Latest / Retail Media Breakfast Club / Bulldust Metrics In Retail Media
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- Bulldust Metrics In Retail Media === [00:00:00] Kiri Masters: My latest skit video for The Drums Basket Case podcast features a brand CMO with main character energy who is quite pleased with herself for inventing a new performance metric called purchase intent [00:00:15] velocity, which she describes as velocity of intent to purchase at the moment of consideration. [00:00:23] Now, of course, there's no methodology behind it and no actual engagement with the retailers, but we're sure they'll [00:00:30] figure it out before the next JBP if they really want that brand budget, that is. Now the video, um, which I'll link up to in the show notes here, is a funny take on bullshit metrics [00:00:45] in the industry. [00:00:46] But like any joke, there's true pain and weirdness behind it. Let's jump in [00:00:52] [00:00:53] Kiri Masters: The thing about bullshit metrics is that they only look like bullshit to the other side. [00:01:00] And many measurement folks that I speak with at retailers truly believe they are providing the absolute best and most holistic type of metric that is within their capability [00:01:12] While preserving their [00:01:15] customer data. There's also missing pieces that the retailer can't account for. For example, Albertsons' incremental MTA measurement framework, which I spoke about last week, pulls in large swaths of [00:01:30] walled garden touchpoints from Meta and from DV360, but not Google Search And so retailers recognize there might be some gaps, but they might view their efforts as getting ninety-six [00:01:45] percent on a test. [00:01:46] Pretty damn good [00:01:47] But brands zero in on the gaps like a Taipei parrot. What about that last four percent then, son? And the whole thing gets discounted. Now, from the retailer's point of view, [00:02:00] brands are asking for too much. They ask competing retailers to set up data clean rooms to isolate audiences, a scenario where a challenger retailer has much more to gain than the dominant one. [00:02:12] They demand custom dashboards [00:02:15] that never get used [00:02:16] And we can't even agree on the basics. A few months ago, Albertson's innovative group released a white paper called iROAS Demystified, which found that methodological choices alone can [00:02:30] swing incremental ROAS by six and a half times [00:02:34] When I spoke with Liz Roche, who is the VP of media and measurement at Albatsen's Media Collective for that piece, she described what genuine curiosity looks like in [00:02:45] practice, and it's hard. She says it's getting data scientists from both sides of the table, from the retailer and the brand, to sit down and, as she put it, "duke it out for about six hours" until they reach agreement on a [00:03:00] methodology. [00:03:01] Like I said in my write-up of that report a few months ago, that requires vulnerability from the retailer whose methods are being scrutinized, and from the brand, which might learn that their first conclusions were [00:03:15] misplaced [00:03:16] But there is an area where retail media has a unique and profound benefit [00:03:22] Both parties share the same ultimate goal, which is to drive sales. [00:03:30] Brands wanna sell more stuff, and retailers wanna sell more stuff. At the Ascendant Bootcamp event in September, amid a discussion about measurement and some degree of hand-wringing about how it's still facing down major gaps, [00:03:45] an RMN leader stood up and said, "Well, we do have standardized measurement, and we have for a while. [00:03:52] It's called sales lift." And a brand side media buyer at that event agreed. They said, "My [00:04:00] goal is to shift palettes with RMNs. That's it And I just spoke earlier today with Gopuff Retail Media GM Perutka for an upcoming profile piece, and he told me that he's been calling [00:04:15] ROI, and ROAS bullshit metrics for years, and that moving product is the only metric [00:04:21] that truly cannot be gamed. Now, that all makes a lot of intuitive sense. But as I wrote last [00:04:30] week in my piece about MTA, the tricky part of all of this is the media planning part. What combination of ads, when to serve them, where to serve them, which products to serve them on? These are all questions [00:04:45] that are upstream of that end goal of sales lift. [00:04:49] If I'm spending budget as a brand, I need some early clues on what is working. I want to isolate which tactic contributed more than the [00:05:00] others. Because as a brand, I also have a report card. One that hopefully demonstrates my own fingerprints