Retail media is flourishing, with Insider Intelligence predicting it will become a $55 billion market with double-digit growth by 2024. This surge in investment reflects retail media's strategic importance for both brands and agencies. This growth can be attributed to the unique combination of two powerful elements: first-party data and closed-loop measurement (CLM).
At the heart of the retail media revolution lies first-party data — the treasure trove of consumer information collected directly from retailers' owned channels, such as websites, mobile apps and loyalty programs. Retailers possess a deep understanding of their customers' preferences, purchase history and shopping behaviors, enabling them to create highly targeted and personalized ad experiences.
"Traditional advertising has lost trust and impact," says Michael Schuh, vice president of media strategy and product at Kroger Precision Marketing. "Now, retailers are driving more relevant ad measurement across the entire media ecosystem. Retail media is equipping brands and publishers with sales data to make better media investment decisions."
By leveraging first-party data, retail media networks (RMNs) can bridge the gap between advertising and sales. Advertisers can now reach their desired audience with laser-like precision, tailoring their messages to resonate with specific segments based on demographics, purchase intent, and browsing behavior. This level of personalization not only enhances the customer experience but also maximizes the impact of advertising campaigns, driving higher engagement and conversion rates.
The Interactive Advertising Bureau (IAB) will be discussing all this and more at the IAB Connected Commerce Summit: Retail Reimagined on Sept. 13 in New York, including a session on "Creating Consensus Through Retail Media Standards." The session will join myself, Albertsons Media Collective's Claire Wyatt, Publicis Groupe's Jill Cruz, Media Rating Council's Ron Pinelli and the Path to Purchase Institute's Jessie Dowd.
The Power of Closed-Loop Measurement
Through closed-loop measurement, retail media networks can provide advertisers with a comprehensive view of the customer journey, from initial awareness to purchase and beyond. By tracking shopper behavior across multiple touch points, including website visits, email sign-ups, and online purchases, advertisers can understand which channels and campaigns are most effective at driving conversions. This valuable insight enables advertisers to tailor their marketing efforts, to personalize product recommendations, and to deliver more relevant and engaging content to their target audience.
The benefits of closed-loop measurement in retail media are clear. It offers advertisers accurate and actionable data to track the impact of their advertising efforts, optimize their strategies, and engage with consumers across various channels effectively. By leveraging first-party data, attribution models, and targeted ad formats, retail media networks can provide a complete view of the customer journey, helping advertisers make informed decisions to drive growth and profitability.
"Measurement is a common concern for our community of retailers, brands, agencies and solution providers," says Cyndi Loza, P2PI's managing editor, member content. "Through our various surveys, industry events, share groups and daily interactions, we consistently hear from our community on the challenges of working with various retailers, marketplaces and ad tech providers that each have their own, varying approaches and methodologies to measurement. From our vantage point, measurement standardization is imperative for the growth of retail media, especially as the sector grows increasingly crowded and new retailer media networks and partners pop up regularly."
Establishing Standardization through Cross-Industry Collaboration
However, with growth comes complexity, and a central concern has arisen regarding the lack of measurement standardization across RMNs. The wide array of retailer offerings and metrics currently present a challenge for accurately evaluating campaign performance and optimizing investment across RMNs. There's a recognized need for greater transparency into the quality of data provided by retailers and a standardized approach to evaluating campaign performance across different platforms.
“To ensure our industry continues to thrive, it's critical we come together on retail media standardization," says Kristi Argyilan, senior vice president of retail media for Albertsons Companies. "Our industry-wide collaborative efforts push to revolutionize how advertisers, agencies and retail media networks work together toward shared goals.”
To address these issues, IAB officially launched a Retail Media Network Committee in 2022 then the Retail Media Measurement Working Group in April 2023. This task force, developed in partnership with the Media Rating Council (MRC), convenes retail media networks, agencies, brands and select ad tech companies.
According to Jill Cruz, executive vice president, commerce strategy, Publicis Commerce, and co-chair of the IAB Retail Media Measurement Working Group, the cross collaboration that the working group has fostered across brands, agencies, and media partners is critical to the future growth of this industry. "Gathering to take a holistic view and approach to pressure test and formalize measurement standards and guidelines is important for every facet of campaign management – whether it’s planning, audience targeting, optimization, performance measurement and creative best practices," Cruz says. "This is also helping to minimize the burden that for too long has fallen on advertisers and agencies to navigate the complexities and fragmentation of retail media and it's also helping to expedite success across these maturing retail media platforms.”
To realize the full potential of retail media, the industry must emphasize the importance of measurement and deliver the peace of mind that advertisers seek. With the right measurement and attribution, advertisers will gain confidence in the value of investing in retail media, making it a key player in the evolving advertising landscape.
Releasing Guidelines for Public Comment
The working group will present their initial measurement framework for public comment at the upcoming IAB Connected Commerce Summit: Retail Reimagined on Sept. 13.
This flagship IAB event will bring together senior leaders from top brands, retailers, agencies, and ad tech companies to define the future of connected commerce. Attendees will help shape retail media measurement standardization through their feedback.
Join the IAB at Convene on West 46th Street in New York City for the IAB Connected Commerce Summit: Retail Reimagined as we work to drive consistency, fuel growth, and build trust in retail media through cross-industry collaboration and measurement guidance. Learn more and register at https://www.iab.com/events/2023-iab-connected-commerce-summit/.