In this article…
Retail media is quickly outpacing other areas of digital advertising and is projected to grow 29% by 2025. Despite this trajectory, retail media is still relatively new compared to traditional digital media and operates like a startup in terms of tech capabilities. Sustained growth will require retail media standardization — creating consistent ways to measure and compare ad performance across retail media networks (RMNs). This standardization will be key for RMNs wanting to understand what’s driving the most value and sales for their business.
In an Interactive Advertising Bureau (IAB) study, 62% of ad buyers pointed to standardization as a top growth challenge. The current ecosystem’s inconsistent standards have prevented effective investment in measurement and limited ad buyer participation. Standardization will be necessary moving forward for effective adoption and trust in these new channels.
This article explores the challenges marketers face without retail media standardization and the collaborative efforts needed to establish consistent measurement standards across the industry.
How much standardization currently exists?
Retail media standardization is limited industry-wide, with each RMN using its own metrics and definitions; what one network calls a “conversion” might be defined differently by another. Some retail companies also sell ad space within siloed, walled-garden shopping environments, which makes it difficult for advertisers to compare performance across platforms. As a result, the current landscape lends itself to inconsistency, campaign measurement complications, and an unclear view of return on investment (ROI) across RMNs.
This fragmentation stems from how retailers have historically developed and managed customer data platforms and e-commerce websites independently, causing disparities in the types and quality of customer data available and the technologies used to manage it. Each retailer uses a unique technology stack and customer experience strategies, which means data is collected, utilized, and integrated into advertising platforms differently.
Why is standardization important?
A 2023 State of Retail Media Survey highlighted the industry’s lack of standardization as a significant obstacle to growth. The Association of National Advertisers also found that advertisers can’t fully take advantage of their retail media investments because of inconsistent measurement practices. Standardized retail media measurement practices are critical for growth. By setting consistent measurement standards across different platforms, it becomes easier for various players to:
- Assess how ads are performing
- See which strategies work across RMNs
- Optimize ad spending
- Make informed decisions
- Extract more value from advertising budgets
Ultimately, standardized metrics are a must for improving transparency, strategic effectiveness, and ROI.
Who is promoting standardization?
We’re seeing a collective push for retail media standardization by several industry stakeholders wanting a more cohesive and effective advertising ecosystem. One of the most recent efforts came from the IAB and the Media Rating Council (MRC). These organizations collaborated with brands, agencies, and RMNs to develop new guidelines for standardized measurement practices and have given the ecosystem a proposed common language for retail media measurement.
These guidelines were released in January 2024 to provide a consistent framework for the following across retail media platforms:
- Audience measurement
- Reporting
- Incrementality
- Transparency
- Viewability
- Ad delivery
- In-store advertising
Microsoft Retail Media, an early adopter of the framework, has experienced greater data transparency, accuracy, privacy, and security, which has benefited advertisers and retailers and advanced Microsoft’s position as a retail media industry leader. Widespread adoption of these guidelines has the potential to drive innovation, attract more advertisers, strengthen collaboration, grow the industry, and improve the consumer experience.
The benefits of industry standardization
A standardized retail media framework for performance measurement can benefit advertisers, retailers, media agencies, and other stakeholders in the ecosystem. Here are some ways each entity stands to benefit.
Benefits for retailers
Standardization makes it easier for retailers to demonstrate their credibility and the value of their retail media program. With uniform measurement across channels and campaigns, they can provide clear, comparable data that reflects their impact, builds trust, and encourages advertiser investment. Better campaign management efficiency also reduces the operational burden, so retailers can focus on improving customer experiences and driving sales.
Experian’s Activity Feed helps you measure performance — and understand how ads impact shopping behavior — by providing you with ad exposures in one environment (web or connected TV) that you can connect to an action in another (in-store purchase). Learn more about Activity Feed and see it in action here.
Benefits for media agencies and marketers
With standardized metrics, advertisers and media agencies have an easy, reliable way to compare metrics and assess the effectiveness of various campaigns across RMNs. This “apples to apples” comparison helps them determine which channels are truly driving better ROI so they can effectively optimize spending.
Standardization also improves collaboration with retailers and leads to more effective campaigns. Consistent guidelines can help teams create, carry out, and optimize retail media strategies and easily compare platform effectiveness.
