rather than competing with the purchase they've already made.
Whether online or in-store, post-transaction ads should help the customer take a natural next step.
The Value Test
Advertising should feel like a helpful part of the journey, not a hurdle in the way of it.
Before launching any offer, it’s worth asking one big question: will consumers see this as something the retailer gave them, or something the retailer put in their way? More often than not, the answer will tell you whether you're creating value or friction.
Ultimately, a retailer’s priority isn’t impressions or even media revenue. It’s GMV. That means that advertisers and brands must remember that the goal isn’t simply to monetize attention, but to preserve the experience that creates it. After all, an ad can ‘win’ attention, but still lose the customer.
Curious about the hottest opportunities for retailers and advertisers?
Read our guide on non-endemic advertising or find out what separates loyalty from reacquisition.
