Tactically applying adstock to retail media 

What can be learned by applying this to retail media? 

While most would consider search (retail and non-retail) to have a fairly immediate impact, adstock can better capture the impact of larger ad units that may also have a brand-building impact—for example, Sponsored Brands on Amazon Ads due to their visual size and ability to incorporate video. Analysis has shown that these types of ad formats tend to be undercredited by last-touch attribution.

This disconnect of performance is even more important as retail media continues to move into ad units for stronger brand-building channels like CTV. If not taken into consideration, this can lead to an overallocation of investment at the bottom of the funnel.

Adstock is also a useful metric when applied to products with different consumption or consideration patterns. Today, major shopping platforms are not just purchase destinations but a starting point for product research. This usage is particularly applicable to categories with longer research periods. It can also be used effectively when planning investments around key events like holidays, promotions or product launches.

Because the combination of these efforts needs to peak within a specific timeframe, an understanding of adstock is key to optimizing media spend and ensuring that these positive effects align with the target date.

Finally, measuring adstock is a valuable tactic to improve sales forecasting, particularly in considering significant increases or decreases in spend. Utilizing the adstock effect can help to determine when these budgetary changes will impact the sales department.

Forging the future of measurement

Measurement must look beyond predefined lookback windows to a more nuanced notion of impact over time. It must have awareness of retail media and broader media, accounting for the differences in marketplace dynamics and broader media investments, and it needs to account for the notion of incrementality and draw the connection between the advertisement causing, instead of merely influencing, a sale.

Better measurement will help unlock the full potential of retail media, enabling marketers to deploy retail media effectively across the full funnel to drive growth for their business.