Addressing the Market Fragmentation & Standardization Crisis in Commercial Media

The commerce media landscape is experiencing a profound market fragmentation and standardization crisis that threatens to undermine the sustainable growth of this rapidly expanding sector. This crisis manifests in multiple interconnected dimensions that collectively create significant operational challenges for brands, retailers, and technology providers.

Here, we’ll explore how market fragmentation and a lack of data standardization are impacting the commerce media market. We’ll also reveal some insights into how brands can overcome challenges associated with this phenomenon.

Understanding the Scale of Commerce Media Market Fragmentation

Commerce media has witnessed explosive growth over the past few years, but this expansion has come with significant structural challenges. The growth of commerce media is now moving horizontally rather than vertically.

"Brands are having to make trade-offs, and brand-building budgets are being pressurized,” said one retail media leader at the 2025 Commerce Media Brand Summit.

As a result, "The absolute value of the spending is driven by every CPG company’s profit and loss,” said the speaker. "It’s not going to be incremental spend.”

In other words, most of the upcoming growth in the commerce media market will not be caused by expanding budgets. Instead, it will take the form of new entrants in places like Europe and emerging markets like Latin America.

The Rapid Growth of RMNs

The market growth and fragmentation have created a wealth of new networks.

According to industry data from 2025, there are now over 250 retail media networks (RMNs) operating globally, with more than 160 networks in the United States alone. This represents a dramatic proliferation from just a handful of major players five years ago, creating an increasingly complex ecosystem that brands must navigate.

However, the market remains highly concentrated among the top spenders and earners. Amazon and Walmart combined control over 84% of retail media ad spending in 2025, according to an eMarketer report. That means only 15% of the market can be distributed among the remaining 200+ networks.

This creates a paradoxical situation where the market appears oversaturated, but also highly consolidated simultaneously.

The "Walled Garden” Challenge Reduces Data Efficacy

A fundamental aspect of the fragmentation crisis is the pervasiveness of ”walled gardens” within commerce media networks. This refers to closed digital ecosystems controlled by a single company or group of brands.

Closed Systems and Inconsistent Standards

When every RMN operates in a walled garden, it operates with its own data formats, measurement methodologies, and reporting standards. This creates several critical challenges:

• Limited Data Transparency: Walled gardens restrict brands' access to comprehensive data, providing only the information that platforms choose to share. This lack of transparency makes it difficult for advertisers to understand true performance metrics and optimize campaigns effectively.
• Data Silos and Isolation: Each retail media network maintains its own data repository with restricted export capabilities. This fragmentation prevents brands from creating unified views of their commerce media performance across multiple platforms.
• Inconsistent Measurement Standards: Different networks define basic metrics like "conversions” and "impressions” differently, making apples-to-apples comparisons nearly impossible. Some platforms use 7-day attribution windows while others use 28-day windows, and approaches to handling returns and organic sales vary significantly.

Making Data Actionable Through Partnerships

When data from across different platforms isn’t standardized, it becomes difficult to use for attribution and other processes.

"In the retail media world, one of the common misconceptions is that we have excellent retail data,” said one speaker during a session at the 2025 Commerce Media Brand Summit. "But you need to be able to connect all that data to real people in the media world, across different platforms and walled gardens.”

Brands may need new partners or capabilities to draw value from that data. This way, they can "connect those ecosystems and make that data actionable,” as the speaker describes.

The Power of Multiple Data Sources

Organizations that can leverage first-party data tend to have more success identifying customers and touchpoints. They also have more opportunities to supplement other data sources and cross-reference data points to identify specific customers.

This was one of the key insights from First-Party Data Strategies in Commerce Media: An Industry Analysis, a 2025 report by Commerce Brand Media Summit Insights.

According to the study, 99% of advertisers said they use first-party data for retail media campaigns. Specifically, 75% use it for on-site retail media advertising and personalization, while 43% use it for off-site retail media network campaigns (some of the respondents said they use it for both).

