These platforms, called retail networks, have become a popular model in digital advertising. Pioneer by giants such as Amazon and Walmart, the model has spread to grocery and clothing chains, delivery applications and other e -commerce channels. Instead of advertising on a news site or social media and hoping that a customer clicks in, brands can place their stadium on the “digital shelf”, catch users who already have a purchase mood.
Traders judge the impact with the performance of advertising spending (Roas) – sales attributed to a campaign divided by the amount spent on this campaign. Retail media networks bring ads to the purchase point and improve what can be observed. However, Roas is still a calculation and the resulting numbers depend on how it defines what counts as a sale.
Retail networks offer much more clarity, at least theoretically. Because buyers are often connected to an account as they browse, they leave a data path that can help traders measure the effect of their campaigns. Did the promotion of the cereal brand on Instacart led to more markets? Now you can count exactly how many people have seen the advertisement and determine if these people then bought the product, probably making roas simpler to calculate.
However, some of the old measuring problems and comparison with digital advertising remain, write Kellogg’s Brett Gordon and Eric Anderson in A new white paper. Despite the benefits of retail data, each platform can use very different techniques to assess Roas, making it difficult for companies to compare performance on all platforms.
To ensure consistency, accuracy and transparency in their data, marketing leaders need a steady understanding of the components that make up the roas numbers they use, Gordon and Anderson say. Without this clarity, it is difficult to make decisions on the basis of this data.
“Advertisers should recognize that the measurements they see, just because they have been marked as roas, does not mean that they are all that same Roas, “Gordon says.” There are different cases that enter the construction of any measurement, depending on the platform. “
A look under the hood
While the basic formula for roas – the total dollars created by a campaign divided by the total dollars spent on it – are quite clear, many decisions and details go to calculate that number.
“When you think: How do we count revenue?” Anderson says, “You quickly realize that there is no formal definition of Roas.”
For example, how a type account for purchases that cannot be attributed to an individual account, as well as when a stores as a “visitor”? Do you connect the markets to an advertisement with an umbrella brand against a particular product? Should you weigh any ad that a user sees equally or give more weight to the final advertisement observed before buying them?
Partners with Albertson’s Collective Media Collective-the Albertson Group chain chain chain-Gordon and Anderson have managed to test the impact of the most common cases going on roas calculations. The researchers analyzed nearly 600 advertising campaigns with Albertson’s in 2023 and 2024.
They found that seemingly small decisions can make a huge difference. Product yield – or sales are only attributed to ads for this product against the wider brand ads – can be shifted on average 35 %. The combination of the effect of four different methodological options produced an average shift of 63 %, which may mean the difference between a successful campaign and a flop.
“When seemingly ordinary, defensive options move roas by 63 percent, which can go to a no-go,” says Gordon. “This is why comparisons between platforms should start with aligned cases around a common calculation.”
But this volatility is not a negotiation when advertisers measure performance from a single retail network. If the platform method to calculate roas does not change, traders can still detect improvements and reduce the performance of the campaign over time.
The real problem arises when advertisers want to compare results opposite Platforms that may have very different types of roas.
“Imagine advertising campaigns for the same brand on networks and then you want to compare performance to determine who should get more advertising budget in the future,” Gordon said. “Differences in Roas Methodology could lead the advertiser to mistakenly denounce the advertising budget.”
Ask the right questions
This volatility does not mean that retail networks are not yet a big step forward for digital advertising, Gordon and Anderson digital measurements. Advertisers should simply be more careful about the methods used by their selected platforms.
Through talks with your advertising partners, you should be able to plan roas measures that meet your needs, substantiate the behavior or numbers you believe are important and allow you to make important comparisons.
“The starting point is to have consistency in the measurements and to align them as much as possible, in these channels or these partners, with which you are comfortable,” says Gordon.
Carefully think about the data you want to measure and this will be the most useful for you, while being clarified from the platform that hosts the advertising campaign for what they say. Knowing what makes the most meaning for your advertising approach and sales strategy – and not just let the advertisement simply serve what is easier or makes them look the best – it’s key.
“When you spend the money on your ad. You have to dictate what you want to go to the calculation,” says Anderson.
A steady thought of investing in advertising campaigns with multiple retail networks will want to address some questions in front of time to make sure that all their campaigns collect comparable roas information. Gordon and Anderson suggest ask these questions:
Gordon notes that retailers and platforms are not trying to be sneaky, but many do not necessarily have to think much about the consistency of the measurements they report to advertisers. Taking an active role in the way these partners gather roas data will make a huge difference in calculating the effectiveness of your campaigns.
“All advertisers do not ask these questions and not all industry participants have the time or interest to do so,” says Gordon. “But if you are trying to make a more educated comparison, you would like to align the underlying cases.”
