Commerce media has spent years riding a wave of new advertising dollars. But soon, the industry will need to prepare for a future in which growth comes at someone else's expense.

• According to EMARKETER's forecast, annual incremental commerce media ad spending will peak at approximately $17 billion in 2027 before declining through 2030.

The money isn't drying up. But the pool of new spending that has helped fuel commerce media's expansion is approaching its peak, while more new players are lining up for a piece of it.

“The opportunity to simply compete for new spend is getting smaller, and meanwhile, the pressure to generate and create new demands is increasing,” said our analyst Sarah Marzano during a "The Next Era of Commerce Media" presentation held during Advertising Week New York.

For commerce media networks, the next opportunity lies in budgets that already have a home. Social media, paid search, and connected TV (CTV) command substantial portions of advertisers' media plans, and winning a share of that spending will require more than offering another way to buy ads on those channels.

Easy money had a good run

Commerce media had a head start that most advertising channels could only envy. Retailers and other commerce businesses already had established customer relationships, purchase data worth its weight in gold, and something even more precious: consumers who showed up ready to shop.

Turning those advantages into advertising revenue was a relatively straightforward proposition. Brands could reach shoppers closer to the point of purchase, while commerce media networks could monetize traffic and shopping activity they already had,

That means commerce media networks need to do more than reach consumers who already know what they want. They need to help shape purchasing decisions earlier in the shopping journey, putting them in direct competition with established advertising channels for budgets that are already spoken for.

More inventory is less of a selling point

Commerce media networks have spent the past several years expanding beyond their owned properties, connecting their audiences and transaction data to social platforms, CTV, search, and the open web.

On paper, the pitch makes sense. Commerce media brings purchase data and attribution capabilities. Social and CTV bring reach and opportunities to influence consumers earlier in their shopping journeys.

But advertisers haven't necessarily followed those integrations with meaningful spending.

Despite years of integrations, spending through retail media networks on social platforms and traditional search remains a small share of either channel’s overall advertising business, Marzano said.

“Simply making more supply available isn’t necessarily equivalent to guaranteeing advertiser demand,” she said.

Advertisers already have ways to buy ads on these platforms. Routing those purchases through a commerce media network introduces another layer of cost and complexity. That leaves advertisers wondering what they gain in return.

Give advertisers something they can't buy elsewhere

Rather than acting solely as intermediaries, some commerce media networks are investing in what Marzano called “attention assets that advertisers can only get through them.”

Marzano pointed to Walmart's acquisition of Vizio as one example, giving the retailer a foothold in CTV beyond partnerships with existing platforms. She also acknowledged that other retailers are experimenting with exclusive content and experiences that make their advertising offerings harder to replicate.

The idea is to give brands a reason to choose a commerce media network beyond its ability to connect purchase data to someone else's inventory.

Not every network needs to own a streaming platform or build a content studio. But each needs to determine what it can offer advertisers that competing channels cannot.

Earning the next dollar

Even with more distinctive inventory, Marzano said commerce media networks still face a familiar hurdle: proving results.

Commerce media advertisers prioritize stronger performance outcomes, including higher sales lift, lower effective costs, and incrementality, when considering increased investment, according to Marzano. Expanded inventory ranks much lower among their motivations.

That's a reality check for networks hoping their growing footprints will translate directly into growing budgets.

And winning over upper- and mid-funnel advertisers will require a broader measurement vocabulary. Sales attribution may be commerce media's calling card, but it isn't the only outcome that matters to advertisers deciding where to invest.

Networks will need to demonstrate how their offerings contribute to brand discovery, customer acquisition, and longer-term business results, Marzano said.

For commerce media networks, that means taking a harder look at what they bring to the table and whether those advantages are compelling enough to change how advertisers spend.

As Marzano put it, networks need to be “really interrogating their right to win” when competing for budgets with new stakeholders and different priorities.

This was originally featured in the Commerce Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.