Commerce media has become the connective tissue of modern advertising — but retail media is still early in the journey from “new revenue line” to “true performance system.”

In this episode of The Middlemen Podcast, Scott Messer and Tom Limongello sit down with Conor McKenna (Partner, Luma Partners) for a banker’s-eye view of what’s actually happening beneath the retail media hype cycle — and what needs to change for the category to mature.

One of Conor’s most useful frames is the distinction between retail media as a channel and commerce media as a layer. Retail media introduces new surfaces for advertising, but commerce media is the broader layer that sits across channels — shaping how brands plan, measure, and optimize toward outcomes. If that sounds familiar, it’s because we’ve seen this movie before: mobile wasn’t just another channel, it became a layer across everything.

Conor argues that retail media is now settling into a trough of disillusionment — not because the opportunity is gone, but because the market is confronting the operational realities. Many retailers built teams and processes as if advertising would be transformational overnight, but for most, the path is more pragmatic: incremental profits, tighter execution, and an operating model that can scale. The work ahead is less about launching yet another network and more about building the foundations: standardization, aggregation, and real operational efficiency.

A key theme is the gap between sales-led media and performance media. Search inventory can’t behave like traditional ad sales. The systems that win long-term look more like Google, Amazon, and Meta: self-serve workflows, always-on optimization loops, and feedback-driven decisioning that continuously reallocates toward what works. Retail media still has meaningful distance to travel to get there — and that distance is where many of the most important product, platform, and services opportunities live.

The conversation also touches on why measurement is getting harder in a privacy-first world. As deterministic signals become scarcer, Conor points to a growing shift toward probabilistic approaches, with AI acting as the bridge — enabling smarter prediction and optimization, but only when it’s fed strong “seeds.” In commerce media, those seeds are increasingly transactional: the clearest, rarest signal that ties advertising exposure to business outcomes.

For prospective clients evaluating commerce and retail media strategies in 2026 and beyond, this episode is a grounded reminder that the next phase isn’t about more noise — it’s about better systems. The winners will be the teams that can unify data, simplify workflows, and build an optimization engine that makes outcomes predictable and repeatable.

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