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Retail Media Breakfast Club
Retail Media vs National Media: The Measurement Debate Brands Can’t Ignore
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A CPG brand side retail media leader recently wrote in with a question I suspect that a lot of teams are wrestling with right now. How should brands think about commerce specific media mix modeling tools? These are tools built to measure retailer level ROI versus traditional marketing mix models that measure total market impact. Can you use both? Should you? And how do you hold retail media to the same rigor as national media without forcing the wrong tool onto the wrong problem? It's a good question and based on the responses I got when I put this out to my network, there is no tidy answer. But there is a useful set of guardrails taking shape. Let's jump in so here's what the peanut gallery all agreed on that different objectives need different measurement. Just like sprinters and bodybuilders don't train the same way, retail media and national media are optimizing for different objectives. So says Jordan Whitmer, head of retail media at the agency SALT xc. He explains how retail media optimizes for conversion skew movement retailer specific algorithms while national media optimizes for retail reach frequency brand building. Jordan says that when a single model tries to assign one ROI to spend that serves both purposes, it blends two optimization strategies into one output. Jaya Kamara, who is the founder of Signal to Summit, an advisory firm working with retail media networks, landed in a similar place but framed it with a different analogy. He be said to think of it like camera lenses. You have a wide angle lens that can technically shoot macro and a macro lens that can technically shoot wide, but neither really does the other's job very well. Commerce MMM vendors and traditional MMM vendors both offer to measure across each other's lanes and they can technically do it. But the models are trained for different data types and and different decision cycles and forcing a cross lane read produces a blurry picture. And finally, James Deeker, who advises retail media networks through his firm Corakia Media, was the most skeptical of the bunch. He says retail ROI and total market ROI answer different questions and trying to collapse them into one number often creates more confusion than clarity. Retail media sits closer to trade spend. It's about driving outcomes within a specific retailer, while national media is about growing overall demand. Both of these matter, but James argues they should be evaluated against their own objectives before anyone tries to unify them. So what happens when you get this wrong? Jordan Whitmer shared two failure modes that he's seen firsthand. Number one is when a brand uses a single traditional MMM across everything and every time the model runs, the retail teams are pressured to justify their investment, it turns into a defensive spiral. Jordan recounts one example that he faced here where a retail media campaign was driving lower CPCS and higher click through rates on top category terms. Great signals, strong signals by any platform native measure, but the MMM evaluated it as search CPM and called it too expensive. The analytics team's response when Jordan pushed back was we don't like to question or adjust the methodology to make our work look better. Ooh. And the second example Jordan gave was when a sales leader asked whether they should sign a JBP with a retailer specifically to protect us from the dollars getting cut when the MMM runs When your measurement framework is driving teams to seek shelter in joint business plans, something has gone sideways. One other failure mode is subtler. A brand sets up multiple measurement approaches commerce MMM alongside traditional mmm, but it doesn't cleanly assign objectives upfront, so they default to legacy measurement. And when it doesn't look good, they they pull out the secondary model as a backup. Jordan's take here you're not really doing things differently. You've kind of just set up a backup plan. The upstream issue, which is clearly defining what each investment is supposed to deliver, never gets addressed. And this connects to something that Jordan and I discussed recently, that whoever owns the budget, whether that's the sales team or the brand team, gets to determine what retail media is even allowed to to be and what it gets measured against. We did a whole webinar on this topic that I recommend checking out and I'll link up to the summary blog post in the show. Notes. Retailers know that a marketplace model can dramatically boost product assortment, shopper engagement and total revenue. But to get the most out of your marketplace, you you need an ad tech solution that can really engage sellers. Miracle Ads is powering the future of retail media for leading retailers to activate both 3P sellers and 1P brands. Learn more@miracle.com that's M I R A K L.com so who should really own this? I spoke with Anne Halleck, who is the VP of sales for for the Americas at Miracle Ads, who is also the sponsor of this podcast, and she took a little bit of a different angle from the others. She's less focused on which tool and more focused on who should be running the measurement. Her framework is that three groups need to get MMM right, but they'll each do it a little differently. Number one agencies. Agencies will do it at scale. They have to to maintain authority with clients. Number two brands. Brands will do it in hyper focus, building their own views, even if it means investing in tooling and data portability. Number 3 RMNs. RMNs will find it difficult to do because of their other competing priorities. In a perfect world, every RMM would build world class MMM capabilities. But the reality is that they're triaging with other priorities and that frankly deliver and execution can and should come first. And that is not a failure of ambition, but a rational prioritization. And there's a structural reason that brands and agencies need to own this, she says. The walled garden can't smell the flowers outside. RMNs only see what happens on their own platform. While brands and agencies are the ones with the whole picture view, they're the ones who can stitch together retailer level performance and total market impact. So just closing this out with Jaya Kamara, who raised one more important point worth flagging, which is that this whole conversation assumes a certain level of sophistication on both sides of the table, he says. It's the more mature brands and media buyers asking for these sophisticated measurement approaches, and it's the more mature RMNs that are investing in incrementality and outcome based measurement rather than defaulting to impressions and cpm. Both sides have to be ready for this to work, and that tracks the reader who sent this question in is clearly operating at an advanced level, but a huge portion of brands are still taking the ROAS number at face value, and a huge portion of RMNs are still handing them one. Although I have argued before that ROAS, while definitely imperfect, has its place in the measurement ecosystem. Still, there's no single model that answers every question here, but the experts I talk to broadly agree on the starting point. Decide what job each dollar is supposed to do before it gets spent, and measure against that objective, not against a universal number that tries to be everything to everyone. Thanks for listening. I'll catch you tomorrow.