Measurement is the word defining retail media right now

Instead of simply determining attributable return on ad spend (ROAS), many speakers were especially interested in ways to measure incrementality. What incrementality attempts to measure is whether a sale happened because of a certain retail media spend or advertisement — or whether or not a sale would have happened even if the brand didn’t spend on retail media.

“Measurement is becoming more and more important. [For] CPGs, fundamentally, retail media opened up this ability to measure — it wasn’t just brand awareness, it wasn’t just volume of impressions. And I think we’ve seen an evolution of what measurement means,” said Yuni Baker-Saito, founder of Chicory, a contextual advertising platform that specializes in food and grocery. “I think you really need to push for incremental now. … Incremental is really where you’re getting more bang out of your buck.”

Chicory partners with marketing firm Mars United Commerce to test with retailers, get incremental ROAS and layer on shopper data, according to Baker-Saito. Amy Andrews, president of Mars United Commerce, said this is a huge opportunity for all of her company’s clients.

“As we have the broader conversation on where can we invest our dollars, we absolutely need data to understand: Did it work?” Andrews said. “I think there’s a big conversation in the retail media space of, ‘Can we trust the data sources we’re getting?’ ‘Do they match what we have?’ And that, of course, will continue to raise questions and provide value in the data we’re getting back.”

Tim Bagwell, chief product and data officer for Barrows — a shopper marketing and digital in-store agency — said there are four big buckets of data in measuring the success of retail media investments. Those include customer surveys, retailers’ transaction and inventory data, point-of-interest data, and data from digital displays.

Bagwell said the digital displays can track that a person stood in front of a display, looked at a display or made a purchase. “Because of privacy concerns, you can’t know the exact individual that was exposed to the media,” he said. “But you can know an individual was exposed.”

Ryan Mason, president and COO of Markacy, said incrementality is the most important pillar to measurement for his company’s clients. Markacy is a New York-based agency predominantly focused on digital marketing that works with consumer brands as well as their private equity and venture capital sponsors.

As Mason sees it, there are four key pillars to measurement: The first is attribution in ROAS, and the second is modeling based on a brand’s unique marketing mix model. The third pillar of measurement involves talking to customers, such as through post-purchase surveys. And, the fourth pillar is incrementality.

“What I like to say to our clients and our partners is that attribution and ROAS make you feel good if you see a high number, but incrementality makes you money,” Mason said.

Measuring incrementality, according to Mason, comes down to “a workbook of statistics, putting together either … a market-based approach or a split-testing approach on the platform itself, or working with … a measurement partner like Haus or Recast.” Some retailers offer tools for this in-house. For example, Kroger Precision Marketing last December launched a new incremental ROAS tool for campaigns placed through The Trade Desk.

Mason said he encourages his clients to look at incrementality because, otherwise, they wouldn’t have an answer as to whether they would have gotten the same results through a different strategy. “[In] funneling the right testing strategy and measurement strategy, even to a new platform, incrementality is pretty key,” he added.

He also said that, because there is now a sea of retail media networks, measuring incremental ROAS can be difficult — even with a team of people focusing on making sure those metrics are correct. He added that he would like to see retailers allow brands to adjust what incrementality means to them, depending on their category or brand. Some, he said, may see it as looking at new-to-file customers versus new-to-brand customers, or analyzing which are new sales that wouldn’t have happened otherwise.

“If you’re buying across even 10 of them, or 20, taking all of their definitions of what a click is, what a sale is, what ROAS is actually attributed to you — or what incrementally or IROAS actually means — is hard,” Mason said. “I would love to see some more flexibility or modularity with how they do that, so you can maybe define what it means to you as a brand.” This is a problem outside of retail media, as well, such as with Google and Meta, he said.

Khara Hutchinson, head of programmatic and digital integrated activation for pharmaceutical and biotech brand Bayer, said her company is looking at market share shifting to determine, “Where am I seeing true incremental growth, and where am I just moving retailers?” She said fragmentation also continues to be a problem when tracking retail media investments.

“We’re not going to get rid of that,” Hutchinson said. “Amazon and Walmart aren’t going to miraculously let you merge your audiences and see where the overlap is.”

Hutchinson also said that brands need to get past ROAS in retail media as they move toward upper-funnel formats like connected TV (CTV).

“If you have upfronts and you’re running CTV, how do you make a case to run a retail media-specific CTV?” she asked. “It might count towards your upfront agreement, but also your data cost now is so much higher because it’s a percent of the media. Those are the conversations we’re having with the retail partners. … We’re trying to remove the tension and trying to work on what we can do together.”

Sarah Lipski, sales strategy director for RoC Skincare, said her brand would like better access to performance metrics and data to ensure visibility on both ends. As a hypothetical, she asked, “If we give you half a million dollars, what do we get for it?”

“We’re a very fact-based, data-driven company as much as we can be — and let’s sit down; let’s lay out the data; let’s lay out the results and the performance,” Lipski said. “We’re all very passionate about where the money should go and where we need to spend. We have to prove where it works and where we get the biggest bang for our buck at the end of the day.”