Cannes Miniseries Podcast: Albertsons Media Collective Unpacks the Mysteries of iROAS

Our business media collective drives performance where it matters most. Tap into premium audiences, transparent measurements, and data that proves impact. When you need retail media that delivers real results, partner with a network built for growth. On today's CAN miniseries podcast, we discuss incremental ROAS or iROAS, and unpack the problem it was designed to solve, and what advertisers should be doing to evaluate performance.

Recorded from the eMarketer studio at the Cannes Lions International Festival of Creativity, eMarketer Vice President and Principal Analyst Sarah Marzano welcomes Liz Roche, Vice President Measurement and Media from Albertson's Media Collective, to the discussion. I hope you enjoy. Somehow we're already on day three of Cannes. I'm curious what's standing out to you so far.

Are there any themes that are sort of emerging and playing out exactly like you expected or anything that's surprising you? Last year was a lot about in-store. I think this year still feels a lot of in-store. But I think the conversation is more about how in-store grows and where the budgets shift and where they come from.

And the participation of brand marketers and also new mediums. I'm hearing more about audio than I've heard in quite a long time. I think it's one of those in-store mediums that's really coming back up, especially when folks consider how they can orchestrate that with some of the digital services as well. Yeah, you know, I'm hearing a lot about audio as well.

And I feel like I'm hearing people talk about it in a new way, right? In a new light. And I think what's happening is we're moving from talking about all the potential of in-store when we think about the imbalance of the amount of transactions that happen there versus online and where retail media has historically concentrated on. And now we're starting to think about like practically how do we make that happen, right?

And I think now people are looking at audio and saying, oh, that actually makes a lot of sense in certain settings. So it's kind of cool to see how that's evolving. And we might be talking about some of the same stuff, but in a new way, right? So that's been really fun to hear about.

I know we want to sit down and talk a bit about some research that Albertsons just put together in partnership with Ovative on the topic of incrementality or IROAS, which is a very hot topic in retail media now. Something I've always noticed about Albertsons is that you've been one of the more vocal advocates for advancing measurement in retail media for a number of years. And you're thinking about this really collectively in terms of the entire industry. When you joined the company, was that commitment already deeply embedded and crystallized within the organization?

Or is it something that you feel like you guys have sort of shepherded towards and grown more passionate as time has gone by? I think the passion around this topic has certainly grown, but it's always been part of the ethos. And a big part of that is the fact that when campaigns work, we sell more units. And what's good for Albertsons is also good for our suppliers and it's great for our shoppers.

So at the end of the day, vanity metrics don't help us. They don't help our suppliers. They don't help our shoppers. I think that's always been at the core.

But now, especially as measurements evolving and as more and more retail media networks come online, I think there's a huge spectrum of discrepancy between how some of these metrics are calculated. And I think that what really driven us into this research mode of hey let really get to the bottom of this but also let provide some educational content so our suppliers can just be more informed Yeah absolutely I think one of the things that really stood out in the research to me is that it not a pitch for an Albertsons methodology right One of the key takeaways is that there actually might not be a single right way to measure incrementality.

So why was it important to publish research that advances the entire industry's understanding rather than position Albertsons as having the answer? I think we've talked about this a lot. And there's one way to slice an avocado, but there are a lot of ways to peel an orange. And I put retail media and measurement more in the orange camp, right?

There are a lot of different ways to peel the orange. But also, we have to acknowledge that there are nuances between retailers. Consider the way that you shop at a variety of retailers from e-commerce to brick and mortar. You shop them differently.

You might have different cadences. And of course, you have a different mission. There are just different reasons for being. So I think for us, it wasn't about saying, hey, there's one way to do this.

It was more or less saying, hey, there are a lot of ways to do this, but you should really understand what's underneath the hood so you can determine what the variables are that are impacting the outcomes. Yeah, no, absolutely. I know we both live in New York and I feel like I will shop at three or four grocery stores just on my walk home. Of course, yeah.

For different reasons and very specifically, and I don't leave feeling frustrated by that. It's just the nature of how things work. Let's get into the research itself, right? Talking, you know, staying on the theme of topics that have been top of mind but have sort of evolved and we've changed the way we're approaching them.

measurement has been one of the most persistent challenges in retail media, right? And I think for advertisers, as the investment has grown, as they're investing with more networks or allocating more of their spend, the pressure to get it right has also increased. And so incremental ROAS or iROAS has emerged as one of the industry's preferred approaches. Can you tell us a bit about what problem iROAS was designed to solve and how well it's working today?

For sure. Especially grocery, right? It's extremely habitual. The way that you shop is, I mean, the way that I shop is I can park in the same spot.

I kind of walk down the same aisles. And I shop five stores as well sometimes, but I still kind of have my routine. I say that because when you're just looking at return on ad spend, you're not taking into account the impact of media. You're saying that Sarah saw some media, Sarah made a purchase.

And especially in grocery, when we know that you're frequenting the store maybe two times a week, right? We need to understand that causal impact of media. And that's what IROAS aims to do. It isolates the impact of a media campaign and media exposure and understands, did that actually change shopper behavior?

So definitely a tool, right? We're kind of moving in the right direction. And at first we said, are we targeting people that are shopping? Yes.

Now we're asking the question, is media working? But I think there's a lot more to do. Yeah, no, absolutely. And I think one of the headline findings from the research, which really stayed with me, was that the same campaign can produce dramatically different IROAS results depending on the methodology used.

