Challenge 2: What to measure, and how

As commerce—a performance-driven action—becomes more embedded into brand marketing through products like shoppable ads, the best way to measure what’s working also needs a facelift

While return on ad spend is still the main measure in retail media, different marketing goals require different kinds of measurement, regardless of whether media has a shoppable component.

“I would edit the statement that retail media collapses the purchase funnel,” said Kristi Argyilan, senior vice president of retail media at Albertsons Media Collective. “It has the potential to. Until we do better content, until we really move up the brand chain and can publish these really rich brand messages that then lead to an option to buy, I don’t think that we have a right to say that we’ve collapsed the purchase funnel.”

Still, that kind of measurement is challenging, especially for companies that are early in their journey into commerce media.

And, go figure, it can take the brands pulling back on spend to spur that measurement change within growing RMNs.

“When I have helped build these capabilities in my career, I often knew where I needed to invest to keep pace with the big RMNs. But it wasn’t until an advertiser showed up with a scorecard and told marketing leaders that we were behind—and that it could limit their ability to invest in our network—that the development investment was unlocked,” said Derek Nelson, senior director of retail media consulting at media and measurement firm Ovative Group. “Partner feedback is truly a gift.”

Challenge 3: It’ll cost ya

To attract more advertisers, retailers need a different way of thinking about media—and they need to invest in the kind of tools that media buyers want to use.

This means listening to buyers, building out more programmatic and measurement capabilities and investing in the media product itself so that onsite ads are ones that brands want to buy. U.S. retail media spending will grow 30% in 2024, largely driven by offsite programmatic retail media platforms, according to Advertiser Perceptions data from March.

Several major RMNs are still operating without simple measurement tools, the first buyer said. This can make it hard to understand, say, how product listing ads are performing on a retailer’s website.

Ways to help retail media compete across channels include offering features like page ranking analysis by keyword over time, access to affinity data, audience insights tied to loyalty programs and data insights tied to the register, inventory and store sets, they explained.

Retailers also need to invest within their stores to take advantage of much-hyped in-store digital ad placements. And TV walls are just one element.

In-store “will be in high demand from advertisers [over the next couple of years],” said Steve Baxter, executive vp of retail media at Ovative Group. “Scaling in-store opportunities will be capital-intensive, so be confident that your future in-store ad revenue projects will be incremental versus cannibalizing your existing onsite and offsite digital ad revenues.”