It's Time to Get Real About Retail Media Measurement
Retail Media is one of the fastest-growing advertising channels worldwide. While the death of the third-party cookie is delayed, its demise is imminent and retail media will only grow stronger as advertisers continue to realize its effectiveness as a tool to reach shoppers across their path to purchase.
But the meteoric rise in retail media hasn’t come without hiccups. With more than 200 retail media networks (RMNs) in the U.S. alone and new ones appearing weekly, there are numerous differences in offerings and capabilities between retailers’ networks. There has been a considerable effort over the past year, valiantly led by the IAB and major U.S. retail media players like the Albertsons Media Collective, to bring calm to the chaos and introduce a set of standards in measurement that provide clarity to brand advertisers.
At Threefold, we believe standardization is great, and we were happy to contribute to the IAB’s final guidelines, released earlier this year. Our experts presently operate five active RMNs for major retailers, so we know all too well the headaches that can arise from a different set of standards, capabilities and definitions across the retail media landscape. We work with 95 of the top 100 global CPG brands and constantly strive to provide streamlined experiences and the data brands need to make informed retail media decisions.
While these measurement standards are a North Star the industry should strive toward, the reality is they’re just guidelines and their implementation is another challenge entirely.
Brands need clarity on their retail media spend now. That’s why there’s something even more important than standards that RMNs can offer immediately: true transparency. When retailers treat brands as clients and are transparent about what has — and just as importantly has not — worked, brands and retailers improve their working relationship and can make better-informed media decisions that increase profits on both sides of the equation.
Retail media is not just ad sales; it’s a collaborative relationship between a retailer and brand, planned precisely with data and creative ideation at the core, fostering a better and more complete shopping experience for the consumer. At Threefold, we’re now working with retailers in the U.S. and Canada, but we’ve spent more than 15 years building RMNs in Europe, where there’s long been a clear focus on transparency, in part a result of the General Data Protection Regulation (GDPR). Our experience tells us that transparency makes a retailer’s RMN proposition stronger and is something to be celebrated, not feared.
Furthermore, the standardization conversation has largely focused on digital retail media, but retail media is not a purely digital enterprise. For the majority of retailers, brick-and-mortar store footprints represent their greatest (often still untapped) retail media asset, as brick-and-mortar retail sales will account for $4 of $5 spent at retail by 2026, according to Emarketer. Approaching measurement in-store is quite simple when approached transparently. Proving incrementality to advertisers can be achieved using a test versus control methodology that measures SKU sales where a campaign was active compared to sales in a similar store without the media. The results speak for themselves; brand advertisers have seen, on average, a 30% sales uplift in stores where retail media is active, according to data from Plan-Apps, Threefold’s proprietary Retail Media Operating System that underpins all of our partner RMNs.
There are also ways to make digital retail media performance more transparent. Threefold-powered RMNs provide metrics such as pre versus live sales comparison, sales attribution modeling and regression/random forest modeling, to communicate results.
The point is, retailers aren’t all alike, brands aren’t all alike, and no retail media campaign is exactly the same. While achieving standards is paramount, retailers and brands must also be agile, collaborative and clear from the outset on what KPIs are going to be needed to evaluate campaign performance. That can happen today.
There are three core questions that retailers, using data, must answer for brands:
- Did consumers see the campaign?
- Did consumers engage with the media?
- Did consumers purchase the product?
When retailers are more transparent about sharing this data, retailers and their RMNs drive top-line growth, both physical sales and ad dollar sales, because brands and retailers can focus on winning strategies. It’s pointless to push further advertising spend if data shows it’s not driving sales. As the RMN space becomes more crowded, brands will only invest with retailers that are transparent and offer the tools to create winning campaigns.
Furthermore, as retail media continues to mature, we will see a shift in what metrics brands use to evaluate the success of their retail media. In the future, there will likely be a decline in focus on short-term KPIs, like ROI, in favor of more comprehensive metrics, like customer lifetime value (CLV), which offer a big-picture analysis of the power and potential of retail media beyond the short-term.
Retail media is not a one-size-fits-all solution. Best Buy isn’t the same as Kroger, which is different from The Home Depot; but all three RMNs offer unique and valuable retail media propositions for brands. While the entire industry should strive to meet measurement standards, not every retailer needs to offer the same exact proposition.
Most importantly, retailers must be transparent with brands about the success of their campaigns, agree on goals and KPIs ahead of time and honestly and accurately communicate those results in a way that enables brands to make decisions that drive sales.
It’s time to get real about retail media measurement.
About the Author
Sean Crawford is the managing director of Threefold and the driving force and face behind Threefold’s North American expansion, which began in 2023 and has already seen the agency sign multiple major U.S. clients. In 2023, Crawford was awarded the 40 Under 40 award from the Path to Purchase Institute, which honors the next generation of leaders in omnichannel marketing. Over the past decade, Crawford has presented at numerous U.K. and North American industry events and has contributed to industry publications to share his insights and experience on the evolving retail media landscape.