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Are Standardized Metrics What Retail Media Needs?
Albertsons Media Collective, Albertsons’ retail media arm, unveiled a preliminary framework last week at The Cannes Lions International Festival of Creativity in France to help standardize specifications and methodologies across retail media networks to maximize the emerging medium’s potential.
The first version of the framework, available in a new whitepaper, concentrated on four areas: product characteristics, performance measurement, third-party verification and capabilities.
Kristi Argyilan, SVP of retail media for Albertsons, in a column for Adweek, wrote that as networks are launched and methodologies built out, retailers must consider:
- Should online sales be solely tied to media performance, or should the complexity of in-store sales also be added?
- Should channels be measured separately or can multi-touch attribution be used?
- What attribution window should be used?
- Should match rates of customers be used to extrapolate data?
- What methodology should be used for incrementality?
“Each of these questions is crucial for a retail media network setting up its overarching measurement strategy, but these decisions are often made in a vacuum and are limited based on the retailer’s technical capabilities,” she said.
Ms. Argyilan added that with differing “proprietary” methodologies across networks, advertisers are experiencing difficulties in cross-platform comparison, limited transparency and inconsistent reporting.
Internal measurement models, according to Ms. Argyilan, “are often hampered by the respective retail media network’s ability to provide consistent, granular data quickly. Additionally, as self-service options in the industry are finite, the ability to act on these measurement solutions can also be limited.”
She told adexchanger.com that programmatic advertising went through the same phase in the nineties and organizations like the IAB (Interactive Advertising Bureau) were formed to set standards for online ads. Guided by an advisory group, the framework is expected to evolve further to support key initiatives by the IAB.
Aaron Sobol, head of US Media Investment and Partnerships, Unilever and an advisory group member, said, “At Unilever, we are supportive of this workstream as we believe it’s essential for the industry to come together to tackle standardization when it comes to attribution, measurement, frequency of reporting and transparency. We continue to be an advocate for industry-wide solutions.”
Discussion Questions
DISCUSSION QUESTIONS: Do you see more benefits than drawbacks to retailers collaborating on standardized metrics or will agreed-upon measurement protocols create competitive disadvantages? What complexities do you see in developing universal standards for retail media?
Poll
Loading …BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Melissa Minkow
Director, Retail Strategy, CI&T
Striking a balance between industry-wide standardization and individual competitiveness is crucial. There are befits and drawbacks to universal standards. Benefits include:
(1) Consistency: Standardized metrics enable brands to consistently measure and evaluate their performance across various channels and platforms, allowing for better benchmarking and comparison and facilitating improved decision-making.
(2) Efficiency: Common measurement protocols can avoid duplication of efforts and reduce the resources required for individual metric development and data collection.
(3) Improved Collaboration and Partnerships: With a common language and measurement framework, retailers can more effectively collaborate with advertisers, agencies, and other stakeholders.
Drawbacks include:
(1) Competitive Disadvantages: standardized metrics could reveal sensitive and proprietary information and potentially give their competitors an advantage.
(2) Diverse Retail Ecosystem: Retailers have different measurement needs based on their specific strategies, channels, and business models; accommodating diverse requirements in a standardized manner can be complex.
(3) Data Challenges: Implementing standardized metrics requires robust technology infrastructure and data collection capabilities. Ensuring data accuracy, consistency, and privacy can also be complex, especially when multiple parties are involved.
Brands want/need standardization of measurement to understand the effectiveness of retail media networks. Yes, the promise of these networks is quite clear for brands, but without a way of comparing networks, how can brands understand where they will see the best ROAS? For retailers, supporting a standard measurement system will open up access to their RMNs to more brands. I don’t see this as a differentiation failure, but rather an advantage. What really distinguishes a retailer’s RMN from another is their reach. And brands want to compare that across retailers. So yes, it is inevitable that we’ll see standardization in this medium. In the long-term, brands can’t realize the benefit without it. The next question is how far does that standardization reach? ?Brands ultimately will want this across not only online mediums, but in-store, and across CTV platforms to be able to paint a complete picture of their ROAS across customer profiles.
Identifying 6-8 standardized KPIs with clearly defined elements and calculations would allow businesses and analysts to more concisely evaluate performance to competition as well as opportunities for improvement within their own companies. This is much easier said than done as the system capabilities behind the scenes are often cobbled together containing dated technology, cumbersome processes and one off calculations. This would be a heavy lift for all involved but well worth the effort in the long run ultimately improving profit and revenue for those who fully embrace the opportunities.
