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Retail media has become a hot topic in the marketing world, and for good reasons. According to IAB Europe’s Chief Economist, Dr. Daniel Knapp, at the 2024 DMEXCO conference in Cologne, retail media advertising spend in Europe is set to reach €31bn by 2028. The growth is undeniable, with retail media advertising in Europe expected to increase by 22% in 2024, compared to a total ad market growth of just 6%.
Traditionally, in-store promotions and prime shelf space (offline and online) were often part of broader agreements between brands and retailers, included as value-added benefits. However, retail media vendors like supermarkets, department stores, and online marketplaces have started monetising these spaces, transforming them into paid opportunities. This shift challenges brands that once relied on free exposure, forcing them to reassess their strategies. On the other hand, it also provides an opportunity to take control of how and where your brand stands out in comparison with other brands, allowing for more strategic and targeted placements.
Retail media vendors typically provide their own insights, claiming their solutions can show significant uplift. This uplift, however, is often challenged and doesn't account for other (media) activities that may have contributed to the increased sales or brand awareness.
This presents a challenge for marketing managers: how do you determine the true value of retail media investments? If your brand already utilises Marketing Mix Modelling (MMM), incorporating retail media as a marketing channel can provide the best insights into incremental uplift. This puts you in a stronger position to negotiate retail media placements and confidently decline pricing that won’t deliver a positive incremental return on investment (iROI).
Objective Platform is a leading MMM provider that offers advanced tools to measure the true impact of retail media. By configuring retail media as a channel alongside other media and non-media factors, Objective Platform’s MMM approach reveals the actual incremental value of retail media. This helps marketeers understand the real impact of their retail media investments, providing better bargaining power with vendors and enabling more informed decision-making.
Moreover, Objective Platform goes a step further with its Media Scenario Planner. This tool allows marketing managers to simulate different media investment scenarios, showing when to invest in retail media and how much to allocate for optimal returns. By leveraging the Media Scenario Planner, your brand can strategically plan its media spend, ensuring you are investing in retail media at the right times and at the right levels to maximise iROI.
While retail media vendors provide their own reporting on campaign effectiveness, these insights often lack the depth needed to isolate the true impact of retail media from other influencing factors. Marketers need a more comprehensive approach to evaluate whether retail media investments are driving real, incremental growth rather than simply capturing demand that would have occurred regardless. This is where Marketing Mix Modelling (MMM) becomes crucial. By integrating retail media into an MMM framework, brands can objectively measure its effectiveness in relation to other media channels and business drivers, leading to more data-driven decision-making.
Retail media can be integrated into a broader Marketing Mix Modelling (MMM) framework to provide a holistic view of its impact compared to other marketing channels. While MMM traditionally focuses on measuring the effectiveness of different media investments at a macro level, retail media introduces a more granular perspective by capturing in-store promotions and shopper behaviour. By incorporating detailed store-level data into MMM, businesses can gain a clearer understanding of how retail media complements other advertising efforts, allowing for more precise budget allocation and strategic adjustments.
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To measure the incremental impact of retail media, retail data is processed and incorporated as an additional media channel within the MMM. This approach enables brands to evaluate how retail media influences brand and performance KPIs while also comparing its effectiveness and efficiency against other media channels.
While MMM provides a strong high-level view of the combined impact of all marketing actions, it does not inherently capture the detailed effects of individual retail media initiatives. This is because MMM is designed to assess overall media efficiency rather than pinpointing the exact contribution of every single promotion. However, adding retail media as a channel within MMM still provides valuable insights, offering a structured way to measure its role in the broader marketing mix. For an even more precise and granular measurement, additional testing and experimentation can complement the MMM results, refining our understanding of retail media’s true incremental impact.
This is where MMM provides a key advantage—not only does it measure the true incremental impact of retail media, but it also puts it into context by comparing it with other channels. This allows brands to make informed decisions, such as whether to shift more budget towards retail media or invest further in TV for greater impact.
Measuring the true incremental impact of retail media requires more than basic vendor reports or high-level MMM. The key advantage of retail media data is its inherent experimental nature: retail media actions are applied to specific products in certain stores over a defined period, while other stores serve as natural control groups where these actions are not implemented. By comparing sales in both sets of stores, we can effectively isolate the impact of retail media, similar to a controlled experiment, but without the need for artificial test setups. This makes retail media data a powerful tool for accurate incrementality measurement.
To implement these experiments effectively, comprehensive data is essential. This includes:
The key to successful experimentation lies in the ability to compare data from stores with and without retail media actions over a similar time period. This allows you to calculate an expected value for performance in the absence of retail media and then compare it with the actual performance during the experiment.
To accurately measure the incremental impact of retail media, brands should follow a structured experimental approach. This methodology ensures that results are reliable, statistically significant and actionable for future investment decisions.
To get the most reliable results, you need to define both your experiment period and your comparison period. Your experiment period refers to the time frame when retail media actions are implemented, while the comparison period should mirror this time frame for stores that did not receive these interventions. By selecting similar time frames and regions, you can ensure external factors (e.g. seasonality, macroeconomic influences) are controlled for, allowing for more accurate conclusions.
Once the data is gathered, the next step is to calculate the expected sales value for the stores without retail media exposure. This can be done by considering historical sales performance, adjusting for seasonal factors and trends. Then, by comparing the actual sales during the experiment period with the expected sales, you can determine the incremental impact of retail media.
Incremental Retail Media Impact = Actual Sales - Expected Sales
High-level MMM can help you make better holistic decisions by comparing retail media investments with regular media channels and campaigns. However, an MMM (if store-level data is available) is not the most accurate way to measure the incremental value of retail media. That’s why we combine incremental retail media calculations with holistic MMM to leverage the best of both worlds—measuring incremental impact with maximum accuracy while enabling holistic decision-making through MMM.
Integrating experimental findings with MMM allows brands to refine their understanding of retail media’s true contribution. While MMM offers a high-level view of media efficiency across channels, experiments provide more granular insights that can further validate or adjust MMM results. This combination of techniques enables brands to make more informed, data-driven decisions about where and how much to invest in retail media, ensuring optimal returns.
As retail media continues to grow and reshape the advertising landscape, brands must adopt data-driven approaches to measure its true incremental impact. Relying solely on vendor-provided insights can be misleading, which is why integrating retail media into a robust MMM framework is essential. With tools like Objective Platform’s Media Scenario Planner, brands can confidently optimise their retail media investments, ensuring maximum returns and smarter budget allocation.
Want to stay ahead of the curve? Learn about the latest retail media trends by downloading our Marketing Channel Trends 2025
