• by Laurie Sullivan  @lauriesullivan, Today

Google has expanded its commerce media suite, giving brands and retailers AI-powered tools across platforms like Search, YouTube, and Display & Video 360.

The goal to optimize campaigns, collaborate and drive measurable results makes commerce media the next step in the evolution of digital marketing and retail media networks, the company announced this week.

By 2029, commerce media will represent nearly one-quarter of advertisers’ digital media budgets in the U.S., reaching $118.4 billion, according to Emarketer’s forecast.

Emarketer estimates that commerce media ad spend will have a compounded annual growth rate of 15.3% between 2025 and 2029.

Growth continues to explode because these networks are viewed as advertising ecosystems that have expanded beyond retail for industries as varied as financial services, travel, and even healthcare.

They can integrate ads directly into the customer experience across multiple online and offline channels.

Based on McKinsey's market forecast, 2027 projections for U.S. commerce media surpass $100 billion -- representing about 20% of advertising budgets, outpacing display, connected television (CTV) and search. 

Commerce media is shifting beyond consumer packaged goods (CPG) into other advertiser categories, and that innovation is spurring competition.

Nearly half of advertisers in a McKinsey study of 100 companies plan to increase their spending in commerce media in areas beyond retail media. They are also diversifying their strategies by focusing more on performance, offsite audiences, and new ad products.

Roundel, Target’s retail media business, became the first to enable online, app and offline sales data measurement in Google Performance Max via Search Ads 360. Google Ads also supports Search, Shopping and Demand Gen campaign.

Google also said its Ads features improved self-service options for retailers and marketplaces, like Shopee, Rakuten and Flipkart to share product catalogs with brands.

In May at NewFronts, Google announced it would bring commerce and retail media to YouTube via Display & Video 360.

A Google pilot also launched that enables product-level attribution and measurement, so brands and retailers can assess the effectiveness of media spend against product and category sales data.

Commerce media networks have become popular because investments are made in multiple ad formats — digital and physical, such as shoppable video, in-store ads, and interactive display ads to boost engagement and relevance, and drive higher returns.

They can support brands willing to spend ad dollars on new kinds of ads, according to McKinsey & Company, whose analysts believe commerce media is the latest shift ready for “tremendous growth.”