Retail media networks and advertisers going from guesswork to growth

Retail media networks (RMNs) are a fast-growing space in promoting — up 16.3% last yr. Retailers are adding channels and providing higher measurement and execution for advertisers. And agencies are answering their clients’ calls to include RMNs in the combo.

While brands are increasing their spend, there are still growing pains around the dearth of standardization. Without the power to compare apples to apples from one RMN to one other, brands and agencies are left with more number-crunching and guessing. However, the chance to reach high-intent customers inside a retailer’s network is simply too powerful to pass up.

So what’s the present state of the RMN-advertiser relationship? That was the main target of an IAB roundtable this week featuring agency and RMN representatives.

IAB introduced media measurement guidelines in September 2023 so RMNs and adtech partners could begin to help brands and agencies connect the dots. If it’s easier for advertisers to execute and measure campaigns across multiple RMNs, they’ll increase their overall spend, the idea goes.

“We were very cognizant that adoption [of measurement guidelines] would take 12 to 24 months,” said Jeffrey Bustos, VP, measurement addressability data at IAB. “I believe from all of the conversations with retailers, the momentum and their investment in moving toward standardization continues to be very strong.”

While standardization stays a goal fairly than a reality, the increasing opportunities inside individual RMNs as they expand offsite and in-store offerings make them something advertisers must consider.

CVS Media Exchange’s deal with shopping experience

“When you have a look at retail and consumer spending, quite a lot of that also happens in a store format,” said Praveen Menon, head of analytics and business intelligence for CVS Media Exchange (CMX). “Someone like CVS, who has 9,000 stores, [attracts shoppers] coming into these stores with quite a lot of attention and urgency, with a transparent consumer need they’re looking to fulfill.”

CVS Media Exchange can measure the connection between when loyalty members search within the CVS app or online and after they purchase in-store through the loyalty program.

“Over 50% of our loyalty members, after they browse something online, they arrive to our store inside 48 hours,” said Menon. “For us, the in-store experience is a key unlock.”

CVS plans to construct higher shopping and ad experiences through in-store screens and other touchpoints. The retailer has 1,700 screens in its stores and plans to add more this yr.

Dig deeper: Why we care about RMNs

Data collaboration for offsite measurement needs

At some level, all RMNs serve the function of an information collaboration. The retailer uses customer data in a privacy-safe way to help outside parties serve timely, relevant messages. This collaborative environment extends to offsite channels beyond an RMN’s owned digital and in-store properties.

For instance, CVS partnered with visual discovery platform Pinterest and adtech company LiveRamp on a clean room initiative that helps CVS measure the effectiveness of offsite ads on Pinterest that lead to CVS purchases by loyalty members.

“What data clean rooms allows us to do is to provide advertisers and agencies with precise, attributed and meaningful performance insights for campaigns they run with CMX, especially on offsite channels where we’ve got limited ad exposure data,” said Menon. “This really allows us to report back about performance with a high degree of accuracy.”

He added: “On another platforms, where they don’t share a few of those ad exposures or don’t collaborate via clean rooms, measurement is more of a black-box solution. So for us, as we take into consideration our modern offerings, we wish every channel that brands spend money on through CMX to be measurable.”

Advertisers and agencies push for standards

This collaborative environment might sooner or later lead to multiple RMNs adopting the identical measurement standards. That’s at the very least the intention with the IAB guidelines. Agencies are seeing great RMN interest from clients. Agencies and brands have influence, through the budget they spend, to support RMNs which can be standardized.

“We have to put our money where our solutions are,” said Evan Hovorka, VP of product innovation, Albertsons Media Collective. “That might require some brands forcing the following dollar to go to an RMN that supports a few of these adopted standards.”

“What’s really interesting is that our [clients] are so excited to adapt and test and learn, because they’ve seen the success of retail media,” said Kavita Cariapa, SVP, head of commerce activation at dentsu. “And luckily there’s actually an excellent framework being built out with partners like CVS and Albertson’s. There’s a groundwork built on tech partnerships, collaboration.”

“Outside of its adoption rates, there are a few [IAB member RMNs] which have done improbable jobs,” said Riyaad Edoo, executive director of commerce at EssenceMediacom. “Accountability is admittedly what holds progress back. If my investment (on behalf of a brand client) isn’t going to directly reflect what my asks are, then those asks are empty. But that may not be the appropriate conversation. In most instances, we are able to survive on some amount of measurement inconsistency and not be completely happy about it. We do have advanced data analytics teams working tirelessly to type of weather these anomalies.”

“One of our biggest wins that we present to our brands is, baseline, how to inform a channel investment,” said Cariapa. “There’s all the time questions on how and when and where to invest. How do they spend money on a retailer as they expand their opportunities?

Dentsu reports how clients are growing market share with campaigns and how specific channels perform, so brands aren’t just tracking impressions but results, Cariapa said.

Less than halfway through IAB’s two-year estimated timeframe for guideline adoption, it looks value more highly RMN measurement is probably going, as advertisers and agencies proceed to spend money on this growing ecosystem.