How to Get Retail Media Measurement Right

The rise of first-party data and identification brings the potential for closed-loop measurement, but it comes with both opportunities and challenges, says CvE’s Paul Frampton. Retail media is not yet the silver bullet for all measurement problems, and its growth has been fueled by uncertainty around third-party cookie deprecation. Despite Google's decision to extend the use of cookies, the shift in digital media buying is reshaping how targeting and measurement are handled.

The use of first-party IDs, especially when combined with transactional data, offers the promise of better measurement, but this area is still in its early stages. Leading consumer brands are now expecting to measure incremental sales lift from their retail media investments, as much of the spend has shifted from other marketing budgets. It's crucial to evaluate whether these investments are yielding better results.

Consumer behavior still leans heavily toward in-store purchases for omnichannel retailers, making it essential to measure the impact of all touchpoints on the final purchase. Historically, traditional and digital channels have been measured separately, but the combination of retailer profile data and purchase history offers a unique opportunity to bridge these gaps. However, since this capability is retailer-specific, it creates new data silos or "walled gardens."

Brands are looking for ways to:

- Develop more targeted audience plans
- Measure sales lift from digital retail media
- Find the ideal mix of traditional and digital touchpoints
- Optimize investments across retail media networks
- Understand lifetime customer value across product categories

Although these tools are becoming available, they primarily benefit larger brands. Platforms like Circana combine loyalty data with insights on pricing and promotions, addressing some brand needs, but only a few retailers globally use such systems. Smaller retailers often lack access to these advanced data solutions.

The Future of Retail Media Measurement

Despite Google's update on third-party cookies, brands must continue exploring new measurement strategies. First-party data is valuable, but demand-side platform (DSP) advertising will weaken as cookie-based solutions fade. Many are betting on Unified ID 2.0 (UID), while others, such as Microsoft and Experian, are stepping in to solve identity challenges.

Retail media remains fragmented, with over 100 networks in the U.S. alone. Achieving standardization will take time, and different brands have varying relationships with retailers. However, the industry can start by adopting common principles:

Control Key Variables: Focus on flexible outputs that adapt quickly to changes.
Accept Imperfection: No data set is flawless; work with transparent partners.
Prioritize the Customer Experience: Avoid getting bogged down in ad tech; focus on building long-term shopper relationships.
Look Beyond Immediate Sales: Measure lifetime value and relative market share.
Use the Right Metrics: Senior leadership cares about high-level metrics like market share, not just in-platform stats.

Today’s inflated retail media pricing is a result of inconsistent measurement practices. As brands demand more evidence of ROI and transparency, the pressure for improved accountability will increase. Larger retailers must collaborate with industry bodies to solve measurement challenges, while smaller players should focus on upgrading their technology and tools to support brands of all sizes.