Retail media measurement challenges persist despite industry growth

Retail media measurement remains challenging despite significant industry growth, according to experts speaking at the IAB Australia Commerce & Retail Media Summit on July 29, 2025. The panel discussion featured Andy Ford from Coles 360, Alistair Lewood from Circana (formerly IRI), and Raph from Google Australia and New Zealand, who addressed measurement complexities across omnichannel retail environments.

According to Alistair Lewood, the mismatch between industry desires and deliverables stems from fundamental technical, commercial, and philosophical challenges. "It sounds like we should know everything. We should know who's seen what, where, when, for how long, and all that," Lewood explained during the discussion. However, he noted that technical limitations, legislative constraints, and attribution complexity create barriers to comprehensive measurement solutions.

The closed-loop nature of retail media provides advantages over traditional advertising channels, Lewood emphasized. "If you can tell me who saw what, I can tell you who bought what, and together we can figure out whether that's what made the difference," he stated. This capability enables more direct attribution than other advertising formats, yet significant challenges remain in implementation.

Andy Ford, who heads retail measurement for Coles 360, outlined a grid-based approach to building measurement products across different channels and sophistication levels. The framework spans from basic pre-post methodologies to advanced incremental techniques, addressing the spectrum of advertiser needs from multinational companies with measurement expertise to smaller businesses where retail media represents only 20% of their responsibilities.

"What's great about retail media is also what's really bloody hard from a measurement point of view and that is omnichannel," Ford noted. The platform must address digital channels, physical stores, owned assets, and walled gardens within unified measurement frameworks. Coles has developed incremental measurement techniques for both online and in-store environments, working with partners including Circana to build automated solutions.

The company is building a team of marketing scientists to provide customized measurement plans for advertisers requiring more sophisticated analysis. Ford emphasized the importance of matching measurement complexity to campaign scope, noting that incremental testing requires sufficient investment levels and time periods to generate meaningful results.

Google's approach to retail media measurement focuses on integrating capabilities into existing platforms including Search Ads 360, Display & Video 360, and Google Ads. According to Raph, Google has invested significant engineering resources to embed measurement capabilities directly into tools that agencies and advertisers already use, rather than requiring adoption of new platforms.

"If you're a retail media buyer, at the moment, you're getting 25 different reports, seven different platforms you're going to have to learn," Raph explained. The company aims to simplify measurement by building capabilities into established workflows while offering partnership-based solutions tailored to specific retailer and brand objectives.

Google's measurement strategy extends from bottom-of-funnel SKU-level omnichannel attribution to top-of-funnel brand lift metrics. The platform includes search lift measurement and search impact analysis, reflecting retail media's role in driving search behavior. Artificial intelligence plays an increasing role in addressing privacy challenges and data integration complexities through modeling and predictive analytics.

The panel discussion highlighted persistent challenges in metric optimization across retail media campaigns. Traditional digital advertising has struggled with inappropriate optimization targets, with click-through rates remaining problematic after 20 years of misuse. The industry seeks to establish appropriate optimization frameworks from retail media's early stages.

Lewood advocated for focusing on sales and profit metrics while acknowledging that not all sales carry equal value. "Can you bring new customers into the category? Can you bring new people? Can you do incrementality?" he questioned, emphasizing business impact over intermediate metrics. The goal involves measuring customer acquisition, repeat purchasing behavior, and long-term value creation.

However, aspiration often exceeds implementation capabilities. While advertisers express interest in sophisticated measurement approaches including incrementality analysis and lifetime customer value, many default to simpler return-on-advertising-spend calculations over short time periods. Ford criticized this tendency toward "short-term ROAS" when campaigns aim to influence new customer acquisition or repeat purchasing patterns.

The complexity extends to different advertiser segments and campaign scales. Advanced measurement techniques including regression analysis and media mix modeling target advertisers with larger campaigns and extended time periods, typically correlating with higher investment levels. Smaller advertisers can derive value from simpler methodologies including pre-post analysis and attribution modeling when applied appropriately to their specific situations and objectives.

Ford emphasized that understanding measurement limitations enables effective toolkit development. "If you actually understand what they're good at, what they're not good at, you can build out a pretty useful toolkit to answer the questions you want," he noted. Pre-post measurement provides adequate insights for smaller advertisers avoiding promotional activity and television advertising, while attribution modeling supports creative optimization and immediate learning.

The panel identified several positive developments over the past 12 months. Major platforms including Google and Meta have developed retail media products supporting privacy requirements and audience measurement needs. Multi-channel lift measurement has advanced significantly, enabling attribution across different media environments. Synthetic control methodologies have simplified incremental testing by reducing complex experimental setup requirements.

Looking forward, synthetic data and synthetic controls represent key growth areas for scaling incremental measurement techniques. The industry expects continued development of automated measurement assignment logic to match appropriate methodologies with specific campaign characteristics and investment levels.

The measurement challenges occur within broader retail media growth trends. According to recent PPC Land analysis, retail media demonstrated 22.1% growth compared to 6.1% expansion across the broader advertising market. This acceleration reflects fundamental shifts in marketing priorities, with 67% of brands redirecting performance advertising budgets toward retail media investments.

