Artificial intelligence (AI) is rapidly shrinking the digital advertising funnel, and travel brands are turning to commerce media to reclaim control.
Commerce media enables companies to monetize traffic by allowing brand advertisers to tap into their first-party customer data and serve up targeted advertising.
Online travel agencies (OTAs) were early adopters.
Tourism boards would partner with an OTA’s travel media network to promote their destinations, aiming to influence people to book a package in a particular market.
It has been described as a “win-win” for travel companies, offering better advertising margins and improved profitability. Recent advances in AI are taking it to another level, with airlines, hotels and even theme parks expected to expand usage this year.
“There are certainly opportunities for everyone in this space,” said Erik Brackmann, vice president, commerce media at Koddi.
Changing behavior
Traditional online marketing is waning because AI search and “zero-click” answers mean ads aren’t getting as much visibility as they used to.
Instead of browsing dozens of websites, travelers consolidate discovery into a single LLM interface. When that happens, they are exposed to fewer ads and retargeting sequences.
“That has real implications for commerce media,” said Nick Slavin, CEO and co-founder of demand creation platform Curacity. “If the open web becomes less fragmented from the user's perspective, blanket programmatic and broad paid social become less effective as awareness nets. Ad dollars will need to go to commerce-driven environments with high-intent audiences.”
McKinsey predicts commerce media networks will have a compound annual growth rate of 21% from 2023 to 2027, outpacing display, connected television and even search.
Brands can now leverage AI to promote the right offer at the right price—and at the right moment. It’s an example of the so-called “collapsed funnel” model, where discovery, decision and purchase take place within minutes.
“We see more than 20 million ad opportunities every second across the open internet, which gives us a broad, real-time view into signals that suggest when someone may be starting to think about a trip,” said Kelly Covato, general manager, business development, travel for The Trade Desk. “That perspective helps brands understand interest as it develops.”
Proof of concept
The undisputed heavyweight in commerce media is Uber, which has numerous travel partnerships. In October 2024 the company revealed its advertising network hit $1 billion in annual revenue. By February 2026, that number had doubled to $2 billion.
Curacity’s Slavin said the increase was no surprise. “Uber sits at the intersection of commerce and intent. They have logged-in users, real-time location data, transaction history and closed-loop attribution. For advertisers, that's a rare combination.”
Expedia is seeing steady gains too. It reported $145 million in revenue in the first quarter of 2024 for display advertising across its 200 sites, increasing to $208 million in the fourth quarter of 2025. Sister brand Trivago saw a similar growth rate.
As well as shaping new consumer behaviors, AI is becoming fully embedded in commerce media infrastructure.
In 2024, Brackmann told PhocusWire he was “excited” to see how the combination of generative AI and commerce media might play out. And now, 18 months later? “I was optimistic then, and a lot of what we were doing was exploratory. At this point it's practical,” he said.
Brackmann said generative AI is now embedded across the media lifecycle: from planning and creative through to measurement and reporting.
The Trade Desk’s Covato agrees. “AI is helping create more personalized ads. Programmatic [advertising] helps identify customers in seconds, and generative AI customizes that message further than in the past,” she said.
“In commerce media, the rise of retail media and the growing importance of first-party data created a foundation, and AI is what allows that data to be used more intelligently and efficiently. Ultimately, that continuous learning loop is what will shape the next phase of commerce media.”
Loyalty advantage
Brackmann also believes those travel brands with sophisticated loyalty schemes stand to benefit the most.
“I'm quite bullish about travel as a vertical within commerce media simply because the loyalty programs are so robust and so deep, and people have an emotional connection to brands that they grow with in a way that isn't necessarily true of every vertical,” he said.
As an example, Marriott started its own media network in 2022, but in June 2025 launched Marriott Media, leveraging first-party data across its 237 million-member Marriott Bonvoy program and lodging portfolio of 9,500 properties globally.
United Airlines is also betting on the future of commerce media. It launched its Kinective Media division in 2024 as a network that uses insights from travel behaviors to connect customers to personalized advertising, experiences and offers from different brands.
“There are some great examples across the travel spectrum,” said Covato. “Many of the cruise lines started to leverage airline data in travel media networks to deliver cruise bookings in key ports of call.”
She said one cruise line client saw significant improvement in its campaign effectiveness, including a 40%-70% decrease in cost-per-acquisition using Kinective Media audiences on The Trade Desk.
Room to grow
Commerce media has significant growth potential, but challenges remain.
The All Commerce Media Playbook by Forrester Consulting, commissioned by Koddi, warns “fragmented inventory” is holding back many companies in the travel sector.
In a survey of 112 travel and hospitality decision makers responsible for commerce media in the U.S., Canada, the U.K., France and Germany, nearly half (45%) reported disconnected inventory across on-site, in-app and in-transit environments, causing operational blind spots that hinder cross-channel optimization and audience reach.
“There is still significant room for growth in how commerce media is used across travel,” said Covato. “Many travel brands have access to rich customer and behavioral data but are only beginning to explore how that data can be activated beyond their own channels. We anticipate airlines, hotels and theme parks will lean further into using commerce data more in 2026.”