I'm curious, like, did anything about the findings surprise you or shock you? Or did it just sort of validate something that you had had sort of a hunch about? I think the magnitude of the shifts was larger than I anticipated. And I be honest I asked the team to double check the math It was pretty shocking I mean results can vary 6 I think the biggest shock to me though was that over 80 of campaigns can shift from positive to negative IROAS, depending on methodology.

So, you know, 6.5x is one thing, but positive to negative, I mean, that's an actual indicator of how you're going to do business, right? And if methodology is shifting this from positive to negative, it really boils down to how do you know what to trust and how do you understand these results? Yeah, no, absolutely.

And I think it sort of begs the question that if IROs can vary that much, even when a retailer is acting in good faith and the intentions are good, what do advertisers do? Like what should they be doing with this new information to evaluate performance claims and have more productive conversations with their retailer partners? First, I thank you for saying acting in good faith. I think, I do believe that.

I think all retailers are out there really acting in good faith because we want our brands to grow. Our brand partners are so critical and our shoppers love these brands. We want them to grow too. So thank you for saying that off the bat.

I think it's fair to get into those conversations with your retail partners and start understanding, hey, how are you developing control groups? If you're using a match control, what are some of the factors that you're matching on? If you're using synthetic control, if you're using RCT, understanding that methodology I think is really important. I think the other piece, though, is if you can use every campaign as an experimentation opportunity.

So entering every campaign cycle with a clear objective of I want to learn this, I want to prove this hypothesis, or I want to disprove this hypothesis. I think that getting that specific, understanding the measurement can really help you move the ball forward, even if there might be some variation in how these things are calculated. Yeah, I think what stands out to me is this is about empowering folks on both sides, right, to just have that understanding and be able to engage in conversations to make sure that you are really, again, understanding the data that you're using to make a decision on.

And you bring up a good point, too, that retailers ultimately have the same goal as their advertisers, which is part of what makes retail media so unique, right? We're all here to move product at the most profitable way possible, right, and make our customers happy. So it's such a good point to remember. It would be natural to look at these findings or to hear about our conversation and conclude that someone must be measuring incrementality incorrectly, right?

There's got to be a right way. But that doesn't feel like the conclusion of the research. So how should advertisers think about the fact that different methodologies may be answering different questions? We live in an imperfect environment.

So I think we've been long spoiled by the very tight attribution loop of one-to-one. But as retail media expands and even consider as we're expanding into in-store and some of these other spaces that are a little bit trickier to measure, we need to be able to lean into the methodology, yes, but also lean into some directional results at times, right? And start looking at trends, looking at patterns. But also, you know, measurement isn't a report to put on the fridge.

Measurement should be used to inform your next move. And if you can take measurement and look at those trends for example across retailers and you can start finding what working and you can amplify that I think that that a great application of measurement It needs to be applied though And I would say that that my biggest take Yeah, I think that's going to be a huge challenge and opportunity for everyone moving forward in retail media is not letting this wonderful precision that we've gotten used to in on-site environments paint us into a corner and keep us from making progress.

So I'm glad you touched on that. As we think about the future of incrementality measurement, do you see this becoming more of a governance and standards issue than simply a performance measurement issue? Yes, I do. I think it definitely boils into that governance territory.

But I also think that this IROAS is, again, just kind of the first step, right? We're measuring campaign to campaign, but shoppers don't shop in campaign cycles. They come in whenever they want. And frankly, advertisers don't always advertise in standardized seasonal cycles either.

A lot of this is always on. So I think we've kind of uncovered a lot about IROAS and how it's very variable. We've put out this research about that. But I think next we're going to be looking at more and more metrics.

So kind of nailing this one as the basic and getting a basic understanding I think is really critical. Yeah, absolutely. I want to close this off by returning to a topic that I think we're both pretty passionate about, right? And I'll bring up again that something I admire about the research is that it's focused on advancing the industry at large.

It's not just about advancing Albertsons, right? So if you put your future goggles on, when you think about the future of retail media, what does success look like? And is it specifically a market that will be dominated by a small handful of large players? Or is it one where many networks have a right to win and can create value for advertisers, retailers and consumers?

I'm glad you're giving me the opportunity to put on future goggles. So thank you for that. But if I do put on the future goggles, I think we're moving into a world where we're looking at retail solutions beyond media placements. Media is a great part of what we do as retailers.

But consider there are four Ps for a reason. There is a lot happening at the shelf. So as we move forward, I think orchestration between merch strategy, orchestration between in-store and online, really understanding that full last mile all the way to the store, All of these things, I think, are going to be more and more important. And I think more marketers are going to want to orchestrate.

And I also think that we're moving into a world where our suppliers want to see longitudinal. They want to understand the cumulative impact of their partnership with a retailer. They don't just want to see the campaign results. And we're excited about that, right?

I mean, for us, that also is really interesting. How do we move category? How do we shift some share? So I think all of these things are going to be more business outcome focused.

and less just kind of that report that we put on the fridge. Yeah, no, absolutely. It feels like retail media is growing up and it's just unlocking so much opportunity. I'd agree.

Thanks, Liz. Thank you so much. Thank you for listening to this episode of the Cannes podcast miniseries made possible by Albertsons Media Collective. You can find more coverage from the Festival at eMarketers Cannes Coverage Center at emarketer.

com. The link is, of course, in the show notes.