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 retail media measurement.
What is retail media measurement?
Retail media measurement quantifies the impact of advertising across retailer platforms like Amazon, Walmart, and Target. It tracks key performance indicators including sales lift, return on ad spend (ROAS), and brand awareness to help marketers optimize their retail media investments and demonstrate clear business impact.
Unlike traditional media measurement, retail media measurement directly connects ad exposure to purchase behavior through retailer first-party data, providing attribution of marketing’s contribution to both online and in-store sales.
Key metrics include:
- Incremental sales and ROAS
- New-to-brand customer acquisition
- Category share growth
- Cross-channel impact on brand metrics
This closed-loop measurement enables marketers to prove retail media ROI and make data-driven decisions about channel investment and optimization.
The challenges with retail media measurement
Brands pouring funds into retail media networks are navigating a host of inefficiencies and vague metrics. Advertisers face several daunting challenges:
1. 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).
Keep learning: How to create a full-funnel marketing strategy
2. Fragmentation and the halo effect
Measuring the indirect impact of retail media 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. Media buyers 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.
3. 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.
According to Keen’s Chief Revenue Officer, Bradley Keefer, “If you were to add up all the ROAS metrics reported by individual platforms, the implied revenue would often far exceed your actual business results—clear evidence that platforms take credit for overlapping or external impacts. At Keen, we address this with a multiplicative modeling approach that accounts for cross-platform interaction effects. This ensures our models deliver a more accurate and trustworthy measure of ROAS and ROI, giving you a holistic view of your marketing’s true impact.”
4. RMN minimum spend thresholds and misallocated resources
Numerous retailers are currently operating their own retail media networks measurement, 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 equity building activities.
5. 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.
6. 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 media platforms.
These multifaceted challenges underscore a dire need for a more precise, transparent approach to retail media impact measurement. This is required in order to make informed marketing investment decisions about allocating their budgets effectively.
How to measure retail media impact with technology
With our marketing measurement solution, Keen helps brands navigate the challenges of the retail media landscape. By utilizing our 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 return on ad spend (ROAS), Keen’s approach takes into account the broader impact of marketing efforts and quantifies the halo effect that ROAS fails to capture.
Retail media measurement best practices
By providing brands with valuable insights, Keen simplifies the decision-making process and assists brands in allocating their budgets for maximum impact.
| RMM best practices | How Keen drives smarter retail marketing |
| Holistic data integration | Keen’s advanced analytics tools integrate data across multiple RMNs, providing a comprehensive view that helps brands optimize marketing spend 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 marketing performance measurement | With Keen’s customized metrics and KPIs, brands gain precise insights into the performance of their brand campaigns across different networks, enabling data-driven decision-making. |
| Security | Keen is SOC 2 certified and does not use any personally 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. |
Read more: The future of marketing technology
Importance of optimizing retail media investments
Optimizing retail media ad spending 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 marketing decisions regarding the distribution of resources.
By optimizing digital ad spending, 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 marketing investment optimization and keeps activities 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 investments and make data-driven decisions for future retail media campaigns. Continuous evaluation enables brands to adapt their strategies, reallocate budgets, and optimize their overall marketing mix modeling to achieve maximum impact and attain their business goals.
Infographic showing how Keen helps in retail media measurement
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.
Improve your retail media impact measurement with Keen
Keen serves as a valuable tool for brands in the retail media landscape. Our AI-powered platform helps them overcome their retail media measurement challenges and make informed decisions about where to invest their marketing budget to achieve their objectives effectively.
To learn more about how Keen can help you measure retail media impact and improve your marketing performance, start your 14 day free trial now!