on the outcome of growing sales because there's likely a whole lot of other people [00:05:15] internally who'd also like to claim credit for growing those sales. And that is one reason why ROAS persists. your advertisers [00:05:30] can't wait weeks for audiences. GrowthLoop's Composable Commerce Media solution helps media teams turn first-party data into high-value audiences, launch campaigns faster, and prove [00:05:45] what's working across every channel. Learn how retail media leaders at Costco, Fanatics, and Gopuff use GrowthLoop to create highly segmented audiences and deliver [00:06:00] stronger results for their brand partners. [00:06:03] Visit go.growthloop.com/breakfast. That is go.growthloop.com/breakfast [00:06:15] I published a piece called Why ROAS Refuses to Die in February of this year, discussing why brands still rely on ROAS, why it is lacking as a metric, but also some fairly rational [00:06:30] reasons as to why it persists. [00:06:33] And in sort of returning to this topic today, I wanna share some comments that came through from the peanut gallery on LinkedIn when I published that piece because I think they [00:06:45] really add a lot to the conversation. So the first one is from Austin Leonard, who is the GM of Dollar General Media Network. [00:06:53] He said, "ROAS as a standalone, no context KPI should not be the standard, but it [00:07:00] does provide some basic currency across retailers when used with context and is an informative supporting metric. Brands need to decide how and if they incorporate ROAS in [00:07:15] performance analysis across short-term spending and long-term models like media mix modeling. [00:07:21] But even emerging brands should use it while also factoring in targeting parameters, new brand buyers, LTV, media [00:07:30] efficiency, et cetera, as part of the story of how their marketing is performing. And yes, getting the details on basic ROAS closed-loop methodology should always be a first step in the decision to use or discard it as a relevant [00:07:45] metric." [00:07:45] Very insightful comment there. There's a couple more. One is from Kirsten Gilbert, who is now VP Sales and Growth at digital signage company Navori Labs, and she said that half of the decks that she sees on [00:08:00] in-store campaign success still focus almost entirely on ROAS. But she says brands want physical retail media to behave like digital ads, but the store is really a mix of media, merchandising, [00:08:15] and environment, and increasingly a place for softer narrative brand moments as well. [00:08:20] The most promising work she says that she's seeing isn't about replacing ROAS, but layering it with signals like basket lift, dwell, and [00:08:30] category impact to understand the full effect of in-store media. Corey Buhler, who is the senior director commerce media at Dentsu, said that ROAS isn't inherently a bad metric. [00:08:44] It just [00:08:45] needs a lot of context to derive insights. He says your benchmarks have to be very specific to the situation. What's in the measurement set, as in [00:08:56] Featured versus halo ROAS? [00:09:00] Is it brand versus non-brand targeting that's being considered? Heck, even individual placement benchmarks depending on the attribution model, and even then it should inform your learning agenda, not campaign [00:09:15] success. ROAS is red herring city. And finally, that sentiment was echoed by Fernando Olivero, CSM at the retail media aggregator Unlimitail, who said [00:09:30] that, "ROAS without context is just a number. [00:09:33] Without clarity on incrementality, margin structure and baseline demand, ROAS will be inefficient. Until incrementality frameworks are standardized across retailers [00:09:45] and advertisers, ROAS will be king." I'll link up to when I shared that, piece on LinkedIn so you can see all of the comments of some super insightful conversation happening there. [00:09:55] So wrapping up here, we kind of end up where we started. [00:10:00] Um, I hear from people who are brave enough to proclaim that they're actually solving measurement for good for real this time. Bring it on. Let's hear it. But as I so often find when writing this newsletter [00:10:15] and doing this podcast, it comes down to incentives. [00:10:19] Everyone believes they are behaving rationally in their head, even if it looks kind of like bullshit to somebody else. Here's the thing, blurred [00:10:30] lines create a little bit of shadow, just enough shadow to hide your demons and sandbag some budget for next year when you might really need it. That's it for today. [00:10:43] Thanks for listening, and [00:10:45] I'll catch you tomorrow [00:10:45]