Retail media networks are quickly becoming one of the fastest-growing parts of the advertising world. Simply put, retail media is when stores or retailers advertise products and brands, whether physical or digital, within their spaces. This type of advertising is highly effective because it reaches customers already in the buying mindset—right when they’re about to make a purchase, like in store aisles.
Why are retailers embracing retail media networks? It allows them to increase revenue by selling ad space in their stores or digital platforms. They also have a unique advantage: retailers already have relationships with many brands because they sell their products. This makes it easier for them to sell ad space to those same companies.
But some retailers are starting to think bigger. Instead of just offering ad space to brands selling products in their stores, they are opening their retail media platforms to “non-endemic” advertisers. Non-endemic advertisers are companies that don’t sell products directly in the store, like local ones like roofers, landscapers, or car repair shops. This creates even more opportunities for retailers to boost their ad revenue.
Another factor pushing the growth of retail media networks is the changing landscape of privacy laws. As more regulations are put in place to protect customer data, businesses with their own first-party data are in a better position. Retailers naturally have a lot of first-party data from their customers—like shopping history and preferences. This data is precious for targeting ads more accurately in-store and online.
Addressing the Need for Standards
Although retail media platforms are increasing, there’s been one challenge: more standardization. In more established advertising methods, there are clear rules and metrics. However, with retail media, there still needs to be more clarity about measuring success or what counts as an impression. This lack of clear metrics makes advertisers hesitate to invest in retail media networks.
To address this, the Interactive Advertising Bureau (IAB), a significant organization in the advertising world, has introduced Retail Media Measurement Guidelines. These guidelines create a common language and standard metrics across retail media platforms. Advertisers are more likely to spend money on these retail media platforms When they know what they’re paying for and how their ads are being measured.
Key Features of IAB’s Guidelines
The IAB’s guidelines focus on digital retail media, leaving out traditional forms of advertising like print ads or in-store product sampling. One key area is defining what constitutes an “impression” in retail media networks. The IAB takes a broad view, stating that an impression is any digital ad that’s viewable and likely to be seen by customers.
Another area is ad-serving metrics, which determine how ads are delivered and measured. Many of these metrics are borrowed from other forms of digital advertising. Additionally, the IAB sets clear rules for measuring the performance of retail media ads, such as calculating incremental sales lift. This prevents retailers from inflating their numbers to make their ad services look more effective than they are.
The guidelines also help standardize the way retailers categorize different in-store ad spaces. The IAB breaks down in-store zones into five key areas: “outside the store,” “store entrance,” “checkout area,” “in-aisle,” and “other.” These definitions make it easier for advertisers to understand exactly where their ads will be shown and to compare results across different retail media networks.
Leading the Way: Kroger’s Example
Kroger, one of the largest retailers in the US, has been one of the first to adopt these new guidelines. Even before the IAB introduced their Retail Media Measurement Guidelines, Kroger advocated for more structure in retail media networks. Kroger understands advertisers want clear benchmarks and transparency when investing in ad space.
To take things even further, Kroger is developing its retail media measurement model to align with the IAB’s guidelines. This model, set to launch by the end of the year, will help standardize how Kroger measures everything from ad performance to customer engagement. This is expected to professionalize their retail media program and improve their relationships with advertisers.
For example, Kroger’s new model will offer advertisers regular reports on the performance of their ads. This transparency will give advertisers confidence in their investment, helping Kroger retain existing clients and attract new ones. Once other retailers see Kroger’s success with this model, they will likely follow suit. As a result, standardized reporting and metrics may become the norm across all retail media platforms.
