It’s widely accepted that last-click attribution is flawed. While publicly it’s much derided, however, privately it shows no sign of going anywhere. Unfortunately, retail media and commerce media have their own version of last-click addiction: add-to-cart (ATC) rates.
And just like last-click attribution, it’s a metric not fit for consumption. It also highlights the real need for standardization as the retail media space grows.
It’s easy to see why ATC is so prevalent. On the surface, it could be considered purchase intent. And consumers say they often use the online cart as a list for when they’re ready to shop. You could even argue that nudging the consumer to engage with the cart equates to shopping, and there is real value in that. But this is engagement or, at best, consideration – not conversion.
Moreover, in our quest to drive up ATC rates, we’ve removed friction from the add-to-cart process, making it seamless for a consumer to add products to carts with very little commitment or intent. In many cases, this add-to-cart action is merely a successful landing-page arrival. More often than not, add-to-cart providers are driving traffic to product description pages without securing a carted product.
ATC rates might be better than nothing, but the metric fails to show the full story.
Conversion complexity
There’s a combination of factors that ultimately drive conversion: the mindset of the consumer, their place in the purchasing journey and all the media they have encountered.
There’s also a real lack of data on how many carts actually convert, especially when it comes to consumer conversions from shoppable display ads in the CPG space. In our own tests with Kroger, conversion rates are well below 50% for ads within recipes. The figure may be much lower in noncontextual ads.
Moreover, with ATC, there’s zero visibility into the consumer behind the action. Imagine a consumer gets exposed to multiple ads for Tyson chicken. Maybe they click on every single one of those ads and add the product to their Walmart cart – but what if they were already going to buy that product? Not every ATC is created equal.
While retailers have the data to confirm conversion from media-driven add-to-carts, they’re not rushing to solve this – perhaps because they benefit greatly from the carting traffic. Despite the questionable validity of ATC rates, some agencies are putting a lot of weight on these metrics.
Add to cart is a useful feature and should be included in the overall mix of tactics, but brands should forgo it as a primary success metric. Instead, they should focus on more impactful measures that drive revenue, such as sales lift, incremental return on ad spend (iROAS), household penetration, buy rate and units moved. Understanding lifetime value is also a far more impactful way to measure success.
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The call for standardization
While there are myriad reasons why ATC is a flawed metric, finding a suitable replacement that’s consistent across partners and tactics requires retail media networks, commerce media vendors and the IAB to collectively find some common ground.
Without standards in place, brands and agencies will continue to measure campaigns differently. ATC will remain the default metric. Until standardization happens, we should be looking at the incremental shoppers reached or products sold.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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