The entire ad industry is obsessed with retail media right now. But the channel’s got a bit of a measurement problem. (Sound familiar?)
Retail media networks (RMNs) give brands that don’t have much first-party data a way to target their customers. But buyers can’t justify spending on RMNs without solid, cross-platform measurement in place. And RMNs are a land of walled gardens.
“Retail media is in serious need of measurement maturity,” said Keith Bryan, president of ads at Best Buy, speaking at the Advertising Research Foundation’s shopper summit in Chicago on Thursday. And plenty of headlines are calling out the fact that measurement might make retail media hit a growth ceiling.
But until the walled gardens agree to lower their fortifications, they can at least offer better closed-loop measurement within their own fiefdoms to help advertisers target new audiences.
Take it in increments
Although RMNs promise closed-loop measurement, without strong off-platform reporting, advertisers can’t tell whether an ad reached a new customer or someone who was already intending to purchase a particular product.
A better understanding of offsite campaign performance on channels like social media, retail search engines or connected TV (CTV) can help advertisers get a sense of whether their reach is incremental.
Advertisers need both on- and off-site data reporting to get a full view of the audiences they should be reaching, said April Carlisle, EVP of Spark Foundry. Agencies need to help clients merge those data sets so they can avoid duplicative buys and get in front of fresh eyes.
“Many of our clients are spending a lot of money advertising on retail media networks – especially on retail search channels,” Carlisle said, “but they’re still just hitting the same households.” As a result, many brands are focusing heavily on incrementality to make better targeting decisions.
All advertisers seek positive return on ad spend.
But what they really need is incremental return on ad spend (IROAS), said Ally Schnitzer, retail media lead at PepsiCo.
In addition to IROAS, another popular metric among advertisers is new-to-brand (NTB), a budget breakdown that determines how many sales came from first-time customers.
Channel your energy
In some cases, though, advertisers forgo running campaigns on certain platforms that don’t check the box on measurement and attribution reporting.
PepsiCo, for example, doesn’t typically advertise on Facebook, which is “unfortunate” because of the platform’s reach, Schnitzer said. “But if I can’t get detailed measurement reporting back, then every other dollar I spend has to work that much harder to compensate for what’s essentially an unmeasurable channel.”
But there’s another reason detailed reporting isn’t on offer. Facebook’s attribution was kneecapped by Apple’s AppTrackingTransparency framework.
CTV, meanwhile, isn’t reeling from signal loss – not yet, anyway.
Streaming is a natural extension of retail media, because it’s an effective channel for advertisers to get more reach, albeit further up the purchase funnel, Best Buy’s Bryan said, which ties into the promise of closed-loop measurement.
But more signal is only a step in the right direction, Bryan continued. “There’s still a lot of standardization that needs to happen in the retail media space.”
