Budget Reallocation from Traditional Media to Commerce Media for Advertising

The success of commerce media advertising is driving a significant shift in how brands spend their advertising dollars. Although other platforms often receive the lion’s share of advertising budgets, brands across all industries are strategically moving investments from traditional advertising channels to commerce media platforms.

In the past, platforms like retail media networks weren’t considered a top priority. But the industry has matured significantly, driven by the promise of better measurement, first-party data access, and closed-loop attribution.

This article explores how brands are winning the budgets they need to effectively leverage commerce media. It also reveals industry data and quotes from leaders who spoke at the Commerce Media Brand Summit (CMBS) 2025.

The Scale of Budget Migration

The numbers tell a compelling story. According to one study, brands are now allocating substantial portions of their advertising budgets to commerce media.

Beauty and personal care brands lead with an average of 22.7% of total ad spend going to retail media. The spend ranges from 18-27% across different markets.

In the US, this figure reaches as high as 27%.

The data also reveals that 70% of retail media spend is being diverted from other advertising budgets, including traditional media channels and social media. However, only 30% comes from trade retail budgets.

Key Statistics Supporting the Shift

Several compelling statistics demonstrate the magnitude of this budget reallocation:

• 25% of paid social and search budgets are now being allocated to drive traffic to retail partners (Forbes)
• 74% of marketers want retail media networks to play a bigger role in their overall media strategies (McKinsey & Company)
• 65% of marketers plan to increase their retail media investment over the next 12 months (Nielsen)

Why Brands Are Shifting Their Budgets Strategies to Commerce Media

The migration from traditional media to commerce media is driven by several compelling business factors. At CMBS 2025, leaders from brands, advertisers, and networks discussed these factors and what they could mean for the future of commerce media advertising.

Improvement to Measurement & Attribution

Superior measurement capabilities emerge as a primary driver. As one global e-commerce leader from a major home care company explained:

"Commerce Media is a commercial lever. The commercial lever might yield benefits today, or if it's a longer-term, brand-building kind of initiative, then it's going to deliver returns over a year or more.”

The ability to track customers from ad exposure to purchase provides accountability that traditional media channels struggle to match. When advertisers can compare internal data to the data collected by retail media networks, they can more effectively measure how customers arrived at their purchasing decisions and from which channels they originated.

Leveraging First-Party Data

As such, first-party data access represents another important advantage.

According to First-Party Data Strategies in Commerce Media: An Industry Analysis, a 2025 report by CMBS Insights, 28% of brands believed first-party data would be "very important” to their advertising efforts over the next 12 months, while 39% considered it "somewhat important.” Although some organizations are still searching for ways to leverage first-party data for commerce media advertising, others are already using it to improve efforts like attribution and customer identification.

Commerce media platforms also sit upon a wealth of their own first-party data, which they can leverage as a product. They can provide advertisers with direct access to data relating to purchase behavior, shopping patterns, and more, which traditional advertising channels cannot offer.

This data becomes increasingly valuable as third-party cookies disappear from the digital landscape.

Closer Proximity to the Point of Sale

Proximity to purchase makes commerce media particularly attractive. Unlike traditional brand advertising that creates awareness far from the point of sale, commerce media reaches consumers when they are actively shopping or considering purchases.

This direct connection to the purchase moment allows brands to influence decisions at the most critical stage of the customer journey, when consumers are already in a buying mindset and evaluating their options. The ability to deliver personalized messaging based on real-time shopping behaviors and transaction data creates a more relevant and actionable advertising experience that can drive immediate conversions.

How Advertisers Secure Internal Budget

Obtaining a budget for commerce media requires strategic internal positioning and clear value demonstration. At CMBS 2025, industry leaders shared several proven approaches for securing investment.

Data-Driven Business Cases

Business cases prove essential for budget justification. As one retail media leader emphasized, if advertisers can’t provide data on the effectiveness of a strategy, the budget won’t be allocated. This approach requires collecting and presenting clean, actionable data that demonstrates clear ROI and incrementality.

Framework-Based Allocation

Framework-based allocation helps brands make systematic investment decisions. One marketer described their approach as collaborative and systematic:

"We have a method to determine our primary and secondary approaches to advertising,” they said. "We put all our data and ideas together on a board to create frameworks for each.”

If one of the speaker’s brands wants to invest in a retailer, that retailer must meet a list of qualifications before it spends "even one dollar,” they continued.

"Those are the kinds of frameworks that can help your organization decide whether it’s worth it, not just from an investment point of view, but also from the buyer’s perspective.”

This structured methodology helps justify spending decisions to finance teams.

Cross-Functional Alignment

The topic of cross-functional alignment is crucial for obtaining an approved budget, as the rest of the organization must benefit from the investment. Successful brands integrate their commerce media teams with broader marketing and sales organizations rather than operating in silos.

One speaker at CMBS 2025 described this process as "setting up the right media objectives, tied to your cross-functional business objectives.” While this is a "challenging problem,” the leader stressed that it’s "a co-op team that is helping us to get there.”

This alignment helps secure buy-in from multiple stakeholders who control different budget pools.

The Importance of Measurement for Budget Justification

Measurement serves as the foundation for both securing initial investment and maintaining ongoing budget allocation. Leaders at CMBS 2025 revealed sophisticated approaches to proving value.

Measuring Incrementality

Incrementality measurement goes beyond simple attribution to demonstrate true additional value. As one expert from CMBS 2025 noted, "You have to strip out organic sales” to prevent over-inflated ROI claims that could undermine long-term budget sustainability.

Multi-Platform Attribution

Multi-platform attribution becomes essential as brands diversify across multiple commerce media networks. Industry leaders emphasized the need for "standardization across all their different retailers" and understanding "halo effects" across platforms.

Real-Time Optimization

Optimizing campaigns in real time lends itself directly to continuous improvement and budget efficiency. Brands are demanding access to real-time data to make immediate campaign adjustments rather than waiting for monthly or quarterly reports.

Measuring Success and Proving Value

Finally, speakers at CMBS 2025 revealed several approaches that successful brands use to measure and justify their commerce media investments:

• Marginal ROI Analysis: helps determine optimal spending levels across channels. Advanced brands use sophisticated modeling to understand "the point of diminishing returns at any point in time" across different media investments.
• Full-Funnel Measurement: captures both short-term sales impact and longer-term brand-building effects. This approach helps justify commerce media as more than just a performance channel.
• Business Integration: connects commerce media performance to broader business objectives like market share growth, customer acquisition, and lifetime value optimization.

Those organizations that master the art of securing internal budget through data-driven business cases and sophisticated measurement will be best positioned to capitalize on this growing opportunity.

Making the Strategic Shift to Commerce Media

The strategic reallocation from traditional media to commerce media represents more than a tactic. It reflects a fundamental change in how brands approach advertising accountability and effectiveness.

Success requires not just moving money from one bucket to another. Brands must build new capabilities, establish cross-functional partnerships, and implement measurement systems that can demonstrate clear business value.