Retail media is projected to grow 20% year-over-year in 2023, second only to connected TV among key ad segments. New retail media networks are launching all the time as advertisers shift toward more privacy-forward media solutions built on robust first-party data sets to counteract the demise of third-party cookies.
For the number of retail media networks that exist, there is nearly an equal number of approaches to activating media channels via various platforms, measuring performance, monitoring viewability, measuring ad fraud and ensuring brand safety.
While traditional digital media has matured, retail media is still in its infancy. This means each retail media network operates slightly differently, causing complexity across the industry. With ever-growing pressure on marketing resources, the retail media network sector cannot put the onus on clients to hire more staff to manage this complexity. Instead, marketers must work together to standardize across key areas.
Let’s look at measurement and methodology transparency as one area where standardization would benefit the industry. Generally, retailers provide some type of closed-loop sales metric attributed to digital media, but these methodologies are as unique as the brands themselves.
Determining methodology
As retailers launch their networks and build out their methodologies, they must consider the following questions:
- Do you tie online sales to your media performance, or should you also add the complexity of in-store sales?
- Do you measure channels separately, or should you use some form of multi-touch attribution?
- What attribution window do you use?
- Do you extrapolate based on the match rates of our customers? What about cash transactions?
- For incrementality, what methodology do you use?
Each of these questions is crucial for a retail media network setting up its overarching measurement strategy, but these decisions are often made in a vacuum and are limited based on the retailer’s technical capabilities.
Additionally, the industry is notoriously opaque about how different methodologies are calculated. Each methodology is “proprietary” and, depending on the partner, the way return on advertising spend (ROAS) or incremental ROAS (iROAS) is calculated can be convoluted at best, or worse—a complete black box.
Measuring performance
The issue then becomes how difficult it is for advertisers to determine performance across retail media networks. More sophisticated companies have created internal models or work with agency partners that ingest data to produce their own standardization. However, these models are often hampered by the respective retail media network’s ability to provide consistent, granular data quickly. Additionally, as self-service options in the industry are finite, the ability to act on these measurement solutions can also be limited.
Albertsons Media Collective is committed to transparency. That’s why the company is sharing its measurement methodology to encourage collaboration with other retail media networks to standardize across key areas. By clearly showcasing how ROAS and iROAS are calculated, Albertsons Media Collective seeks to provide a much-needed point of comparison within the industry as well as the opportunity to validate the methodology against other third-party measurements or internal systems.
Starting with measurement transparency and its iROAS methodology, Albertsons Media Collective hopes other retail media networks will be encouraged to follow suit. In 2023, hopefully there will be increased standardization across retail media networks, even beyond measurement methodologies.
This new media channel is complex, but standardization is possible and critical to simplifying the media buying process.
