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[00:00:00] Marcus Johnson: Albertsons Media Collective drives performance where it matters most. Tap into premium audiences, transparent measurement, and data that proves impact. When you need retail media that delivers real results, partner with the network built for growth.

[00:00:19] Marcus Johnson: [00:00:20] On today's Cannes 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 [00:00:40] and media from Albertsons Media Collective to the discussion.

[00:00:43] Marcus Johnson: I hope you enjoy.

[00:00:44] Sarah Marzano: Somehow we're already on day three of Cannes. Um, 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, uh, anything that's surprising you?

[00:00:56] Liz Roche: Last year was a lot about in-store. Uh, I think this year still feels a [00:01:00] lot of in-store, um, but I think the conversation is more about how in-store grows and where the budgets- Sure

[00:01:05] Liz Roche: shift, um, 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, in quite a long time. I think it's one of those in-store mediums that's really coming back up, uh, especially when folks consider how they can [00:01:20] orchestrate that with some of the digital surfaces as well.

[00:01:21] Sarah Marzano: 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, 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 [00:01:40] about, like, practically how do we make that happen, right?

[00:01:42] Sarah Marzano: 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 kinda cool to see how that's evolving, and we might be talking about some of the same stuff, but in a new way, right? Um, so that's been really fun to hear about. I know we wanna sit down and talk a bit about, uh, some research that Albertsons just put [00:02:00] together in partnership with Ovative, um, on the topic of incrementality or iROAS, which is a very hot topic in retail media now.

[00:02:08] Sarah Marzano: Something that 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 [00:02:20] 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?

[00:02:29] Liz Roche: I think the passion around this topic has certainly grown- Mm-hmm ... uh, but it's always been part of the ethos. Yeah. And a, a big part of that is the fact that when campaigns work, we sell more units, and what's good for [00:02:40] Albertsons is also good for our suppliers, and it's great for our shoppers. Mm-hmm. So at the end of the day, vanity metrics don't help us.

[00:02:45] Liz Roche: Mm-hmm. 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 measurement's evolving, um, and as more and more retail media networks come online, I think there's a huge spectrum of [00:03:00] discrepancy between how these, how some of these metrics are calculated, and I think that's what's really driven us into this research mode of, hey, let's really get to the bottom of this, but also let's provide some educational content so our suppliers can just be more informed.

[00:03:12] Sarah Marzano: Yeah, absolutely. I think one of the things that really stood out in the research to me is that it's not a pitch for an Albertsons-specific [00:03:20] 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?

[00:03:33] Liz Roche: I think we've talked about this a lot- Mm-hmm ... and, and, you know, there's, there's one way to- Slice an avocado, but there are a lot of ways to [00:03:40] peel an orange, and I put retail media and measurement more in the orange camp, right? There are a lot of different ways to, to peel the orange. But also, we have to acknowledge that there are nuances between retailers.

[00:03:50] Liz Roche: Mm-hmm. 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. [00:04:00] Um, 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" Mm-hmm

[00:04:06] Liz Roche: 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, the outcomes."

[00:04:15] Sarah Marzano: 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 [00:04:20] home.

[00:04:20] Sarah Marzano: Of course, yeah Right? For, for different reasons, and very specifically, and I don't leave feeling frustrated by that. It's just the nature of, 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?

[00:04:39] Sarah Marzano: And I think for [00:04:40] 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, and how well it's working today?

[00:04:59] Liz Roche: For [00:05:00] sure. Uh, uh, especially grocery, right? It's, it's extremely habitual. The- Sure ... the way that you shop is, I, I mean, the way that I shop is I can park in the same spot. Mm-hmm. I kind of walk down the same aisles. Mm-hmm. 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, [00:05:20] you're not taking into account the impact of media.

[00:05:23] Liz Roche: You're saying that Sarah saw some media, Sarah made a purchase. Mm-hmm. And especially in grocery, when we know that you're frequenting the store- Mm ... maybe two times a week, right? We need to understand that causal impact of media, and that's what iROAS- Aims to do. Mm-hmm. It isolates the impact of a media campaign and media [00:05:40] exposure, and understands did that actually change shopper behavior?

[00:05:43] Liz Roche: Mm. So definitely a tool, right? We're, we're, we're kind of moving in the right direction, in that first we said, "Uh, are we targeting people that are shopping?" Yes. Um, now we're asking the question, "Is media working?" Mm. But I think there's a lot more to do.

[00:05:55] Sarah Marzano: Yeah, no, absolutely. And I think one of the headline findings from the [00:06:00] research which really stayed with me was that the same campaign can produce dramatically different iROAS results depending on the methodology used.

[00:06:07] Sarah Marzano: 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?

[00:06:14] Liz Roche: I think the magnitude of the shifts was larger than- Yeah ... I [00:06:20] anticipated. And I, I, I'll be honest, I, I asked the team to double-check the math. I, it, it was pretty shocking.

[00:06:25] Liz Roche: I mean, results can vary 6.5X. Um, I think the biggest shock to me, though, was that over 80% of campaigns can shift from positive to negative, uh, iROAS- Mm ... depending on methodology. So, you know- [00:06:40] 6.5X is one thing, but positive to negative, I mean, that's a, that's an actual indicator of how you're gonna do business, right?

[00:06:46] Sarah Marzano: Absolutely.

[00:06:46] Liz Roche: And if methodology is shifting this from positive to negative, it's, it really boils down to how, how do you know what to trust, and how do you understand these results?

[00:06:54] Sarah Marzano: Yeah. No, absolutely. And I think i- it, it sort of begs the question that if IROAS can vary that much, even [00:07:00] when a retailer is acting in good faith and the intentions are good, what do advertisers do?

