From Fragmentation to Sophistication: The Need for Neutral Measurement in Retail Media

It’s not just you — advertising is getting more personal. Retailers and brands know more about consumers than ever, thanks to their first-party data, and retail media networks (RMNs) can deliver personalized advertising by leveraging it. Beyond its role in targeting consumers, this transactional data can also serve as a powerful attribution method, closing the loop on advertising.

However, the siloed nature of major RMNs poses a risk to this positive feedback loop. A consumer’s journey rarely begins and ends within just one retailer; it often includes touches on numerous other advertising channels. With retailers understandably anxious about data leakage and privacy, these effectively operate as independent silos or walled gardens, making it difficult for marketers to piece together a picture of the overall customer journey and develop coordinated media plans. Marketers who can overcome today’s fragmented retail media landscape will be able to develop more effective strategies.

Retail Media’s Fragmented Landscape

At its core, the evolution of RMNs is a massive net positive for the industry: the utilization of first-party data ultimately means better, more targeted advertisements based on information collected directly from consumers. Compared to soon-to-be-deprecated third-party cookies, this is a far more sustainable data source for targeting across the advertising ecosystem.

On the measurement side, however, cracks are showing. While RMNs promised and have delivered closed-loop attribution, differences in measurement standards across them have created a fragmented array of performance metrics, which while sharing the same name — return on ad spend (ROAS) — are far from being measured the same way. Though governing organizations such as the IAB have taken the first pass at measurement standardization, the industry at large has yet to adopt these at scale. For brands, being unable to draw connections across retailers runs the risk of audience exhaustion as the most likely consumers are bombarded with the same advertising, across their online and offline experience.

There are also concerns of bias or conflicts of interest given this measurement is being provided by platforms that have a vested interest in selling more of that very same advertising. This combination has led to a host of challenges that pose a risk to the continued growth of retail media. For retail media to overcome these challenges, standardized neutral measurement is essential.

Unifying the Disparity

Two elements are needed to overcome these challenges in retail media. A consistent measurement methodology is applied across RMNs and that measurement is to come from a source that doesn't have a conflict of interest (i.e., it has a vested interest in growing your business, not selling you more media).

These challenges aren't new. Brands have already voted on this before. In virtually every new media type, the first movers on measurement have been publishers or the execution platforms. What has resulted is a fragmented measurement landscape, with each grading their own homework. DSPs were the first to attempt unified measurement of digital, but ultimately lost out to a wave of MTA platforms. A similar story played out in CTV with players like Samba ultimately divesting their media execution to become neutral measurement providers.

A similar pattern will play out in retail media and should bring significant value to both advertisers and retailers.

The Power of Neutrality

Partnering with a neutral third party brings the ability to unify cross-channel chaos into a single consolidated view. This holistic picture is foundational to making budgeting decisions across platforms and brings much-needed trust and transparency to this rapidly evolving space.

The end result will be media dollars flowing more freely towards those channels and platforms delivering truly incremental growth to advertisers.

David Pollet is the CEO of Incremental, a provider of trusted cross-channel analytics to help brands measure retail media investment impact, optimize marketing spend, and achieve growth.