Rethinking Retail Media Measurement: the Need for Transparency, Incrementality & Independence
02/03/2025
A special thanks to Kimeko McCoy from Digiday for her article about retail media measurement challenges facing the industry today. It was a nice opportunity to share OptiMine’s perspective on the state of retail media measurement. She calls out the increased scrutiny of retail media networks (RMNs) due to a lack of transparency and measurement that misses the mark on incrementality.
OptiMine agrees that the RMN measurement landscape can be improved dramatically and needs to in order to serve brands that are under increasing pressure to prove the value and impacts of their marketing investments. Given the fact that RMNs have grown so quickly, this pressure from brands (and on brand marketers) is real.
The Digiday article shows what we’ve seen in OptiMine’s own work with brands. With that in mind, here’s a quick take on how we see the current state of retail media measurement, along with some of the coaching we provide brands to get more from their RMN investments.
Incrementality
A common refrain from the brands we work with is, “If the RMN is telling us how awesome our advertising is performing, why can’t we see this in our sales results?”. Skepticism ensues.
The truth is that most retail media networks do not provide measures of the advertising’s incremental impacts. Unfortunately, many of the answers are grossly over-attributed using simple and dated measurement schemes and sophisticated brands are right to be very skeptical of them. Consider the fact that many RMNs still provide click or tracking-based measures. A recent study by the University of Northwestern shows that click-based and simplistic attribution measurement has error rates of 500% or more.
Sometimes, the RMN can be very opaque about their measurement methodologies and this drives further cynicism. There is pressure within the RMN to put the most favorable “answer” forward because this will yield higher advertising revenue, but this does a great disservice to the brand because it won’t actually help them perform better. The industry must step up and collectively demand RMN performance measures that fully account for incrementality. Incrementality-focused measures provide a more accurate view of what the advertising is actually generating in sales lift. Defined another way, it is the amount that sales would drop if the advertising were stopped.
Forced Pay-to-Play but Optimization Potential Still Exists
Many brands feel that they must invest in an RMN in order to get their products on the shelf. And while this pay-to-play pressure is real, it doesn’t mean that brands should just throw in the towel and kiss their budget goodbye.
Even within a fixed budget commitment, the brand still has plenty of opportunity to optimize this fixed spend and drive better performance. The key to RMN optimization is measurement granularity. Most brands using MMM don’t get the granularity needed to precisely optimize their RMN investments. For example, measures of paid search performance in aggregate won’t provide any guidance to the brand about which campaigns, ad groups or products perform better or worse. But having detailed reads with deep granularity reveals all of the possible levers the brand can pull even if the net result is the same aggregate spend. OptiMine routinely sees 10-20% improvement potential within any given channel by examining all of the performance variance deep within each channel’s execution. This money is left on the table when using a traditional MMM solution.
Measurement Independence is Critical
Let’s address the elephant in the room: entities that sell advertising have a vested interest in showing favorable results from that advertising. This does not mean that all RMNs are bad actors nor does it mean that investments in RMNs don’t work. OptiMine has guided many of the largest brands in the world to successful investments in retail media.
But, brands need to move to independent measures of advertising performance to ensure the most accurate views of value and impact. And by doing so, a brand will also gain incredibly valuable cross-channel intelligence that evaluates advertising across its total impacts (not just within a particular retailer’s environment). Measurement independence is a key function of a mature, sophisticated measurement program and is critical for long-term marketing success.
Break Out of the Vacuum
Any given RMN measure will focus 100% of its value on sales within that specific retailer. This is a good start, but the fact remains that virtually all advertising has a broader effect. In other words, ads do not perform in a vacuum. So why would a brand rely on an answer that only lives inside of that vacuum?
OptiMine has consistently shown that cross-channel value exists for ads, regardless of the channel. Brand-building, awareness, and shopping behaviors are truly cross-channel in nature and consumer behaviors no longer live within nicely packaged channels and paths. A recent case study from an OptiMine client shows the power and influence of this cross-channel impact. In one case, the brand saw over 20% of the value of their investment in Amazon Ads result in sales outside of Amazon. Marketers under pressure from finance to prove value need measurement solutions that can capture the full funnel effects regardless of the channel or its role.
These topics and considerations are key to the future success of the RMN space. Brands can do better with their RMN investments with objective and independent solutions, and the RMNs themselves need to take steps to improve the measures they provide their advertisers. We can all do better.
Contact us today to learn how OptiMine can help your brand accurately measure your retail media!