Standardization remains a critical industry priority despite progress. Research indicates that 44% of respondents rate their retail media experiences as good, suggesting moderate satisfaction levels reflecting challenges in setting appropriate expectations within a rapidly evolving sector. Industry confusion about performance benchmarks contributes to uncertainty about successful retail media outcomes.

The discussion emphasized retail media's unique position combining advertising reach with transaction data access. This combination enables measurement approaches unavailable in traditional advertising channels, yet creates complexity in implementation and standardization across different retail environments and advertiser requirements.

Timeline

• July 15, 2025: IAB Europe releases retail media best practice guides addressing standardization gaps and operational fragmentation
• July 29, 2025: IAB Australia Commerce & Retail Media Summit panel discussion on retail media measurement challenges
• March 26, 2025: IAB Europe releases updated retail media definitions covering on-site, off-site, and in-store categories
• September 18, 2024: IAB and IAB Europe release in-store retail media measurement standards for public comment
• August 28, 2024: IAB Australia unveils retail media measurement guidelines establishing transparency and consistency principles
• March 18, 2024: Google's Search Ads 360 integrates retail media capabilities for offsite targeting and optimization

Summary

Who: Panel discussion featured Andy Ford (Coles 360), Alistair Lewood (Circana), and Raph (Google Australia and New Zealand) at the IAB Australia Commerce & Retail Media Summit.

What: Industry experts discussed persistent measurement challenges in retail media despite sector growth, covering omnichannel attribution complexity, standardization gaps, and the need for appropriate optimization metrics beyond short-term ROAS calculations.

When: The panel discussion took place on July 29, 2025, during the IAB Australia Commerce & Retail Media Summit.

Where: The discussion occurred at the IAB Australia Commerce & Retail Media Summit, addressing measurement challenges across Australian and global retail media markets.

Why: The panel addressed critical industry needs for standardized measurement frameworks as retail media transitions from experimental phases to strategic advertising infrastructure, with growth significantly outpacing broader advertising market expansion.

Key Terms Explained

Retail Media Measurement: The practice of tracking and analyzing the effectiveness of advertising campaigns within retail environments. This encompasses attribution analysis, performance tracking, and return-on-investment calculation across omnichannel retail touchpoints. Measurement complexity increases due to the combination of digital and physical environments, requiring sophisticated methodologies to isolate advertising impact from other factors influencing purchasing decisions.

Omnichannel Attribution: The process of identifying which advertising touchpoints contributed to customer conversions across multiple channels including online, in-store, mobile, and social platforms. This measurement approach attempts to map the complete customer journey from initial exposure to final purchase, accounting for interactions across owned and third-party properties. The complexity stems from data integration challenges and the need to weight different touchpoint contributions appropriately.

Incremental Measurement: Advanced analytical techniques that isolate the specific impact of advertising campaigns by comparing outcomes against control groups or baseline performance. This methodology attempts to answer whether advertising generated additional sales beyond what would have occurred without the campaign. Incremental analysis requires sufficient campaign scale, extended time periods, and sophisticated statistical approaches to generate reliable results.

Return on Advertising Spend (ROAS): A performance metric calculating revenue generated per dollar spent on advertising campaigns. While commonly used due to its simplicity, ROAS calculations can vary significantly based on attribution windows, measurement methodologies, and time period selection. Short-term ROAS measurements may not capture the full impact of campaigns designed to influence customer acquisition or lifetime value.

Standardization: The development of unified frameworks, definitions, and measurement approaches across retail media networks. Industry standardization efforts aim to enable consistent comparison of campaign performance across different platforms and retailers. The lack of standardized metrics creates challenges for advertisers managing campaigns across multiple retail partners and limits the ability to optimize budget allocation effectively.

First-Party Data: Customer information collected directly by retailers through their own properties and interactions. This data includes purchase history, browsing behavior, demographic information, and preference indicators gathered through direct customer relationships. First-party data provides advantages in targeting accuracy and measurement precision compared to third-party data sources, particularly as privacy regulations limit alternative data collection methods.

Synthetic Controls: Statistical methodologies that create artificial control groups for measurement purposes when traditional experimental designs are impractical. These approaches use algorithms to identify similar markets, time periods, or customer segments that can serve as comparison baselines for campaign analysis. Synthetic control methods reduce the complexity of setting up traditional lift tests while maintaining statistical rigor in incrementality measurement.

Cross-Channel Integration: The coordination of advertising campaigns and measurement approaches across multiple media channels and retail touchpoints. This integration encompasses both campaign execution and performance analysis, requiring unified data platforms and measurement frameworks. Successful cross-channel integration enables more comprehensive attribution analysis and optimization opportunities across the complete customer journey.

Performance Optimization: The ongoing process of improving campaign effectiveness through data analysis, testing, and strategic adjustments. In retail media, optimization extends beyond traditional metrics to include product-level performance, customer acquisition efficiency, and long-term value creation. Effective optimization requires appropriate measurement frameworks, sufficient data granularity, and clear alignment between campaign objectives and optimization targets.

Attribution Windows: The time periods used to connect advertising exposures with subsequent customer actions or purchases. Different attribution windows can significantly impact campaign performance calculations and optimization decisions. Retail media attribution windows must account for varying purchase consideration periods across different product categories, seasonal influences, and customer segments to provide accurate performance assessment.