It’s very easy to see why the advertising and financial communities would want as many standardized metrics as possible. Even retailers and brands themselves would love to see comp numbers across the competitive spectrum. But they may also not want their competitors to have visibility into their numbers. Attributing sales and margins and conversion rates to the different channels, with precision, is extremely difficult. Standardizing the performance metrics would certainly help retailers to avoid chasing shiny objects and work toward implementing new tools that actually work.
Benefits of retail media collaboration include unity, efficiency and measurability, which will elevate industry performance.
• Unity: Industry guidelines help all stakeholder groups use the same framework and speak the same language.
• Efficiency: Smashing proprietary silos frees up resources, as advertisers no longer need to adapt to different retailers’ frameworks.
• Measurability: If everyone uses the same protocols and metrics, reporting and comparisons become easier.
Retail media complexities include debate and the tension between a sense of urgency and the need to get it right.
• Debate: Industry standards spark tough conversations that can make stakeholder unanimity challenging.
• Urgency vs. excellence: Other standards bodies have taken years to untangle difficult industry issues. Albertson’s leadership will speed up standardization efforts.
These questions are crucial, wonderful questions every retailer should be asking. I think in general, standardized metrics across retailers would be helpful- we could have used it in the beginning of the metaverse hype.
Can we stop trying to make advertising on retail media networks the same as advertising generated by a marketer, no matter if it is TV, online. print or on mobile. The purpose of that advertising is the AIDA process. RMN is in place for the retailer to have another silo to generate promotional funds and for the brand’s sales team to generate more sales from the specific retailer.
Advertising, traditional or new, is about the brands. RMN are strictly about the retailer. The retailer doesn’t care if it is Coke or Pepsi advertising as long as they can generate funds. The marketer participating in Albertson’s RMN will not be measuring what happens to the brand at Publix. The answer is pretty simple, what happens at Alberson’s? If the brand participates in a retailer’s RMN, the brand will expect the retailer to be buying truckloads. If not, give the funds to another retailer.
At the beginning of my career I was a sales engineer for a Danish company that built its entire global brand on developing, meeting, and exceeding global test & measurement standards. The internal joke was that standards are terrific, everyone should have at least one. The monetization conflict of retail (at least in-store) media networks is that they need retailers AND Brands to sell endemic products in a personalized and localized manner, not make it easier for general programmatic advertising that proliferates every webpage.
The National Sales Manage goes to marketing and presents the following:
If we buy Mr. Retailer’s RMN, they promise us extra facings on all our products and four weeks of end aisle displays.
The Marketing Manager says, I am sorry, but the advertising metrics don’t measure up.
The question is, “What is the name of the game?”
Good idea in principal. In practice I sense these standards will be very difficult to gain agreement and document. And who is making the decisions? Whatever standards are documented would have more credibility depending on how big the “tent” is housing the collaborators/decision makers.
So-yes, I see benefits. No it will not be easy.
The IAB is already underway trying to establish some standards around RMN advertising. Consortiums have also formed their own set of standards for retail media. For advertisers, the importance here is to be able to compare metrics across retailers and invest appropriately in those that generate higher ROAS (return on ad spend). Advertisers want to see automated buying, programmatic and RTB (real time bidding) to optimize costs. Retailers will compete on metrics standards to the extent that advertisers care that the metrics are comparable. The problem is that we don’t live in a fair world and retailers under and over performing will attempt to align to the metrics that are strongest for their solutions. Eventually, standards must arise, though it may take time. Capitalism at its best.
In a world with no recognized retail media best practices, each network’s walled-garden is left to define its own way of doing things. This surely drives brands crazy, as they simply don’t have the bandwidth to master the quirks and methods of RMNs beyond a handful of the very largest.
It makes some kind of sense for brands to advertise on the networks with the largest audiences. It’s more efficient, for one. But the situation leaves smaller retailers (including many regional powerhouses) out in the cold. Which means brands miss out on reaching significant portions of their target consumers.
Standardizing measurement will certainly be essential for this emerging area of business, but it will mean very little unless some standard business practices are put in place simultaneously to enable streamlined collaborative planning and wider participation across the retail landscape..
While standardized metrics would help foster consistency for retail media (and provide the most clarity for their readers), it ultimately can have a negative impact on retailers and their business model. Each retailer has their own measurement needs based on their unique pricing strategy, region, channels, and more. As such, in our diverse retail ecosystem, it would be extremely challenging to create a standard that would meet each retailer’s needs while ensuring data accuracy and consistency across the board.