Benefits for industry stakeholders
Industry stakeholders like technology providers and regulatory bodies can greatly benefit from standardized retail media measurement practices. Consistent measurement provides a common framework that improves transparency and trust among parties. With reliable and comparable metrics, standardization helps everyone speak the same language when it comes to performance evaluation and decision-making. This uniformity facilitates smoother interactions and partnerships between the buy and sell sides, so it’s easier to negotiate and collaborate.
Strategies for implementing retail media standardization
Standardizing measurement will require industry-wide coordination around several strategies, as outlined in best practices frameworks from standardization proponents like IAB/MRC and the Albertson’s Media Collective.
Unify reporting and performance measurement
To address the lack of standardization in performance metrics, RMNs must adopt uniform definitions and calculation methodologies for key metrics. Unified reporting in retail media requires successful stakeholder collaboration to:
- Agree on critical KPIs and reporting metrics like impressions and conversion rates
- Adopt standardized data formats and reporting tools
- Educate stakeholders
- Ensure data quality and compliance
- Continuously improve based on industry feedback
The IAB/MRC framework provides a basis for standardizing metrics for media delivery and engagement, as well as sales and conversions. This consistency helps advertisers compare performance across platforms effectively, enhancing transparency and decision-making.
Standardize product specifications
It’s important for advertisers to have consistent product specifications, as it makes it easier to create and deploy ads across multiple RMNs. To achieve this, RMNs should align ad formats, file sizes, animations, and video specifications with IAB guidelines. Following these standards will help RMNs eliminate compatibility issues, simplify adoption, and save time and resources. It’s also vital for RMNs to maintain flexibility for unique ad formats in order to encourage innovation while still benefiting from standardized specifications.
Introduce third-party verification and disclose capabilities
Introducing third-party verification for ad placement, fraud detection, brand safety, and competitive separation can improve an RMN’s credibility and transparency. By disclosing the third-party providers used and the types of verification offered, RMNs build trust with advertisers and give them the confidence they need to invest.
Additionally, RMNs should disclose their staffing, processes, technology, inventory management, targeting, creative management, and self-service offerings. Transparency in these areas helps advertisers make informed decisions, optimize ad buys, and increase efficiency. Using existing IAB verification and capability disclosure guidelines ensures reliability and a more trustworthy, efficient advertising environment.
Future retail media standardization trends
The future of retail media is poised for significant growth, especially as standardization guidelines are widely adopted and implemented. Here are some trends we expect to see as retail media ad spending grows.
Widespread RMN adoption and spending
Standardization could spur greater RMN spending and drive broad adoption by advertisers who hesitated before due to concerns about metrics and performance comparability.
New partnerships and collaborations
Standardization may lead to new partnerships that weren’t possible before:
- Brands and retailers might team up to blend advertising and sales data for better-targeted campaigns.
- AdTech companies could also partner with multiple retailers to offer unified advertising solutions.
- Retail media networks and analytics firms could collaborate to provide deep insights into consumer behavior and campaign performance.
- Partnerships among retailers, including smaller ones seeking retail media measurement uniformity, may drive further standardization and create new advertising opportunities across product categories with audience overlap.
Ad format innovation
Agreeing on common standards simplifies how ads are measured and understood. Standardization may drive down costs and free up space for more imaginative, engaging ads in the future. For instance, the IAB/MRC’s common language is helping to promote consistency and clarity and fuel innovation across the board.
Incrementality focus
As standardization becomes more widespread, there may be a growing trend toward incrementality measurement, which measures the additional impact of advertising campaigns compared to what would have happened without them. Standardized metrics can help advertisers accurately gauge and optimize campaign effectiveness and maximize their marketing investments.
Growth of cross-platform ad targeting
Standardization may drive the growth of cross-platform ad targeting. With consistent metrics and measurement standards, advertisers will be able to track and compare their ad performance across platforms more accurately. This unified approach will improve ad targeting precision and ensure a consistent impact across RMNs.
Commerce media
Commerce media is changing retail advertising with its focus on verified data and real-time transaction insights, making campaigns more efficient. This shift could push for more uniform measurement standards across platforms and level the playing field. As commerce media gains traction, its emphasis on targeted advertising and ROI measurement might pave the way for universal metrics and clearer guidelines across retail networks.
Where does this leave modern advertisers?
Retail media is still at a crossroads. If standardization doesn’t occur soon, its growth may slow. For now, advertisers are resorting to custom strategies or relying on whichever network they feel is most effective for their products. They are likely to continue investing significantly in retail media, maintaining or increasing spending in the next year.
