The retail media landscape is currently entangled in a significant challenge—effectively measuring the impact of advertising spend. As retail companies morph into ad powerhouses, creating their own Retail Media Networks (RMN), they dangle the lucrative carrot of advertising with margins as high as 80%, compared to a mere 10% from in-store sales. These networks utilize cutting-edge AI to deliver ads that are not just targeted but eerily precise and relevant to consumers. However, this booming channel suffers from a critical flaw: the palpable uncertainty surrounding the true effectiveness and measurement of retail media investments.
The Challenges with Retail Media Measurement
Brands pouring funds into RMN’s are navigating a host of inefficiencies and vague metrics. Advertisers face several daunting challenges:
- The balancing act of brand building
- Brands struggle to allocate their budgets effectively between brand building (Top-of-funnel, or ToF) and direct sales initiatives (Bottom-of-funnel, or BoF). This challenge is exacerbated when the same budget must cover both direct promotional activities (working dollars) and indirect support like market research (non-working dollars).
- Fragmentation and the halo effect
- Measuring the indirect impact of advertising, such as whether an Amazon ad influences purchases across online and offline channels, remains an elusive pursuit. Additionally, allocation of investments between different RMNs and other channels creates a retail media measurement challenge. Marketers question whether they are over-emphasizing their presence on Amazon for example, and should perhaps allocate more resources to other retailers like Walmart or Instacart.
- The credibility of metrics provided by retailers
- There’s a prevailing distrust in the metrics provided by retailers, often seen as biased or manipulated to mask the true efficacy of marketing spend.
- RMN minimum spend thresholds and misallocated resources
- Numerous retailers are currently operating their own RMN, often strong-arming brands to allocate a certain budget across different sections of the platform. This may lead to a decrease in the resources left for brand building activities.
- Inability to determine the correlation between investments in retail media and outcomes
- Brands lack the necessary tools to connect RMN marketing investments to sales in their stores. They are uncertain about the impact of search placement on sales and struggle with improving conversion rates on product pages.
- Digital shelf complexity
- Brands recognize the importance of the digital shelf, including factors like the number of reviews and how the product is worded to optimize search engine optimization (SEO). They wonder how investments in non-working dollars can positively affect organic placement on digital platforms.
These multifaceted challenges underscore a dire need for a more precise, transparent approach to retail media measurement. This is required in order to make informed decisions about allocating their marketing budgets effectively.
Enhancing Retail Media with Technology
Keen offers a solution to the challenges faced by brands in the retail media landscape through its comprehensive portfolio model. By utilizing Keen’s platform, brands can gain insights into the marginal return on investment (mROI) and halo effects of their investments across their entire portfolio. Unlike the traditional metric of ROAS, Keen’s approach takes into account the broader impact of marketing efforts and quantifies the halo effect that ROAS fails to capture.
By providing brands with valuable insights, Keen simplifies the decision-making process and assists brands in allocating their budgets for maximum impact.
| Holistic Data Integration | Keen’s advanced analytics tools integrate data across multiple RMNs, providing a comprehensive view that helps brands optimize spending and strategy based on real-time insights. |
| Dynamic Scenario-Based Planning | Keen enables brands to simulate various marketing scenarios, including external factors like market disruptions, to forecast outcomes and adjust strategies promptly. |
| Enhanced Measurement Capabilities | With Keen’s customized metrics and KPIs, brands gain precise insights into the performance of their campaigns across different networks, enabling data-driven decision-making. |
| Security | Keen is SOC 2 certified and does not use any Personal Identifiable Information to build any model. |
| Strategic Resource Allocation | Keen helps brands navigate the complex dynamics of retailer negotiations, providing the data needed to argue for more favorable terms and better allocation of marketing budgets. |
| Cross-Functional Alignment | Keen promotes integration across organizational silos, ensuring that all departments work towards unified marketing goals with a clear strategy that spans traditional and digital channels. |
Importance of Optimizing Retail Media Investments
Optimizing retail media investments and carefully allocating budgets for maximum impact is crucial for brands operating in the digital landscape. In today’s competitive market, where consumers are bombarded with a plethora of advertising messages, it becomes essential to make intelligent decisions regarding the distribution of marketing resources.
Optimizing retail media investments and carefully allocating budgets for maximum impact is crucial for brands operating in the digital landscape and specifically those advertising on retail media networks. By optimizing retail media investments, brands can ensure that their ads are shown to the right audience at the right time. This targeted approach helps to increase the overall effectiveness of marketing efforts, resulting in higher conversion rates and a positive return on investment.
Allocating Budgets for Maximum Impact
Understanding the strengths and limitations of different channels and platforms is critical in order to allocate your budget for the greatest returns. Brands need to assess the unique characteristics and opportunities offered by each channel and allocate resources accordingly. This ensures that marketing investments are aligned with specific objectives, whether it be brand building, driving direct sales, or a combination thereof.
Evaluating Performance Across Channels
Evaluating performance across all channels is equally important to identify which tactics are delivering the desired results. By monitoring key metrics, brands can obtain insights into the effectiveness of their retail media investments and make data-driven decisions for future campaigns. Continuous evaluation enables brands to adapt their strategies, reallocate budgets, and optimize their overall marketing mix to achieve maximum impact and attain their business goals.
Case Studies: Keen’s Impact on Retail Media
One leading coffee brand utilized the Keen Platform to optimize their retail media strategy. The platform was able to show the brand that their Walmart in-store marketing boosted multi-channel sales. The halo effect created by their Walmart investment boosted sales in all other retailers by $328k in addition to Walmart.com by $646k. This investment demonstrated the broad-reaching impact of targeted marketing investments, extending benefits beyond the initial focus area to enhance performance across multiple retail segments.
Keen serves as a valuable tool for brands in the retail media landscape, helping them overcome their challenges and making informed decisions about where to invest their marketing budget to achieve their objectives effectively.
To learn more about how Keen can support your retail media strategy, measurement capabilities and decision-making, start your 14 day free trial now!
