By now, you’ve heard the hype: Retail Media is the hottest trend in advertising. With European ad spend projected to skyrocket to €31 billion by 2028, it’s being hailed as the next frontier—bigger than video, faster than social, more targeted than search.
But here’s the uncomfortable truth: Retail Media’s promise of precision and performance is being undermined by a measurement mirage.
Ready to maximize your Retail Media investments?
The Allure of the “Closed Loop” Dream
Retailers have become media moguls. With their treasure troves of first-party data, they’ve built Retail Media Networks (RMNs) that promise advertisers the holy grail: closed-loop measurement. The pitch? Show an ad, track the sale, prove the ROI.
But marketers are waking up to a harsh reality. The loop isn’t as closed as it seems.
- Measurement is fragmented. Each RMN might play by different rules, with a lack of standardization in metrics and attribution models.
- First-party data is a double-edged sword. It’s powerful, yes—but it’s also blinkered. It tells you what happened on one platform, not what influenced the customer across the full journey.
- Signal loss is real. With increasing media fragmentation and privacy regulations, last-click attribution is perhaps becoming a relic of the past.
ROAS: The Most Dangerous Metric in Marketing?
Let’s talk about the elephant in the room: Return on Ad Spend (ROAS). It’s the metric that refuses to die—and it’s leading marketers astray.
In one case, a retail media campaign reported a ROAS of 14:1. Sounds like a dream, right? But when NIQ applied Marketing Mix Modelling (MMM)—a more holistic, statistically rigorous approach—the real return was a sobering 0.4:1.
That’s not just a rounding error. The takeaway? ROAS is not true ROI. ROAS leads to sub-optimal budgetary decision-making.
Incrementality: The Only ROI That Matters
To cut through the noise, marketers must embrace incrementality—the only metric that answers the real question: How many additional sales did my campaign deliver?
According to IAB Europe, 40% of buyers now cite incrementality as the top driver of retail media growth. The shift away from the obsession with attribution has clearly begun.
But measuring incrementality isn’t easy. It requires:
- Experimentation: Controlled tests that isolate the true impact of retail media.
- Marketing Mix Modelling: Advanced analytics that account for all variables—price, promotions, distribution, even competitor activity.
Proceed with Caution
When measured correctly, retail media is still shown to be a powerful growth engine. Results from recent work carried out by NIQ has shown:
- +6.3% sales uplift and €4.1 ROI in FMCG.
- +5.1% uplift and €2.5 ROI in T&D.
And these results include the significant halo effect digital retail media can have across other retailers and offline channels. If you’re only measuring what happens on the platform, you’re missing the full picture.
Retail media does work. But it is being given too much credit by attribution methodologies dominating current measurement practices. Attribution models based off 1P data only ARE useful. They can help advertisers refine and optimize activity WITHIN a single platform. But if you’re using it to allocate budgets, you risk building your strategy on sand.
The Retail Media Reckoning Is Here
With 149 RMNs now active in EMEA, marketers are drowning in complexity. Most large advertisers are juggling 3–8 networks, each with its own data, formats, and KPIs. The result? Chaos.
To survive—and thrive—marketers must:
- Demand standardization across RMNs.
- Measure holistically, including direct and halo impacts. Evaluating the short & long-term effects.
- Create measurement frameworks, aligning measurement solutions to decision-making needs—from tactical tweaks to strategic planning.
- Leverage experimentation and MMM, privacy compliant solutions that uncover incrementality to determine true ROI.
- Partner with RMNs, align KPIs and have a shared vision of success
The Path Forward: From Confusion to Clarity
Retail Media isn’t going away. But the days of blind faith in inflated ROAS are numbered. Smart brands will measure what matters, challenge the status quo, and build measurement frameworks that match the complexity of the modern media mix.
The right measurement will help you navigate the Retail Media landscape—and find your clear path to growth.