Although RMNs continue to be challenging without formally recognized standardization guidelines, the proposed IAB/MRC guidelines provide an effective starting point.
Join forces with a strategic RMN partner
RMN success requires overcoming complicated technical hurdles that may exceed non-media business capacities. Managing data complexities, resolving identities, utilizing audience insights, and ensuring precise measurement requires specialized expertise and technologies.
We recently announced a solution tailored for RMNs. This offering enhances RMNs’ strength in first-party shopper data by using Experian’s #1 ranked identity and audience services. Our solution helps RMNs unlock expanded customer insights, enriched audiences for activation, identity resolution for cross-channel audience targeting, and real-time measurement and attribution. This comprehensive solution is designed to help RMNs capture more advertising revenue.
If your organization could benefit from a partner with the requisite technological tools and insights into the retail media landscape, contact us to discover how we can help you achieve RMN success.
Latest posts
Q&A with John Fetto, Senior Analyst, Marketing & Research Earlier this year, Experian Marketing Services released our Cross-Device Video Analysis. The analysis has generated such strong and sustained interest from marketers and the media, we wanted to explore the subject further. The following is an exchange with the report’s lead author John Fetto who answers some common questions that we’ve received since the analysis was published. Q: In the Cross-Device Video Analysis, you report that consumers are “cutting the cord” on pay cable and satellite television services. Can you elaborate on this trend? What’s driving it? According to our research at Experian Marketing Services, U.S. consumers are increasingly likely to have high speed Internet at home but no cable or satellite TV subscription. There are two primary consumer trends driving this: 1) Households that never subscribed to a pay TV service are now upgrading to broadband Internet; 2) Households that previously subscribed to both pay TV service and broadband Internet that have since cancelled the cable or satellite TV subscription. While the vast majority of U.S. households pay for either cable or satellite TV, an estimated 15.1 million (or 12.9 percent of households) do not. That’s up from 13.5 million households (11.9 percent) who didn’t pay for TV in 2009. At the same time, the share of broadband households is also rising. Today, 72.7 million homes (61.4 percent) have broadband Internet, up from 65.0 million homes (56.9 percent) in 2009. As Americans’ Internet connection at home is increasingly fast enough to deliver high quality video content through sites like YouTube, Netflix, Hulu and the like, as well as the ability to consume that online video content across an array of devices ranging from Internet-connected televisions to smartphones and tablets to computers, they are increasingly questioning whether they need to continue paying for TV. And more and more consumers are deciding to cut the cord. Q: With more consumers cutting the cord, how are they consuming video content? While the most commonly used device to consume online video is the smartphone — used by 24 percent of adults during a typical week to watch online video, according to our research — “cord cutters” are primarily using Internet-connected TV to consume online video. In fact, an adult who watches online video on their TV is 3.2 times more likely than the average adult to be a cord-cutter. This means that the Internet-connected TV market is critical in predicting the future of the cord-cutting consumer. As existing devices like Apple TV, Chromecast and Roku are upgraded and new devices like Amazon Fire TV are introduced to the market, consumers will have more and more options to consume online video without sacrificing quality or screen size. As a result, more consumers will be reconsidering whether they need to continue paying for TV. Q: What percent of consumers get their television programming from various sources including cable, satellite, online streaming and free over the air TV? Combined, 87.1 percent of U.S. households subscribe to either cable or satellite TV. While Experian Marketing Services doesn’t specifically measure the percent of Americans who watch TV through an over the air feed (OTA) we know that among those who do not subscribe to cable or satellite, the vast majority (77 percent) still watch TV. And while it’s possible that some are viewing TV from a cable or satellite feed away from home, the most likely source of their TV content would be from OTA sources. That means that at least 10 percent of American adults are watching some TV through an OTA feed. In addition, 48 percent of all adults watch online video each week through a variety of devices. Those who don’t pay for TV are 12 percent more likely than those who have cable or satellite TV to watch online video (54 percent vs 48 percent). Q: The cord-cutting trend has many implications for the cable and satellite companies, but what do consumer-facing marketers and advertisers need to know about this trend? The growth in online video viewing creates many opportunities for marketers. Online audiences can be more easily targeted and served up advertising that is more relevant, responsive and measureable. Marketers can also be more confident that their online ad was actually seen, given that viewers are typically unable to skip ads. And while CPMs for online video ads may generally be lower than those of TV, marketers can use that savings to negotiate costs based on clicks or transactions rather than impressions, giving