Retail Media Measurement Innovation: A Win-Win Proposition
Retail media networks have enjoyed significant growth in recent years as brands have welcomed the ability to more effectively target consumers based on expressed interests and purchase behavior. However, advertisers’ demand will continue to exceed the limited supply of retailer-owned inventory, and retailers will see offsite media targeting these same audiences to drive their growth. Brands and their agencies should ensure their analytical models account for the performance of offsite channels in evaluating the effectiveness of the commerce media channel, especially in comparing it to the rest of their marketing investments.
Measurement Strategy
There are two primary questions to address the effectiveness of commerce media:
- How does offsite media compare to onsite media in driving incremental sales lift at this retailer and across the total market?
- How do offsite and onsite media compare to the rest of my marketing investments in driving incremental sales lift?
Most retail media platforms have a closed-loop ecosystem with first-party data linked to exposures and retailer conversions. Offsite retail media becomes more challenging for a similar closed loop view with its many more customer touchpoints and continued shift from cookies to persistent identifiers. A viable path forward is establishing clean rooms or data-secured enclaves where retailers and brands can share, collaborate and analyze customer conversion metrics against offsite media exposure without surfacing individual information that otherwise creates consumer privacy risk.
Keep in mind that closed-loop ecosystems and clean rooms/secure enclaves only permit "counting" the sales conversions within the retailer’s ecosystems. Brands and agencies must implement testing methodologies to arrive at a truly incremental sales/conversion metric. Testing could take the form of geo-based matched market tests based on establishing two store groups with similar and consistent characteristics. Even better, an audience-based randomized control trial (RCT) allows marketers to avoid going dark in a large geographic area, reduce the marketing investment at risk and enable shorter duration experiments. If it is not possible to build individual target audiences prior to running media, an alternative method would be to use a post-treatment synthetic control approach that creates test audiences based on media exposure prior to a test campaign. Only by applying a rigorous testing approach can commerce media fulfill its commitment to accountability, transparency and standardization.
Total Market Impact
The next critical step in measurement is to analyze the rest-of-market impact of both onsite and offsite retail media. Doing this requires linkage to a total market-based conversion panel with the likes of NCS, Numerator and/or Circana. Then both retailers and brands would be able to quantify the incremental sales impact of commerce media on conversions outside of their own retail channel. They can answer the question, "Did this campaign have a halo effect of driving total market sales?”
The final measurement question is how to strategically manage marketing investments across all media, including onsite and retail media. Many CPG brands currently deploy some version of a marketing mix modeling (MMM) capability to inform holistic and strategic marketing decisions on resource allocation and budget planning. Because marketing mix models are based on market-level, times series data, it can often become challenging to reconcile the ROI metrics with the audience-level metrics leveraging RCT techniques. Best-in-class marketers and analytics service providers are building next-gen methodologies to translate the output from different measurement approaches and integrate the results into a harmonized and single view of marketing return. Only then can brands and agencies make the most accurate and informed marketing investment tradeoff decisions.
Collaborate to win
Retailers can help brands and agencies answer these incrementality questions by making campaign and conversion data available in a framework that protects consumer privacy. This will benefit the retailers themselves in addition to the brands and agencies — a win-win scenario. Empowering brands to learn and optimize will enable them to standardize measurement across commerce media publishers and thereby justify increasing budgets. In turn, retailers will find themselves in a stronger position to go beyond shopper marketing and trade budgets and increase market share of total brand media budgets – making retail media networks more incremental for the retailers themselves.
Steve Kim is VP of global operations at TransUnion Marketing Solutions. He leads marketing analytics organizations that work with CPG, retail, financial services and healthcare clients.
Mark Rose is senior director, market strategy at TransUnion Marketing Solutions. He leads market strategy and business development for CPG, retail and travel/hospitality industries.