The Need for Measurement Standardization
Albertsons Media Collective, the retail media arm for Albertsons Cos., this summer shared a preliminary framework to standardize specifications, methodologies, terminology and disclosures across retailer media networks (RMNs). The initial version of the framework focuses on four areas: product characteristics, performance measurement, third-party verification and capabilities. The framework will be finalized after pressure-testing industry-wide priorities, according to Albertsons, and ensuring executional feasibility.
Guided by an advisory group, the framework will also expand and evolve further to support key initiatives by the Interactive Advertising Bureau (IAB). The Path to Purchase Institute recently chatted with Evan Hovorka, vice president of product and innovation for Albertsons Media Collective, to discuss the need for measurement standardization and how AI is going to be a key unlock for retail media.
P2PI: Can you tell me a bit about your time at Albertsons. I understand you joined Albertsons in 2021 after a 17-year stretch with Target.
Hovorka: Since joining Albertsons Media Collective in 2021, I have been hyper-focused on building out our retail media network and driving forward innovations that inspire our partners to go beyond traditional media. The Collective’s collaborative culture has fostered the perfect atmosphere for co-creating new ideas — both internally and alongside industry leaders like Kargo — that solve marketers’ most pressing problems. This has empowered us to innovate quickly across the tech stack through product updates and unique ad experiences, putting us in pole position to build the next era of retail media.
P2PI: 2021 was also the year Albertsons launched its RMN in-house. Can you share a bit about Albertsons' retail media journey?
Hovorka: While retail media is still in its infancy stage today, our late-mover advantage enabled us to bypass many of the early growing pains retail media networks experienced and incorporate cutting-edge technology into our network that specifically addressed advertisers’ pain points. Our technology stack was built by a team of innovators with deep-rooted retail media and marketing technology experience, so we were able to move quickly and provide advertisers with a trusted platform that connects inventory with deep insights and delivers an enriching customer experience. Our focus not only has been on making strategic investments in our technology, but also cultivating direct partner relationships. Within just six months of launching, we delivered audience and measurement autonomy with The Trade Desk and integrated with platforms like Pinterest to explore new ways to leverage data in privacy-compliant ways.
P2PI: Considering the rise of e-commerce grocery adoption, fueled by the pandemic, and Google's plan to end third-party cookie tracking, is retail media just table stakes now for brand marketers?
Hovorka: Brand marketers today are under immense pressure to justify their advertising spend, all while operating on smaller marketing budgets due to the economic environment. This heightened focus on driving performance and proving return on ad spend, combined with access to valuable first-party shopping data, has made retail media an attractive option for advertisers. It’s especially enticing for companies that don’t traditionally have much access to first-party data, like CPG brands. By delivering ads at the right time and close to the point of purchase, brands can also improve their customer experience by offering promotions to help ease the burden of inflation on consumers.
P2PI: The biggest challenges we hear from brands are data sharing and transparency, measurement standardization and managing so many networks. Any advice for brands?
Hovorka: Brands should demand a standardization framework be put in place to foster better collaboration and efficiency across retail media. Standardization wouldn’t just be a win for brand advertisers and agencies. RMNs have skin in the game, too, and should help pave the way for standardization to ensure the channel’s growth for years to come. RMNs are wasting engineering calories by trying to build end-to-end channel solutions when many of the product features are not, and should not, be differentiators. Adopting common patterns for basic features would make everyone’s lives better.
P2PI: You say measurement standardization is imperative for the growth of retail media, especially as the sector grows increasingly crowded. Can you expand on this?
Hovorka: While the number of RMNs has grown at an impressive rate over the past year, the absence of industry-wide standardization poses significant challenges for advertisers, agencies and RMNs themselves. Without standards to follow, each RMN has its own ad formats and measurement protocols, essentially operating as their own walled gardens. Because of this lack of transparency, advertisers do not have the resources to transact across many RMNs at once. The result is an unnecessarily inefficient, costly and frustrating ecosystem for ad buyers. Without overcoming these challenges, RMNs put their future success at risk.
P2PI: How does Albertsons Media Collective define incrementality?
Hovorka: Incrementality is a measurement tool that calculates incremental outcomes of ad campaigns. It can be used to measure everything from conversions and sales to brand awareness. That said, not all methodologies are created equal. There is still an opportunity to muddy the numbers, especially when using synthetic hold out groups where ads are shown to the entire audience segment. At Albertsons Media Collective, we use a pre-campaign audience hold out. Before a campaign begins, the entire audience segment is randomized into test and control groups. An ad is then shown to the test group while being withheld from the control group. Having this audience control group at the start of a campaign helps to eliminate biases, providing advertisers with data-informed insights to optimize their next ad campaigns.
P2PI: How can incrementality solve retail media’s measurement problem?
Hovorka: Incrementality adds an extra layer of transparency to measurement and reporting by providing insight into sales, as well as how much of a sale can be attributed to an ad. This is especially important for advertisers who already have a large customer base of loyal customers. This level of granularity ensures retail media networks only take credit for the incremental part of sales, and not the loyalty the brand has already established with that customer.
P2PI: What role does AI play in helping marketers fully embrace retail media?
Hovorka: AI is going to be a key unlock for retail media, specifically for media buying, creative generation and audience creation. However, what many forget about AI is that it’s only as powerful as the data it sits on top of. This makes it especially powerful for retail media, but also a potential trap door. Many RMNs are built on top of unstable data foundations, and as AI only utilizes the data it has available to it, a poor data set will lead to poor results.