Latest / Retail Media Breakfast Club / Retail Media's Measurement Problem Isn't Technical — It's Political
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- Retail Media's Measurement Problem Isn't Technical—It's Political === [00:00:00] Kiri Masters: You know, I just published a really meaty op-ed for the publication walk about retail media measurement standards, and it ended up being 2000 words, which was more than I wanted, but really the minimum amount that I could [00:00:15] convey why this problem still persists and what is really blocking progress in retail media measurement. [00:00:22] I'm gonna hit on the highlights today in this episode, but fair warning, I'm leaving out a lot of the nuance around. Tech infrastructure, the role [00:00:30] of intermediaries, and some really interesting details about how different retailers are actually operationalizing these standards. The good news is Walk is making the full article free to access for the next seven days, so I really encourage you to go grab it before it gets pay [00:00:45] walled [00:00:45] and the link to the full article is in the show notes for this episode. All right, so let's get into some of the highlights. [00:00:51] [00:00:52] Kiri Masters: I've lost count of how many times I've heard a brand team say that we need to compare our retail media performance across networks [00:01:00] and then watch them completely derail that goal by asking each retailer for custom metrics or bespoke attribution windows, or one-off reporting formats. [00:01:09] It's this really weird paradox, everyone agrees. That we need retail media [00:01:15] measurement standards, and these standards actually exist back early in 2024, the IAB and the Media Reading Council put out comprehensive guidelines, but adoption of those guidelines is [00:01:30] patchy at best. And here's the uncomfortable truth. [00:01:33] I know that some people are not. Gonna wanna hear it. It's not just the retailers who are dragging their feet. Let's unpack what's really going on here. [00:01:42] At the IAB Connection Commerce [00:01:45] Summit a few weeks ago, Colin Colburn, who heads up commerce and retail media at the IAB said something that made me sit up in my chair. He said that brands are just as responsible for the lack of retail media standardization because they keep asking [00:02:00] retailers for. Custom metrics and dashboards and asking them for different things. [00:02:04] And so he didn't lay all of these standardization issues at the feet of brands. Of course, there are many, many things that retailers really need to, to do to contribute here, [00:02:15] but we all have a part to play and I thought that that was a really interesting point [00:02:18] certainly go check out this post for Walk where I get into a little bit more detail on that. Now another thing that Colin said is that success is incremental. [00:02:24] We've just started acknowledging the problem to solve and [00:02:30] defining what certain things are and aren't in retail media, including things like incrementality and defining what commerce media is, and within that, what retail media is and isn't. [00:02:43] And so we're actually [00:02:45] starting to see more movement towards consistent reporting and data access. But we're still somewhere between the wild west where everything's undefined, even the terminology and full standardization. And the retailers I spoke with, and I spoke with several for this piece, [00:03:00] um, recognize the value in what has been done so far. [00:03:03] S Iranian at Albertson's Media Collective said that the guidelines are a great resource to strive towards. Although she pointed out there's still some gray areas, especially around offsite. Advertising and [00:03:15] via Anand from Dollar General Media Network told me that the methodological backbone is solid, particularly the emphasis on incrementality testing. [00:03:22] But implementation is where things get messy. But here's the thing that might surprise you. The largest and most [00:03:30] sophisticated retail media networks often see little reason to push for industry-wide standards, One senior retail media leader put it to me pretty bluntly, they feel like mid-tier networks are asking the advanced players to dumb down their capabilities and meet [00:03:45] less mature benchmarks. [00:03:47] And that is a problem that's really o only going to be solved if the quote unquote long tail of the industry starts to. Organize and move forward to at least these initial benchmarks that have [00:04:00] been set. [00:04:00] Now, here's one area. I think the industry overall is being challenged. We keep obsessing over which metric to use. In the past might have been roas, although that's certainly fallen thankfully out of favor recently. But there are still other [00:04:15] metrics that. [00:04:15] Brands especially really want to clinging to when we should be debating methods instead. Let me explain. This is one area where the IAB guidelines get this right. They focus on approaches that prove causality. [00:04:30] Things like randomized controlled trials and match market tests, rather than elevating any single. [00:04:35] Metric via Anand from Dollar General Media Network reinforced this when he told me that Dollar General has adopted these gold standard approaches, including [00:04:45] RCTs for the media network and match market tests for enterprise marketing. But what happens after that? Media buyers try to rank every retail media network by a single number, even when the objectives differ completely from one network to [00:05:00] another. [00:05:00] Here's an example, and I shared this from an interview that I did with Melanie Babcock. From Home Depot's, orange Apron Media, where we spoke earlier this year, and she gave me a perfect example of why this doesn't work. In home improvement, a supplier might [00:05:15] launch an exclusive variation like a force at color, at the Home Depot, and testing adoption [00:05:22] Across many SKUs over several months, that same supplier might only list their top 10 SKUs at a mass [00:05:30] retailer