Brands are starting to use commerce media for upper-mid to upper funnel campaigns. But they’re utilizing the marketing channel in a different way than performance marketers do.

Commerce Media Offers Precise Audiences For Brand Awareness

It’s still early days for upper-funnel marketing in commerce media, but you’re already seeing brands take advantage of the precise audience data over the product-purchase data used for lower-funnel purposes. It’s not as much about what a person bought or what they’re searching for, but who they are and where they can be found.

Let’s say a car company has a new vehicle that’s great for first-time car buyers. The car brand could go to a retailer like Walmart to find the right audience to show off their new vehicle.

Walmart might already have audience segments based on purchase data. They know that young people that are interested in buying a car are searching for or buying specific products. The car brand is then able to advertise to this audience on Walmart’s site with ads intended to make the audience more familiar with their new vehicle. In this example, the car manufacturer is what’s known as a non-endemic advertiser; they do not sell their cars on Walmart’s website or in their stores but they can tap into audiences that index highly against their target market.

Upper-Funnel Campaigns Outperform Conversion-Focused Ones In ROAS

A recent report from McKinsey suggests that upper-funnel retail media ads actually perform better than their lower-funnel counterparts. Display ads had a 45% ROAS while video ads managed 43%. When you compare those numbers to the 25% ROAS for sponsored product placements, it really shows the potential for upper-funnel marketing strategies in commerce media.

There’s also the added benefit of upper funnel ads appearing close to the point of purchase. They have the potential to drive conversions despite being intended as brand-building exercises.

A large part in unlocking these upper-funnel branding opportunities on retail media networks will be the availability of rich media, creative-led ad formats such as display or video that can show off the brand. This may occur in a limited way on the retailer’s website but will have more room to grow offsite.