Retail media has exploded as a critical channel for brands, but the lack of standards across metrics, data quality, attribution models, and more has made it difficult to optimize investments. This “Wild West” era may soon end thanks to a new set of retail media measurement standards released by the Interactive Advertising Bureau (IAB) in partnership with the Media Rating Council (MRC) and industry experts.
January 2024 update: the final version was released, with an Executive Playbook developed by IAB and Boston Consulting Group for practical implementation. All documents can be downloaded here: https://www.iab.com/insights/retail-media-measurement-guidelines/
What the standards aim to achieve
The overarching goal of these standards is to bring more transparency, accuracy, reliability, and security to retail media measurement. As the industry matures, common definitions and best practices will help brands and retailers grow together in a sustainable way.
Specifically, the standards aim to:
- Ensure compliance with privacy regulations and enhance privacy protections
- Maintain transparency with consumers about data collection and use
- Standardize core metrics and attribution models to enable comparisons across retailers
- Provide guardrails and best practices around newer metrics like incrementality and outcome-based measurement
- Increase rigor around core components like viewability and ad delivery to improve campaign performance
- Encourage transparency from retailers on their methodologies, algorithms, and data practices
Ultimately, the standards seek to balance customization and innovation in retail media with the guardrails needed to optimize ad investments as the channel grows up.
What’s in the standards?
The document covers six key areas:
- Data quality and processing: Ensuring viability and integrity of data used for targeting and measurement. Retail media organizations should have consistent and transparent data collection, processing, and quality control procedures. This includes implementing data validation checks, filtering invalid traffic, and disclosing methodologies.
- Audience measurement and metrics: Standardizing core metrics like reach and frequency across retailers. Accurate measurement of audience reach and engagement across devices is important. Retail media organizations should adhere to MRC’s Digital Audience-Based Measurement Standards.
- In-Store measurement: Aligning digital ad measurement in stores with existing standards. For in-store environments, MRC’s Digital Place-Based Audience Measurement Standards should be followed where applicable. Requirements are provided for tracking viewability, audibility, and audience engagement.
- Ad delivery and viewability: Setting requirements to prove ad exposure via viewability verification or other methods before counting an ad as served. Ad viewability and completion rates should be measured per MRC’s Viewable Ad Impression Guidelines. Attribution models should be empirically supported and aim to minimize bias.
- Incrementality: Providing guidelines and transparency into incrementality measurement using control groups or modeling. Guidelines are provided for measuring true incremental impact of retail media, including use of experimental designs and transparent statistical modeling.
- Reporting and transparency: Standardizing key metrics and requiring transparency into retailer measurement methodologies. Clear reporting standards, granular metrics, and transparency around data sources/methodologies is emphasized. Adherence to privacy regulations is mandatory.
This creates a framework for the industry without being overly prescriptive, giving room for future innovation.
Why this matters for brands and retailers
For brands and agencies, common standards finally enable apples to apples comparisons of the efficacy and ROI of retail media investments across different retailers.
Rather than each retailer having its own black box of measurement, brands can optimize spend based on transparent, validated metrics grounded in MRC standards. They can now compare retail media to other media channels to make better budget allocation decisions.
For retailers, getting the measurement basics right lays the foundation for unlocking more advanced capabilities like sales incrementality and household-level measurement.
With standards in place, retailers can have more credible conversations with brands around business outcomes and attribution. They can showcase their value and differentiate from competitors through innovation within a common framework. By working together to maintain standards over time, brands and retailers can fuel the sustainable growth of retail media and deliver better experiences for shoppers. So while change can be hard, embracing it will pay dividends for the whole industry.
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