where the focus is on replenishment and sell through. So it's a different assortment, different objectives for that supplier, and different timelines that they're expecting to see results from. [00:05:42] So how can you possibly judge [00:05:45] those two retailers using the same ROAS number and Melanie's proposed solution is. To look beyond a metric like ROAS and look at what she calls return on marketing objective or romo. [00:06:00] And this is where you judge incrementality against the goal of that specific retailer relationship, not some universal benchmark. [00:06:15] Shoppers don't think in silos. They bounce between online and in-store without skipping a beat. Acosta Group's. Connected Commerce agency helps brands unify trade and retail media budgets to invest where shoppers are [00:06:30] most likely to convert, whether that's on mobile or in the store aisle. Learn more about acoa Group Connected Commerce at ACOA Group and let them know Retail Media Breakfast Club sent you. [00:06:43] That's [00:06:45] A-C-O-S-T group. [00:06:48] Kiri Masters: Let's talk about the infrastructure problem, because here's where things get really interesting. Retail media as an industry has grown up really quickly, right? Retail media wasn't [00:07:00] part of the vernacular even five [00:07:01] years ago, five, six [00:07:02] years ago. Pre pandemic networks have sprinted to market with whatever technology they could cobble together. [00:07:09] And now many are stuck with fragmented systems that weren't built for standardized reporting. And [00:07:15] in some cases, this technology wasn't even built for retail media. It was built for other verticals. And so [00:07:21] identity, [00:07:22] Kiri Masters: customer identity, audience identity has become the new battleground here. Laurie Janho. [00:07:28] From LiveRamp [00:07:30] explained to me how RAMP ID has become an identity spine for much of the retail industry, helping networks build audiences, activate media and tie exposure data back to sales in clean rooms. And this is one of the potential [00:07:45] solves for these issues, [00:07:46] is. [00:07:47] Kiri Masters: retailers sharing audience exposure data with advertisers in data clean rooms. [00:07:54] This also ties back to some topics I've covered in the past about retail media federations. [00:08:00] And consortiums where in theory, several retailers could work together with their data, clean rooms to expose audiences and activation back to ~advertisers and~ [00:08:11] ~create real economies of scale so that ~advertisers. And create real economies of scale across a [00:08:15] number of, [00:08:15] you know, [00:08:15] Kiri Masters: subscale, potentially retail media networks. [00:08:19] And why this is important. And here's another recent example. Best Buy announced , we got next, their next generation retail media network in their technology, they've built a foundation where [00:08:30] 90% of transactions tie back to a customer id, and their goal is to have a completely transparent, unified attribution across both onsite and offsite advertising activation, eliminating duplication [00:08:45] across multi-party clean rooms. [00:08:46] This is an area where some retail media leaders with more sophisticated networks have told me that there's a significant problem the infrastructure that some retail media networks rely on is often broken. This comes [00:09:00] down to [00:09:00] the [00:09:00] Kiri Masters: identity stitching and resolution. The way that data is ingested, the way that audiences are created, these are the building blocks of measurement, and when those fundamental building blocks are suboptimal, it makes.~ makes.~ [00:09:14] ~The, ~[00:09:15] even [00:09:15] [00:09:15] Kiri Masters: the best practice measurement frameworks, [00:09:17] it completely degrades all of that [00:09:19] Kiri Masters: because the building blocks weren't solid to begin with. [00:09:22] And Colin Colburn from the IAD acknowledges this. He notes that retailers aren't inherently media businesses, [00:09:30] many lack the internal know-how to properly extract and share data in ways that would make standardized reporting easy. Now, I know a lot of these I've, I've met a lot of these measurement people at retail media networks. [00:09:41] They're very. Smart and very hardworking, but often they're [00:09:45] working within a enterprise that just doesn't have those bones and that structure, and so they're just trying to do the best they can with what they've got and with the technology that they may have onboarded several years ago, [00:10:00] which. Might not be serving all of their goals, but they're sort of locked in in some, in some cases. [00:10:05] So look, there's a lot to unpack here. I've sort of roamed all over the map, as you might've been able to tell. [00:10:11] But here's the thing, and this is something that Melanie Babcock from Home Depot told [00:10:15] me. If you want to be a top retail media network, you need relationships with the governing bodies like the IAB and the MRC to show you're following the rules and not building a bespoke system. [00:10:27] And so some of these retailers like [00:10:30] Best Buy, like Home Depot, they're building these deterministic foundations. They're really focusing on attribution and building incrementality programs that are designed for real. Comparison across different networks. But here's my [00:10:45] take. Standards won't arrive by proclamation from an industry body. [00:10:50] They will happen when the cost of fragmentation finally outweighs the comfort of the status quo. And for now, everyone's just comfortable [00:11:00] enough with the chaos to keep asking for custom reports. Now, like I said at the top, this is very much the abbreviated version. Please check out my full article at Walk, which goes a lot deeper on the technical debt issues, the roles of different [00:11:15] technology partners, and more, more perspectives on what good actually looks like in practice. [00:11:21] It's free for the next seven days, so grab it while you can. Catch you tomorrow. [00:11:24]