How to Address the Problems in Retail Media Measurement | Industry Insights | All MKC Content | ANA

Retail Media Measurement: Addressing the Problems


Retail media has gone stratospheric. In 2023, it was the fastest-growing channel, according to data from WARC, and it has been achieving double-digit growth every year since 2014. It's forecast to push on in 2024, with projections that it will reach a total of $141.7 billion – that's 13.6 percent of all ad spend.

But while its growth is impressive, there are questions over whether the sector is fulfilling its potential. One of the chief criticisms of retail media networks (RMNs) is that a lack of standardization – particularly around measurement – is sapping marketers' confidence in the channel. Going forward, this needs to be addressed.

As we head further into 2024, here's how retail media can get to grips with its measurement problems and go on to even bigger and better things.

Not All Retail Media Networks Are Created Equal

In the post-cookie age, RMNs greatly appeal to advertisers who want access to authenticated, addressable audiences, reaching both existing and potential customers. And while there's no doubt that some advertisers are achieving great results through retail media networks, it's clear that not all RMNs are created equal.

Marketers currently looking at retail media and considering how to allocate their budget face walled gardens at every turn. Like-for-like comparisons rely on standardized metrics – of which there are currently none – so gauging how effective their campaigns have been mired in difficulty. Knowing where they will get the best ROI is largely impossible, as each RMN owner does things differently.

Metrics Matter

Guidelines around aspects such as viewability, attribution, audience segmentation, data processing, and transparency are on the way, with the IAB and Media Rating Council (MRC) developing standards to smooth out inconsistencies across RMNs. For retail media to reach its full potential, it's vital that all stakeholders agree on which metrics actually provide value to advertisers looking to prove ROI.

Incrementality is one of the metrics I would identify as key to RMN measurement. This metric allows marketers to see how a retail media campaign is performing, by directly comparing exposure to outcomes and calculating the resultant performance lift.

Incrementality doesn't rely on complex algorithms like methods such as multi-touch attribution (MTA) and is easily understood by C-suite executives as a proof point. But if marketers can't access the right data to make these calculations – or must wait weeks to see the data – then this powerful evidence of improved business outcomes is lost to them. Indeed, the inability to prove incrementality was cited as one of the chief obstacles to retail media's further growth in a recent report from Skai and BWG strategy.

Drawing on Third-Party Measurement Expertise

With the data collaborations that underpin retail media becoming increasingly complex as more parties are involved – retailers, media networks, identity providers, and brands – so do the measurement challenges.

Even when standardized measurement comes to retail media, marketers who really want to get the best from this channel need to tap into specialist expertise. If a brand wants to understand which RMNs are working best for them – and see how its retail media investments are performing relative to the many other ad channels it utilizes – then there's a strong argument for engaging with third-party measurement providers to carry out this deep data analysis for them.

Privacy-First Measurement

The deprecation of third-party digital IDs and increasing regulatory and consumer focus on data privacy has led to other measurement challenges too. Making first-party datasets accessible to measurement providers requires the use of technologies that guarantee customer data is fully protected without stripping the data of meaning.

That's why any standards developed around retail media measurement must cover privacy-first multi-party data collaborations. The use of Privacy Enhancing Technologies (PETs) such as Secure Multi-Party Computation (SMPC) – which permits multiple parties to run analysis on their combined data without revealing the contents of the data to each other – should be mandated to ensure there's no risk of data misuse or leakage.

Takeaway: Retail Media Must Embrace Standardization

At its core, retail media offers advertisers the potential to drive the desired outcomes. However, only standardization across the sector will give them transparency into campaign performance and the ability to prove ROI. RMNs must embrace this standardization and be prepared to take a more open approach. And as the walls are torn down, we must ensure that data privacy isn't compromised.

With a concerted effort, 2024 can be the year that retail media solves its measurement woes.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Lauren Wetzel is COO at InfoSum.