Navigating Standardization and Incrementality in Retail Media Measurement

By Jay Given, VP, Retail & Brand Strategy, Affinity Solutions

Retail media has become a dominant force in the advertising world, but its rapid growth has outpaced the industry’s ability to measure it effectively. One of the most significant challenges today is the lack of standardization in measurement frameworks, which leaves advertisers struggling to compare performance across platforms and campaigns. Additionally, incrementality—the ability to quantify the true impact of advertising—remains a key but elusive objective. 

According to Bain and Company, “only 6% of advertisers fully trust retailers’ reported media metrics.” This lack of confidence stems from inconsistencies in how metrics like ROAS (Return on Ad Spend) are calculated. Some networks rely on last-click attribution, while others use different attribution methods like first-click or linear attribution, leading to discrepancies that undermine advertisers’ ability to assess performance accurately. 

Incrementality, often hailed as the gold standard for advertising effectiveness with 71% of advertisers recognizing incrementality as the most important KPI in RMN investments. However, incrementality is still not as widely used at ROAS as it requires test-and-control methodologies that are both rigorous and scalable.  

To succeed at retail media measurement, the industry needs to establish standards around terminology, measurement automation, the use of clean rooms for data sharing and the use of incrementality as a table stakes measurement metric.  

Call to Action: Establish Industry Standards  

Here are 5 industry standards retailers need to embrace to ensure the success of their retail media measurement: 

1. Adopt Universal Definitions: It’s no secret that retail media is a fragmented landscape. Without universal definitions, the industry will continue to struggle to harness the power of retail media, especially regarding measurement, accountability, and consistency. The industry needs to standardize definitions to enhance measurement accuracy, streamline campaign planning and optimization, and enable more effective benchmarking. 
   • ROAS: Define it as the revenue directly attributable to an ad campaign divided by its cost. Improve transparency by distinguishing incremental ROAS (iROAS), which measures the lift in sales directly attributed to a campaign, from total ROAS, which captures all sales generated during the campaign, including baseline sales. Incremental ROAS is ideal for post-campaign analysis, while total ROAS is more suited for in-flight optimization and audience penetration tracking.  
   • Exposure: Establish exposure as meaningful engagement, such as ads viewed for a minimum of two seconds or more than 50% completion for video ads. Tailor exposure definitions by media type: for display ads, exposure may require 50% of pixels on screen for at least one second; for video ads, 50% or more completion is standard. Social media and connected TV (CTV) may require customized exposure thresholds based on interactivity and viewability metrics.
   • Attribution: Customer journeys are only growing more complex. Establishing standard definitions for exposure and purchase attribution windows will ensure consistent and comparable measurement of advertising effectiveness across different platforms and campaigns. By level-setting with universal definitions and standardized terminology, the industry will enable consistent measurement and better sharing of information to accelerate growth, align expectations, simplify attribution and create greater efficiency. 

2. Leverage third-party measurement: Retail media networks need to work with independent measurement providers that can ingest first-party and third-party data. These vendors should develop transparent methodologies and provide privacy-compliant insights, ensuring advertisers can trust the results both within retailers’ four walls and for total market impact. By encouraging third-party measurement, retailers avoid the perception of “grading their own homework” and build trust by demonstrating a commitment to unbiased, validated campaign results.

3. Invest in automation and AI: AI-driven tools can automate the creation of test-and-control experiments, making it easier for retailers of all sizes to evaluate campaign effectiveness. For instance, AI can identify patterns in massive datasets, recommend optimal control groups, and simulate multiple scenarios to assess incrementality at scale. This levels the playing field, enabling smaller retailers to compete with larger players. The democratization of testing and analysis tools will ultimately lead to optimized customer experiences across the board, as data-driven insights inform more relevant and engaging interactions for every shopper.
   
4. Establish incrementality as a table stakes metric: Retailers must move beyond solely relying on total ROAS, recognizing it as only one piece of the measurement puzzle. To truly understand the impact of their retail media campaigns, they need to focus on incrementality. By measuring the additional sales driven by a campaign (iROAS), retailers gain a clearer picture of its true effectiveness, enabling strategic post-campaign analysis and informed decision-making. While total ROAS remains valuable for in-flight optimization and audience penetration tracking, it’s crucial to utilize both metrics in tandem, aligning them with specific campaign objectives. This comprehensive approach requires access to deterministic purchase data within clean room environments, ensuring accurate measurement and maximizing overall performance.

5. Embrace data sharing in clean rooms: Clean room technologies provide secure environments for aggregating and analyzing both exposure and purchase data from multiple sources. They allow retailers and advertisers to combine first-party and third-party data without exposing personally identifiable information (PII). Clean rooms also facilitate the execution of complex methodologies in a privacy-safe and compliant way, breaking down barriers for even the most resource-constrained players. This commitment to privacy-safe data analysis within clean rooms builds consumer trust by safeguarding sensitive information, while simultaneously ensuring compliance with evolving data privacy regulations. 

By focusing on standardization, embracing automation, and leveraging clean rooms, the industry can build a more credible and efficient retail media ecosystem that benefits advertisers, retailers, and consumers alike.