Combining First- and Third-Party Data

Notably, among respondents using first-party data for retail media campaigns, 48% said they combined their first-party data with retailer first-party data. This allowed them to gain more contextual understanding for attribution and obtain value from otherwise unusable data.

Relying on Retail Partners for Insights

Using a different strategy, 39% of these respondents said they rely mainly on the insights from retail partners, which those partners gained from their own first-party data. In this way, brands can obtain white-labeled datasets that are designed specifically for their use.

Barriers to Measurement and Attribution Impact Growth and Expansion

Despite some successful strategies with first-party data, the standardization crisis is particularly acute in measurement and attribution.

In the Commerce Brand Media Summit Insights study, 50% of advertisers reported limited measurement capabilities as one of their biggest internal challenges to fully leverage their data. The only other challenge that was greater than this was "fragmented data silos or integration challenges,” which 53% said they struggle with.

This is a global challenge. According to Retail Media World, IAB Europe’s Attitudes to Retail Media Report 2025 revealed that 78% of brands and agencies identify measurement as the area most requiring standardization.

This challenge has become significant enough to steer marketing budgets. More than one-third of advertisers have questioned their retail media investments due to measurement and attribution difficulties, MarketingDive found.

Economic Impact and Hitting a Growth "Ceiling”

The fragmentation and standardization crisis is beginning to impact the economic trajectory of commerce media. While the sector continues to grow, growth rates are slowing significantly.

According to the Interactive Advertising Bureau’s (IAB) 2025 Outlook Report, projections show commerce media growth declining from 25.1% in 2024 to 15.6% in 2025.

Industry observers note that the market is "starting to plateau.”

"Retail media is still going to grow, but it’s reaching a point of plateau. It has started to saturate,” said a speaker at the 2025 Commerce Media Brand Summit. "We are very close to the point where we’ll be hitting the ceiling, at least in terms of absolute spend.”

Consolidation Pressure

The complexity and costs associated with managing multiple networks are also driving industry consolidation. Smaller networks are struggling to compete for advertisers’ attention and their marketing budgets.

This is leading to predictions that the "tail end will get washed off in the next few years,” as one speaker at the summit put it.

The Industry Responds with Standardization Efforts

Recognizing the severity of the crisis, industry organizations have begun developing standardization frameworks. There are a few examples of these initiatives.

IAB & MRC Standards

In January 2025, the IAB and Media Rating Council (MRC) released Store Retail Media: Definitions and Measurement Standards, a set of retail media measurement standards that could significantly improve the standardization challenge.

The challenge now is for there to be widespread adoption of these, or even other standards, across the industry. Currently, adoption of these standards is uneven, as there are other organizations and consortia working on similar projects.

Retail Media Federations

Some companies are forming alliances to aggregate smaller networks and provide standardized interfaces. For example, one organization created millions of shopper profiles by creating a consortium of regional grocers.

Third-Party & Independent Measurement Solutions

However, standardization must be impartial and deliver value to both retailers and advertisers. One advertiser at the 2025 Commerce Media Brand Summit said they wanted to see all the parties involved "gather all our data in one place, so everything can be measured consistently and fairly,” as this would allow them to "evaluate our retailer partnerships objectively.”

Honestly, we need better data to help us decide when to cut back our investments,” they went on to say. "For example, if someone pushes us to do social ads but can't show any results or clear measurement, it's important to give our sales teams permission to say, 'no’ to that."

Companies are developing independent measurement platforms to help brands compare performance across networks. Although these solutions require significant investment and technical expertise, they could result in a more balanced framework.

Industry Collaboration Provides a Path Forward

Without significant progress toward standardization, the industry risks losing advertiser confidence and investment. As one industry executive noted, "We can't move forward without standardization and measurement. Until we have this, we are just dealing with conjecture.”

Resolving these challenges will likely require collaborative effort from all industry stakeholders, including brands, retailers, technology providers, and industry organizations. Together, they can develop standards of measurement that support innovation while enabling effective communication across platforms.