them a better picture into audience interest and insights to inform their budget allocation. Millennials are the most device “agnostic,” with more than one-third saying they don’t mind watching video on a portable device even if it means a smaller screen. That’s more than double the rate of those ages 35 and older. This decentralized viewing can create headaches for marketers who need to start a relationship with Millennials during this stage of their lives when they’re most open to trying out new brands and have yet to settle down. On the plus side, marketers who do manage to reach this audience will find them much more open to advertising than average. In fact, Millennials are more than four times more likely to say that video ads that they view on their cell phone are useful. So while the challenge is big, so is the potential reward. Download the full analysis to learn more about: Cross-device video behaviors to optimize media mix approach The impact of the growing trend in cord-cutters The rising influence of Internet-connected TV How to get more impact from video content
School may be out for the summer, but this is the perfect time for marketers to begin back-to-school planning. Follow these five simple tips and be on your way to back-to-school success. Searchers are actively seeking out ideas around clothes, hairstyles and dorm room décor as they prepare for the school year to start. Leverage sites like Pinterest to promote back to school merchandise and content. Don’t forget to include DIY and customization options as these appeal to today’s students. Don’t underestimate the influence of moms and college students. These consumers are more likely to actively search for the best deals online so test using deal-seeking terms like “free” and “sales” in promotional campaigns. In 2013, Marketers experienced a 35 percent lift in unique clicks when they used the word ‘college’ in the subject line. This year, try targeting specific ages for back-to-school by including terms like “college” and kids” in the subject line. Timing of back-to-school campaigns matters. While August is the key month for back-to-school campaigns, there may be more opportunity to mail additional campaigns for school supplies in July, and clothing and accessories in early September. Don’t forget to personalize! Last year, we saw a 44 percent increase in unique open rates for emails that contained personalization in the subject line. These tactics should be included in a strong back-to-school mailing program. For more information on back-to-school planning, download the 5 Lessons for Back-to-school Marketers in 2014 report.
Experian Marketing Services conducted an analysis into the attitudes, language preferences, spending habits and media behaviors of Hispanic Consumers, some of which were featured in the 2014 Hispanic Market Overview presented by López Negrete Communications. This post highlights findings from that analysis, which focus on Hispanic consumers’ adoption and use of smartphones. Hispanic consumers, who today account for 15 percent of the total U.S. adult population and 22 percent of Millennials, represent an ideal audience for mobile engagement and mobile advertising. While cell phone ownership rates among Hispanic and non-Hispanic adults are equal, Hispanics are more likely to own a smartphone and use it as their primary device to connect to the Internet. According to the latest estimates from Experian Marketing Services, 63 percent of Hispanic adults own a smartphone versus 60 percent of non-Hispanics. That’s up from 52 percent and 51 percent, respectively, since 2012. Among smartphone owners, Hispanics are 17 percent more likely than non-Hispanics to say that they access the Internet more through their phone than through a computer. In fact, 45 percent of Hispanic smartphone owners are mobile-dominant when it comes to going online compared with 38 percent of non-Hispanics. Marketers courting the influential Hispanic consumer must consider this fact and take a mobile-first approach to ensure that online marketing efforts, including everything from email to websites to e-commerce, are designed to engage the customer as effectively on a mobile device as on a computer. Even traditional marketing tactics such as television ads should reflect the growing likelihood that Hispanics have a smartphone either nearby or physically in their hand and are ready to engage. In fact, 37 percent of all Hispanic adults say that they often use their cell phone while watching television compared with 29 percent of non-Hispanics. Among smartphone owners, the share of Hispanics who use their phone while watching television shoots up to 50 percent versus 42 percent of non-Hispanics. Millennial smartphone owners are among the most likely to be splitting their attention between the big and small screen with 61 percent of Hispanic Millennials and 58 percent of non-Hispanic Millennials doing so. Knowing what specific mobile activities Hispanics are engaging in is critical for marketers in identifying the best tactics for reaching them via mobile. The chart below shows that Hispanics engage in most smartphone activities at above average rates, but they are much more likely than non-Hispanics to IM/chat on their phone. As a result they are slightly less likely than non-Hispanics to email from their phone, though the vast majority of Hispanic smartphone owners still use mobile email. Other activities that marketers will find Hispanics engaging in at above average rates include watching videos, using mobile GPS and listening to music. Learn more about how Experian Marketing Services can help your organization more effectively target, reach and engage today’s Hispanic consumer.