[00:07:04] Sarah Marzano: Like, what should they be doing with this new information to evaluate performance claims and have more productive conversations with their retailer partners?

[00:07:11] Liz Roche: First, I thank you for saying acting in good faith. Yeah. I think, I, I, I do believe that. I, I think all retailers are out there really acting in, in good [00:07:20] faith- Yeah

[00:07:20] Liz Roche: because we want our brands to grow. Our brand partners are so critical.

[00:07:23] Sarah Marzano: Yeah.

[00:07:23] Liz Roche: Um, and, and our shoppers love these brands. Like, we, we want them to grow, too. So thank you for, for saying that off the, off the bat. I think it's fair to get into those conversations with, with your retail partners- Mm-hmm ... and start understanding, hey, how are you developing control groups?

[00:07:37] Liz Roche: Mm-hmm. Um, what, what, if you're using a [00:07:40] match control, what are some of the factors that you're matching on? Mm. If you're using synthetic control, if you're using, um, RCT, understanding that methodology- Mm, mm, mm ... 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 [00:08:00] 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- Mm

[00:08:11] Liz Roche: even if there might be some variation in how these things are calculated.

[00:08:15] Sarah Marzano: Yeah, I think what, what stands out to me is this is about empowering folks on both sides- Yeah ... [00:08:20] right, to just have that understanding and be able to engage in conversations to make sure that you are, um, really, again, understanding the data that you're using to make a decision on.

[00:08:29] Sarah Marzano: 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? Yeah. And, and, and [00:08:40] make our customers happy. So, um, it's such a good point to remember.

[00:08:43] Sarah Marzano: 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 gotta 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 [00:09:00] answering different questions?

[00:09:01] Liz Roche: We live in an imperfect environment. Yeah. So I think we've been long spoiled by the very tight attribution loops- Absolutely ... of one-to-one. Mm-hmm. But as retail media expands, and even consider as we're expanding into in-store- Mm ... and some of these other spaces, um, that are a little bit trickier to measure, we need to [00:09:20] be able to lean into the methodology, yes, but also, like, lean into some directional results at times, right?

[00:09:25] Liz Roche: Yeah. And start looking at trends, looking at patterns. But also, you know, measurement isn't a report to put on the fridge. Mm-hmm. Measurement should be used to inform your next- Mm ... your move. And if you can take measurement and look at those trends, for example, across retailers, [00:09:40] and you can start finding what's working and you can amplify that, um, I think that that's a great application of measurement.

[00:09:45] Liz Roche: It needs to be applied, though, and I, I, I would say that that's my biggest take.

[00:09:49] Sarah Marzano: Yeah, I think that's gonna 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 [00:10:00] us into a corner and keep us from making progress.

[00:10:02] Sarah Marzano: 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?

[00:10:11] Liz Roche: Yes, I do. I think it's, it, it definitely boils into that governance territory. But I also think that this IROAS is, [00:10:20] again, just kind of the first step, right?

[00:10:23] Liz Roche: Mm. We're measuring campaign to campaign, but shoppers don't shop in campaign cycles. Mm. They come in whenever they want. Uh, and frankly, advertisers don't always advertise in, in, you know, standardized seasonal cycles either. It's, a lot of this is always on. So I think we've, we've kind of uncovered a lot about IROAS and how it's very [00:10:40] variable, and we've put out this research about that.

[00:10:42] Liz Roche: Um, but I think, you know, next we're gonna be looking at more and more metrics. Mm. So kinda nailing this one as the, as the basic- Yeah ... and getting a basic understanding I think is really critical.

[00:10:50] Sarah Marzano: Yeah, absolutely. I wanna close this off by returning to a topic that I think we're both pretty passionate about, right?

[00:10:56] Sarah Marzano: And I'll bring up again that, like, you know, uh, something I admire about the research is that it's focused on [00:11:00] 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?

[00:11:09] Sarah Marzano: 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 [00:11:20] advertisers, retailers, and consumers?

[00:11:22] Liz Roche: I'm glad you're giving me the opportunity to put on future goggles. Mm-hmm. Um, so thank you for that.

[00:11:27] Liz Roche: Uh, but if I do put on the future goggles, I think we're moving into a world where we're looking at retail solutions- Mm ... beyond media placements. Media is a, a great part of what we do as retailers. Mm. But [00:11:40] consider, there's a, there are four Ps for a reason. There's a lot happening at the shelf. So I- As we move forward, I think orchestration between merch strategy, orchestration between in-store and online- Mm-hmm

[00:11:50] Liz Roche: really understanding that full, you know, last mile all the way to the store, all of these thing I, I think are gonna be more and more important, and I think more marketers are going to wanna orchestrate. And [00:12:00] I also think that we're moving into a world where our suppliers wanna see longitudinal. They wanna understand the cumulative impact- Mm

[00:12:06] Liz Roche: of their partnership with a retailer. They don't just want to see the campaign results. Yeah. Um, and we're excited about that, right? I mean, for us, that also is, is really interesting. How do we move category? How we, how do we shift some share? Mm-hmm. [00:12:20] Uh, so I think all of these things are gonna be more business out- outcome focused, and less just kind of that report that we put on the fridge.

[00:12:26] Sarah Marzano: Yeah. No, absolutely. It feels like retail media's growing up, and it's just unlocking so much opportunity.

[00:12:30] Liz Roche: I'd agree.

[00:12:31] Sarah Marzano: Thanks, Liz.

[00:12:32] Liz Roche: Thank you so much.

[00:12:33] Marcus Johnson: Thank you for listening to this episode of the Can Podcast mini-series made possible by Albertsons Media Collective. You can find more [00:12:40] coverage from the festival at EMARKETER's Cannes Coverage Center at EMARKETER.com.

[00:12:44] Marcus Johnson: The link is, of course, in the show notes.