Retail media networks are enjoying a meteoric rise to prominence, but how do you know if they’re a good investment for your company? In this series, we’ll explore common misconceptions about these networks from both the retailer and brand perspective, providing you with everything you need to know to make informed decisions when it comes to retail media commitments.
Missed the previous blog in this series? Click here to read.
So you’re thinking of advertising your brand’s products on a retail media network (RMN). You’ve heard about the superior targeting opportunities and the great sales margins. It all makes sense. But a big question remains: can you actually know for sure whether or not your investment is paying off?
The short answer: oftentimes, you can’t. That’s why it’s so crucial to have the right ecosystem of partners in place. Let’s discuss.
Brands are spending …
Retail media networks have a clear appeal, and we know that brands are spending on these networks en masse. According to Forbes, 74% of brands already have dedicated RMN budgets.
And in a survey by Wakefield Research, 64% of CPG brands with advertising budgets of $100M or more plan to increase their RMN spend in 2023. In the United States, a lot of this money (over $200B) even comes from once untouchable trade funds.
But with big investments come even bigger expectations for ROAS. The pressure is on for retailers to deliver comprehensive reporting and proof of ROI, but not everyone is primed for the challenge.
… but are they winning?
In theory, the ability to measure ROAS and other metrics is one of the principal sources of value for RMNs. Nearly everyone agrees that measurement matters. In a study by the Association of National Advertisers, 93% of survey respondents indicated that they measured RMN effectiveness—citing a need for “more data, greater transparency, and greater standardization of available data and reporting.”
The devil is in the details. Measurement methodologies can vary widely not only between brand and retailer, but also across different retailers where you might be investing. Additionally, brands and advertisers are often entirely dependent on the retailer to supply these metrics. Can you trust them to deliver transparent results, even if those results would show that the investment is no longer justified? As a result, it’s difficult to get a transparent view of how your RMN investments are performing.
When it comes to the measurement problem, you need a partner
Advertisers are looking for three big KPIs in the data and reporting they receive. Survey respondents indicated that they used ROI (58%), ROAS (48%) and incremental sales (56%) to evaluate RMN efforts.
In practice, however, many expressed disappointment with the actual measurement capabilities they were being provided. 47% responded that they were “somewhat or significantly weaker”, 33% responded “somewhat or significantly stronger” and 20% thought they were roughly the same as other options in the marketing mix.
This is where it’s important to have the right partner ecosystem in place. 40% of advertiser respondents indicated they were handling holistic measurement in-house, while 38% sought the expertise of an external agency and 29% consulted a third-party resource. 11% are not handling it at all.
You can’t depend solely on your retail partners to get the full picture of what’s happening across different RMN investments. The right data partner can help you get a clear picture of shopper behavior and performance. Enriched point-of-sale data provides a reliable baseline to evaluate shopper behavior within one network or across multiple retailers.
Get transparent measurement capabilities with Bridg
When evaluating your RMN investments, you want to make sure you can quickly test, measure and learn about drivers of return. And for that, you need comprehensive, consumer-level transaction data. For example, to what degree of granularity can you understand how your customers are spending at a certain retailer? Can you compare that behavior across multiple retailers?
We provide unified, privacy-safe consumer profiles that include SKU-level purchase behavior and over 300 enriching demographic, socioeconomic and lifestyle attributes. Whether you’re increasing your retail media investments or optimizing trade spend, you can base your decisions in POS data.
Reach out to us to learn more.