In 2024 retail media grew substantially, becoming a pivotal part of ad budgets. With a strong media buying partner, measuring retail media success can be easy. Where the medium thrives in first-party data, it flounders in robust measurement. Filling the measurement gap is critical to optimizing and taking advantage of the first-party data retail media provides.
Measurement is critical to all advertising – retail media is no exception. Retail media is predicted to increase by over $75 billion in the next four years, according to eMarketer forecasters. By working alongside a media buyer who supplies ample measurement capabilities, marketers can fully take advantage of this exceptional growth.
With retail media on the rise, brands must work alongside expert partners to measure the impact of their retail media and get the most out of this crucial medium.
Retail media is booming
Retail media is on a meteoric rise and it’s not difficult to understand why. The format fills necessary gaps with threats of third-party cookie elimination and a growing need to reach customers where they are.
First-party data is a viable solution for marketers wishing to distance themselves from third-party cookies and retail media is a reliable and secure source of first-party data. Media like loyalty programs and memberships provide ample data while incentivizing customers to continue to spend.
Additionally, there is a growing demand for brands to reach out to customers when and where they are. Customers won’t come to them. According to forecasters at eMarketer, this is an essential reason for the recent growth in the retail media space.
eMarketer also predicts that retail media ad spending in the US will grow by 26% in 2024 – outpacing the overall growth of digital ad spending (which it predicts will grow 12.6%). The medium is also on pace to continue its growth in 2025, when it is expected to make up 20% of digital ad spending, surpassing $67 billion USD.
With retail media growing so rapidly, it’s important to consider how it can be leveraged most effectively before jumping on the bandwagon. One of the keys to getting the most out of it (like any form of advertising) is measurement.
This is where some solutions fail. Many media solutions only offer buyers the most basic metrics, and some offer none at all. Understanding impressions, click-through rates, and return on ad spend (RoAS) is essential for optimizing retail media campaigns.
Questions to ask before measuring retail media
Since measurement is so important to retail media success, brands looking to start leveraging the medium should ask tough questions before leaping in. Asking the right questions can help brands choose the right media solution and get the right metrics for their business.
These are some of the key questions to ask before choosing a solution for any retail media campaign:
1. How do you define an impression?
Digital advertising has a clear standard for identifying an impression; IAB standards define an impression as when an ad is shown on a website, regardless of whether or not a customer sees it. Digital advertising also has standards for viewable impressions (when an as is seen by a customer).
The issue with retail media is that solutions don’t always divide viewable impressions into separate metrics. Some solutions may also only report viewable impressions. Knowing how each solution defines impressions and displays them to users is critical in understanding the success of your campaigns.
2. How many clicks does the solution count per impression?
In retail, only one click is (usually) counted per impression. This is true even if the same customer clicks three or four times on an ad, resulting in multiple purchases. While this isn’t always the case, it’s important to know how clicks are counted so that you have a proper grasp of what your metrics mean.
3. How do you attribute sales?
Sales attribution is crucial to understanding the success of an ad campaign. Retail sales can be attributed to either ad clicks or ad views.
View-based attribution is most commonly used for display media. Sponsored products, on the other hand, are most likely going to rely on click-based attribution. This isn’t always the case, though, and advertisers need to know how sales will be attributed to best understand their successes and failures.
It’s also important to know what the attribution window is. Some retailers choose a seven-day window, others a fourteen-day window. Be sure to know how the time in which a sale can be attributed to your campaign.
4. Does the solution filter bot activity?
A final thing to take note of is whether or not bot activity is being filtered out of your metrics. Many retail media solutions don’t filter out this activity. Bots can be present in your impressions and clicks. If it isn’t filtered out, then consider the prevalence of bots when analyzing your numbers.
Retail media is a powerhouse for first-party data and a boon for advertisers. While this critical space is growing, its measurement capabilities are relatively stagnant. For the best success with retail media, advertisers need to leverage solutions with holistic measurement capabilities. By prioritizing measurement, advertisers can take the lead in the rise of retail media.
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